Intel Incorporation (UK) Ltd v Daw

In claims for psychiatric injury caused by work-related stress, ordinary principles of employer’s liability apply. The employer must act when indications of impending harm are sufficiently plain that a reasonable employer should realise action is required. The duty is assessed by reference to the employee’s circumstances, the work, the magnitude and gravity of the risk, the costs and practicability of prevention, and available resources. A confidential counselling service is not automatically sufficient. Its adequacy is fact-sensitive, particularly where management failures require a reduction in workload. An employee does not necessarily lose the claim by remaining in the job. For future earnings, a possible later depressive episode does not require a fixed cut-off where its severity and disabling effect remain uncertain.

The respondent, an employee of the appellants, suffered a breakdown and chronic depression after prolonged workplace stress. Goldring J found that, by early March 2001, the appellants should have recognised that the demands placed upon her were unreasonable and that the risk to her health was clear. He held that urgent management action would probably have reduced the severity of her illness and awarded damages of £134,545.18, including interest.

The appellants appealed liability and the award for future loss of earnings. They argued that the risk was not foreseeable earlier, that their counselling and medical support discharged the duty, that the respondent should have left the job, and that future loss should end in 2006. The central issues were breach, causation and the proper assessment of future earnings.

1. The appeal was dismissed unanimously. Pill LJ gave the leading judgment, with which Wall LJ and Richards LJ agreed.
2. For psychiatric injury arising from work-related stress, the ordinary principles of employer’s liability apply. The threshold was whether injury to health attributable to work stress was reasonably foreseeable, judged by what the employer knew or ought reasonably to have known about the individual employee. The indications of impending harm had to be sufficiently plain for a reasonable employer to realise that action was required. The guidance in Hatton v Sutherland [2002] EWCA Civ 76 did not prevent a careful and vigorous assessment of the facts.
3. The judge was entitled to find that the respondent’s early March memorandum, read in the context of her repeated complaints, excessive hours, tears and conflicting managerial demands, made the risk clear. Immediate steps were required, including reducing her workload and directing her to see a doctor. The appellants’ size and resources meant that they could have ameliorated the position.
4. The availability of confidential counselling did not automatically discharge the duty. The reference to counselling in Hatton v Sutherland [2002] EWCA Civ 76 was not a universal safe harbour. On these facts, counselling could not reduce the workload and could at most have advised medical consultation. Management intervention was required.
5. The respondent’s failure to resign did not eliminate the duty of care. There was no rule that an employee who remained in employment while workplace stress became excessive necessarily lost a right of action. She had been persuaded to stay by an assurance that further assistance would be provided.
6. The judge was also entitled to reject a fixed 2006 cut-off for future earnings. The counterfactual required an assessment of the likelihood and severity of future psychiatric episodes absent the breach. A later episode was possible, but it would not necessarily have been as disabling or prolonged as the illness caused by the breach. The multiplier of six was therefore open to the judge. The court dismissed the appeal on liability and quantum.

1. Court of Appeal (Civil Division) dismissed the appeal against liability and the award for future loss of earnings: [2007] EWCA Civ 70.
2. Queen’s Bench Division, Swindon District Registry, Goldring J, judgment dated 23 May 2006, found the appellants liable in negligence and awarded damages of £134,545.18, including interest.