Deadman v Bristol City Council

An employer’s formal procedure for investigating workplace complaints will usually become contractually binding where it has been published and implemented with the concurrence of employee representatives. General policy statements and aspirations do not ordinarily have contractual force.

Liability for psychiatric injury caused by workplace stress requires reasonable foreseeability of that kind of harm to the particular employee. Indications of impending harm must be sufficiently plain to require a reasonable employer to act.

Contractual damages are recoverable only where the type of loss was within the parties’ reasonable contemplation, when contracting, as a not unlikely result of the assumed breach. A procedural error that foreseeably prolongs a stressful investigation does not, without more, make resulting psychiatric injury sufficiently foreseeable.

The claimant developed depression during an investigation by his employer into an allegation of sexual harassment. The employer’s first investigation panel contained two members rather than the three required by its published procedure. That decision was set aside through the grievance process, and the claimant was informed that a fresh investigation would take place.

His Honour Judge Bursell QC held that the employer had breached contractual duties by failing to handle the matter sensitively and by convening an improperly constituted panel. Although he rejected the common-law negligence claim, he awarded damages because he found that the contractual breaches had caused the illness.

The employer appealed. The central issues were whether the relevant policies and procedures formed part of the employment contract, whether the employer had breached its duty of care, and whether psychiatric injury was too remote a consequence of the admitted procedural breach.

1. Appeal allowed unanimously. The judgment for the claimant was set aside.

2. The Integrated Equalities Policy contained general policies and aspirations and was not apt for incorporation into individual contracts of employment. Its commitment to handling harassment complaints sensitively illustrated the standards expected of the employer. It did not create a separate contractual promise to investigate every complaint sensitively.

3. The formal Procedure for Stopping Harassment in the Workplace stood differently. Where an employer publishes and implements, with employee representatives’ concurrence, formal procedures governing the investigation of complaints, compliance will usually become a contractual term unless and until the procedures are withdrawn by agreement. The requirement for a three-member panel was therefore contractual, and convening only two members was a breach.

4. The employer nevertheless incurred no liability in negligence. The principles governing psychiatric injury from workplace stress applied equally to stress arising from disciplinary or similar employment proceedings. The threshold question was whether psychiatric harm to the particular employee was reasonably foreseeable. The claimant had a long record of robust health, and the employer had no adequate notice that the investigation or the neutral notification of its renewal might cause psychiatric injury. The procedural error itself was also not foreseeably injurious.

5. The psychiatric injury was too remote to support contractual damages. A type of loss is recoverable only if, when the contract was made and the breach assumed, it was within the parties’ reasonable contemplation as a not unlikely result. The parties might have contemplated that an incorrectly constituted panel would require a repeated investigation and create additional stress. They would not have regarded psychiatric injury as a not unlikely result.

6. It was unnecessary to determine causation or apportionment. The court added that a defendant seeking apportionment between multiple causes should plead the issue so that the parties can present the necessary evidence. The employer had not done so and could not raise the issue for the first time on appeal.

• Court of Appeal (Civil Division): The employer’s appeal was allowed unanimously and the judgment against it was set aside.
• High Court, Queen’s Bench Division, Bristol District Registry: His Honour Judge Bursell QC gave judgment for the claimant and awarded damages for psychiatric injury caused by breaches of contract. He rejected liability under the employer’s common-law duty of care.