Darren Cavanaugh v Folsana Pressed Sections Limited

An employer may suspend an employee pending investigation where a genuine complaint raises serious issues and a fair investigation would be difficult with the employee remaining at work. Suspension need not ordinarily be preceded by warning or detailed explanation. The question is whether the employer had reasonable and proper cause, assessed objectively by reference to the circumstances known at the time.

Psychiatric injury from a one-off disciplinary act is not usually foreseeable without indications of pre-existing vulnerability, although the inquiry remains fact-specific. Mental-health notifications do not automatically require occupational-health referral or further adjustments where the employee is receiving treatment and the employer makes the adjustments requested. The claim failed because there was no breach, no relevant foreseeability, and no causative loss.

Mr Cavanaugh claimed damages for psychiatric injury against his former employer, arising from his suspension, investigation and disciplinary proceedings before his summary dismissal for gross misconduct. He alleged breaches of the implied contractual duty of mutual trust and confidence and of the common-law duty to provide a safe system of work.

The claim excluded injury caused by the dismissal itself, following Johnson v Unisys [2003] 1 AC 518. The issues were whether the suspension and its aftermath were without reasonable and proper cause, whether the seven mental-health notifications created a duty to take further protective steps, and whether any breach caused compensable injury.

1. Claim dismissed. Folsana had reasonable and proper cause to suspend Mr Cavanaugh. Mr Donnelly’s genuine resignation and grievance raised serious allegations of bullying and intimidation, referred to other employees, and required investigation. Suspension was a reasonable protective measure rather than a knee-jerk reaction.

2. The manner of suspension did not breach duty. There was no general obligation to give prior warning or a detailed explanation before suspending an employee pending investigation. The private manner of the suspension, collection of company equipment, and absence of fixed terms of reference were reasonable in the circumstances. The widely distributed email was heavy-handed and misjudged, but was sent to protect the business and did not amount to a contractual breach.

3. The objective test was whether the employer’s action fell outside the range of reasonable decisions open to it in the circumstances known at the time. That inquiry was highly fact-specific. The same conduct could in principle breach both the implied contractual duty of mutual trust and confidence and the common-law duty of care.

4. Psychiatric injury was not reasonably foreseeable from the suspension or its immediate aftermath. The events were stressful, but there were no prior indications of psychiatric vulnerability. The principles concerning occupational psychiatric injury applied to a one-off disciplinary act.

5. The mental-health notifications did not place Folsana on notice of an impending risk of further psychiatric harm requiring additional intervention. Mr Cavanaugh stated that he was receiving medical care, did not say that the process was causing further injury, and did not request occupational-health assistance. Folsana postponed meetings, permitted written submissions, granted a neutral venue and made the other adjustments requested.

6. There was in any event no causative loss. Mr Cavanaugh would have suffered the same reaction to the disciplinary process and dismissal even if the process had been handled differently. The later evolution of his condition was attributable to the dismissal and subsequent events, for which damages were unavailable.