Judges block stress payouts

Staff suffering from stress at work were today handed the strongest possible warning that the courts are ready to clamp down on compensation payouts.

Senior judges used four test cases in the Appeal Court to issue important new guidelines as three people lost awards totalling nearly £200,000 for stress claims.

Their key decision was that the worker will only be compensated if the signs of stress were plain enough for any reasonable employer to realise that something should be done about it.

Lady Justice Hale said that the onus must be on the employee, not the employer, to take action and "decide whether or not to carry on in the same employment and take the risk of a breakdown in his health or whether to leave that employment and look for work elsewhere before he becomes unemployable".

The judges' guidelines state:

? Employers are generally entitled to take what they are told by employees at face value and do not have to make searching enquiries.

? There are no occupations which should be regarded as dangerous to mental health.

? An employer is usually entitled to assume that the employee can withstand the normal pressures of the job unless he knows of some particular problem or vulnerability.

? To trigger a duty on the part of the employer to take action, indications of impending harm to health arising from stress at work must be plain enough to show that action should be taken.

? Any employer who offers a confidential counselling service with access to treatment is unlikely to be found in breach of duty. If the only reasonable and effective step would be to sack or demote the employee, the employer is not in breach of duty in allowing a willing worker to continue in the job.

The four test cases - three appeals by employers were allowed and a fourth was dismissed but "not without some hesitation" - had resulted from different county courts where judges had awarded damages for negligence against the employers in favour of employees forced to give up work because of stressinduced psychiatric illness.

Two were teachers in comprehensives, one an administrative assistant at a local authority training centre, and the other a factory worker.

A spokesman for the Institute of Directors welcomed the ruling as a "long overdue" redressing of the balance in stress cases. He said the guidelines should make it easier for businesses to defend themselves against stress complaints from staff.

In the first case, French teacher Penelope Hatton retired on ill health grounds in 1996 and was awarded £90,765 damages at Liverpool County Court after suing St Thomas Becket RC High School.

The judges granted the appeal after finding that Mrs Hatton's periods off work and her depression before she finally left were "readily attributable" to causes other than stress in her job, about which she had not complained.

Leon Barber, a secondary school head of mathematics, sued Somerset County Council and won £101,041 damages at Exeter County Court last year after he ceased work on medical advice in 1996.

Granting the appeal, the judges said the school had been under pressure but this had not greatly affected the maths department. Melvyn Bishop worked for Baker

Refractories until 1997 when he had a mental breakdown and attempted suicide.

He was dismissed the next year after failing to return to work and won damages of £7,000 at Leeds County Court in 2001. The appeal judges said the factory where Mr Bishop worked had been taken over by an American company and new shift patterns introduced.

Mr Bishop found it hard to adjust and asked his manager if he could go back to his old job, which no longer existed. His GP advised him to change his job, but Mr Bishop did not tell his bosses.

Lady Justice Hale said: " There was nothing unusual, excessive or unreasonable about the demands placed on Mr Bishop by his work. The sad fact was that he was unable to cope with the changes."

In the only case which was dismissed, training centre administrative assistant Olwen Jones had sued Sandwell Borough Council after going sick in 1995 with anxiety and depression and never returned to work.

Birmingham County Court awarded her £157,541 damages after hearing she had to work "grossly excessive hours" and do the work of two or three people.

She had complained of overwork and unfair treatment to her immediate managers from an early stage.

The county court judge also found that she had been harassed by her superiors and threatened with losing her job. Lady Justice Hale said that although there was no specific medical event which might have warned her employers of the risk of a breakdown, they did know excessive demands were being placed on her.

Doug McAvoy, general secretary of the National Union of Teachers, said of today's Appeal Court ruling: "Employers who disregard their responsibilities over workplace stress can take no comfort from this decision."