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Law Bulletin - September 2007

Stress and breach of contract claims

The Court of Appeal has held that the way an employer investigated a complaint of harassment against an employee did involve a breach of his contract of employment but the breach was not foreseeably likely to cause him psychiatric injury. So he lost his claim for depression.

There had been an allegation of sexual harassment against the claimant. His employer, a local authority, had published formal procedures for investigating such complaints. This policy formed part of his contract of employment. The policy said that a panel of three people should investigate allegations like this. However, there were only two members on the panel that initially upheld the complaint against the complainant.

A committee then overturned that decision against him. Sometime after, it was decided a fresh investigation should be held and a new panel brought together. The decision to reinvestigate was passed on to the claimant by a letter left while he was away from his desk at work. Shortly after this, he left work due to depression.

The Court of Appeal found that, while the local authority had broken the contractual term that three members be present on the panel, it was not foreseeable that such a breach of contract would cause the claimant harm.

The claimant had also said that leaving a letter on his desk was a foreseeable cause of injury because passing on grave news such as another investigation in this manner would cause him depression. The Court of Appeal rejected that this method of communication could foreseeably cause him further injury, and added nothing in his previous manner in response to the allegations would have given a sign such injury would arise .

Michael John Deadman -v- Bristol City Council (2007) [2007] EWCA Civ 822.

Comment: this does not mean a breach of contract cannot be used for a claim for psychiatric injury. There have been cases where an unfounded suspension and / or a protracted, incompetent investigation leaving the charge up in the air have been found to breach the contract between employer and employee. But this case shows the need to foresee psychiatric injury from the breach .