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Court of Appeal rules in favour of employer on remoteness of depression arising from disciplinary process (Yapp v Foreign and Commonwealth Office [2014])

Nowadays, employers have a range of duties and obligations when ensuring the health and safety of their employees, with common law duties to take reasonable care for the health and safety of employees and implied terms in all contracts of employment that employers must not, without reasonable and proper cause, conduct themself in a manner calculated or likely to destroy or seriously damage the relationship of trust and confidence.

Facts

In the recent case of Yapp v Foreign and Commonwealth Office, Mr Yapp was withdrawn from his post as the British High Commissioner in Belize following confidential allegations against him regarding his sexual misconduct at public functions and his bullying and harassment of his staff. Mr Yapp was then suspended pending the outcome of an investigation. Mr Yapp received no prior notice of the allegations and the FCO simply explained that the allegations made his position operationally untenable and that if the investigation exonerated him they would do their best to find him another posting. The investigation subsequently undertaken found that only the allegations of bullying could be substantiated. Mr Yapp was given a final written warning lasting 12 months.

Following conclusion of the disciplinary process, Mr Yapp became depressed. His suspension was formally lifted in November 2008 but he was unable to return to work due to depression and remained on sick leave. Mr Yapp was considered fit for work in April 2009 but no appropriate job was identified. In August 2010, Mr Yapp was again certified unfit for work as result of depression and he remained on sick leave until his retirement in January 2011.

In May 2011, Mr Yapp commenced proceedings against the FCO claiming they were in breach of:

  • The express terms of his contract governing withdrawal and the disciplinary process.
  • The implied term of mutual trust and confidence.
  • The common law duty of care.

Mr Yapp alleged that the stress resulting from these breaches caused his depressive illness, which both constituted damage itself and led to pecuniary loss as he was unable to return to work.

To succeed in stress claims, employees must established that the loss suffered was caused by the employer's breach but was not too remote. For beach of common law duties this means that the type of damage must be reasonably foreseeable as liable to happen at the time the duty was breached (unless the risk is so small that a reasonable person would in the circumstances feel justified in neglecting it). For breach of the implied term of trust and confidence, the loss must arise naturally, according to the normal course of things, from the breach of contract itself and such loss may reasonably be supposed to have been in the contemplation of the parties at the time they made the contract, as a probable result of the breach.

Decision

The Court of Appeal held that the withdrawal of Mr Yapp from his post caused his depression, as the fact that the depression did not develop immediately after his withdrawal did not mean that it was not the main cause. However, the Court of Appeal also held that the losses suffered by Mr Yapp were too remote and Mr Yapp was therefore not entitled to damages for his depressive illness or the financial loss that flowed from it.

When making their decision the Court of Appeal focused on the test for breach of common law duty as this is an easier test to satisfy than in relation to breach of contract. The Court of Appeal found that it was not reasonably foreseeable that Mr Yapp's withdrawal would cause psychiatric injury. Referring to case law on reasonably foreseeability, Mr Yapp's depression was not reasonably foreseeable as there was no reason that the FCO should or were aware of an issue or psychological vulnerability on the part of the employee.

Thoughts for employers

Although the finding in this case is favourable to employers, it is also a warning to employers that if they know or should know about any vulnerability in their employees they may, at the very least, breach common law duties of care. Employers should encourage employees to talk about how they are feeling and any issues they may have so employers can deal with their staff appropriately and avoid the risk of claims for breach of duty. Having a ten minute conversation with your employees could save you the time and expense of defending a breach of duty claim.

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