Frank Shortt -v- Royal Liver Insurance Ltd
High Court
Judgment delivered on October 21st, 2008, by Ms Justice Mary Laffoy
Judgment
Ms Justice Laffoy dismissed a claim for personal injury damages caused by the stress of disciplinary action and job transfer at work on the basis that the harm suffered was not "reasonably foreseeable". She also said she was not satisfied the plaintiff had suffered an injury which was not ordinary occupational stress.
Background
The court heard the plaintiff, Frank Shortt, who was a district sales manager for the southwest Dublin area, was the subject of a disciplinary hearing by his employer, Royal Liver Insurance Ltd, in September 1997. It was claimed he had raised his voice to his personal assistant, had behaved aggressively, was hostile, and had intimidated her after she took a day off work to care for her sick son the previous July. She complained through her union, and disciplinary proceedings began.
Mr Shortt was suspended with pay from August 1st until the hearing, undertaken by his divisional manager Derek Brennan, was completed. He attended the hearing with his union official. Mr Brennan raised issues about his past behaviour at the hearing.
Afterwards Mr Shortt was issued with a final warning and told any repetition of his behaviour would lead to further action against him.
He was also told his annual staff bonus would be withheld and the final warning would lapse after a year. Mr Shortt appealed his case internally, but the decision was upheld.
He returned to work on September 10th. His personal assistant was moved to a different department. She complained she was being punished, and said she should be reappointed as personal assistant to the district sales manager for southwest Dublin.
However, she said she did not want to work with Mr Shortt. She threatened legal action, but finally left employment in June 1998 after taking voluntary redundancy.
In February 1998, the company was restructured and Mr Shortt was told to transfer to the position of district manager for Dublin west. He complained the transfer was an additional penalty imposed on him as part of the disciplinary action. He said he would lose income because of the move.
This was denied and he was given written assurances that his income would be maintained.
However, he refused to transfer and was suspended. He then began legal action against the company. He sought an interlocutory injunction to prevent it from transferring him, but this was rejected and he returned to work. He stayed with the company until January 2004, when he took voluntary redundancy.
The court also heard Mr Shortt attended his doctor in September 1997 and February 1998 suffering from stress, but never told the company of his problems.
Counsel for Mr Shortt argued the disciplinary action taken by Royal Liver Insurance Ltd was wrong, unlawful and in breach of Mr Shortt's rights to natural and constitutional justice.
He had not been allowed to cross-examine his personal assistant about her complaint and Mr Brennan had pre-judged the disciplinary hearing because he brought up Mr Shortt's previous behaviour.
He also argued the decision to transfer was an additional sanction and was unlawful.
He said Mr Shortt was entitled to damages for breach of contract and loss of earnings due to the transfer, as well as damages for personal injuries due to stress.
Counsel for the defendant said the final warning against Mr Shortt had lapsed after a year and his bonus was restored to him, so he had not been prejudiced in any way.
Decision
Ms Justice Laffoy said the sanction imposed on Mr Shortt in 1997 did not in any real sense militate against him, either financially or in career terms.
She said she was not satisfied that Mr Shortt had established his employers acted unlawfully or in breach of his contractual or constitutional rights. She also said she was satisfied the disciplinary process was conducted in accordance with the company's procedures.
She said the essential question was whether, given the refusal of the personal assistant to submit to being questioned, Mr Shortt was likely to be exposed to the risk of an unfair hearing. She decided he was not and said Mr Brennan was entitled to conclude it was likely there would be a detrimental effect on the personal assistant if she was confronted by Mr Shortt or someone on his behalf.
Ms Justice Laffoy said it was true Mr Brennan came to the disciplinary hearing with the belief Mr Shortt was capable of aggressive behaviour, but he had made that clear and had given Mr Shortt's representative the opportunity of addressing it.
In relation to the transfer of Mr Shortt from the Dublin southwest to the Dublin west district, Ms Justice Laffoy said she could find no basis for concluding that the plaintiff was deprived of the opportunity to earn higher remuneration.
She said even if the threat of litigation by the personal assistant was a significant factor in the decision to transfer Mr Shortt, it would not justify the conclusion that the move was an additional sanction, because it was impossible to conclude the decision resulted in financial detriment to Mr Shortt.
In relation to the personal injury claim for stress, Ms Justice Laffoy said the circumstances in which an employer is liable for the consequences of work-related stress had been outlined by Clarke J in Maher v Jabil Global Services Ltd .
The ruling stated the plaintiff must have suffered stress which could not be described as ordinary occupational stress; which could be attributable to the workplace; and was reasonably foreseeable in all the circumstances.
Ms Justice Laffoy said even if she was satisfied that Mr Shortt suffered an injury caused by his treatment in the workplace, which she was not, the harm he alleged he suffered was not reasonably foreseeable.
She said while it was reasonable to assume that disciplinary proceedings and a job transfer against one's will would cause stress, they were events which occur in the normal course of business. "In the absence of any reason for a contrary conclusion, an employer is entitled to assume that an employee is able to withstand such stress," Ms Justice Laffoy said.
She said the company had no way of knowing Mr Shortt was suffering from stress and pointed out that he had deliberately, if understandably, concealed the fact. She dismissed the plaintiff's claim.
The full text of this judgment is available on www.courts.ie
Mark G Connaughton SC and Oisin Quinn BL, instructed by Keith Walsh Solicitors, for the plaintiff; Frank Callanan SC and Marcus Dowling BL instructed by Mason, Hayes + Curran, for the defendant.