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THE HIGH COURT

[2004] IEHC 342.

RECORD NO. 10331P/2003

BETWEEN/

JAMES McGRATH

PLAINTIFF

AND

TRINTECH TECHNOLOGIES LIMITED

AND TRINTECH GROUP PLC

DEFENDANT

Judgment of Miss Justice Laffoy delivered on 29^th October, 2004.

Factual background to the proceedings in outline

These proceedings arise out of the employment by the plaintiff, who is approaching 38 years of age, with the first defendant, which, as I understand it, is a subsidiary of the second defendant. The second defendant was originally joined in these proceedings because it was apprehended that it purported to terminate the plaintiff's employment with effect from September, 2003. The second defendant, with its subsidiaries and associated companies, is involved in information technology on a worldwide basis, in particular, the development of software for processing credit card transactions and other financial payment solutions. It is listed on the Nasdaq in New York and in the Neuermarkt in Frankfurt. Its main office is in Dublin but it also has offices in Dallas, in Potters Bar in the United Kingdom, in Frankfurt and in Montevideo. In reality, there is only one defendant in these proceedings: the company which employed the plaintiff.

During the period 1988 to 1998 the plaintiff lived in the United States of America and worked in the information technology sector, where he gained considerable experience. On his return to Ireland in 1998 he worked on a consultancy basis for various financial institutions and companies involved in information technology.

The plaintiff's initial working relationship with the defendant was on contractual basis. In April, 2000 he was retained on contract as a project manager. That relationship changed in July, 2000, when he became an employee in the role of Senior Project Manager on the terms of a written contract of employment to which I will refer later. In December, 2001 the plaintiff was promoted to the position of Director of Professional Services. His immediate superior between July, 2000 and December, 2001 was Martin Downes, who was then the Director of Professional Services. Thereafter, he continued to report to Mr. Downes, who had been promoted to the position of Vice-President of Professional Services, until January, 2003.

While contracted as a project manager and employed as a senior project manager, the plaintiff worked on projects which took him on foreign assignments. During his first two and a half years with the defendant he suffered bouts of ill health of a physical nature, in particular, in the autumn of 2000, following an assignment in Korea, in April, 2001, while on assignment in South Africa, and in October and November, 2002.

While on sick leave in October/November, 2002, he was requested by the defendant to go on an assignment to Uruguay to work in a Uruguayan company, Sursoft SA, which had been acquired by the defendant in 1999. He acceded to the request and was working in Uruguay from mid-January, 2003 until the end of June, 2003, a period slightly in excess of five months. One aspect of the plaintiff's claim is that he alleges that during this period he was subjected to grave work related stress and pressure which resulted in injury to his psychological health and well-being. Another is that the terms of his employment were varied when he took up the assignment to Uruguay.

Following his return from Uruguay in late June, 2003, the plaintiff did not return to work. He was absent on certified sick leave.

On 26^{th August, 2003, the plaintiff was informed by Mr. Downes and by Mr. Gerry Cleary, the Director of Human Resources, that he was being made redundant with effect from 26th} September, 2003. He was one of twelve out of one hundred and thirty employees in the Dublin office whom the defendant decided to make redundant at that time with the objective, according to the defendant, of cost-cutting against the background of a sluggish global market for the defendant's products and services. On the same day written details of the "redundancy package" were furnished to him. The package envisaged the plaintiff receiving a total payment of €27,536.52 to cover one month's pay in lieu of notice, four weeks' pay per year of service worked "including statutory redundancy" and holidays owing. The plaintiff would be required to sign a disclaimer acknowledging that the payment was in full and final settlement of all claims at common law or under statute arising from his employment and its termination.

The plaintiff did not accept that the defendant was entitled to make him redundant. His case was that when he took up the assignment to Uruguay he had been guaranteed that the company would retain him for a year in the post of Director of Professional Services following his return. He was also of the view that the method of his selection for redundancy was unfair and invalid.

These proceedings were instituted on 11^{th September, 2003. On 24th} September, 2003, on an interlocutory application, the plaintiff obtained an order from this court (O'Donovan J.) restraining the defendant from dismissing or attempting to dismiss him on grounds of redundancy or for any other grounds pending the trial of the action. The effect of the order Is that the defendant has continued to pay the plaintiff's basic salary.

The relief claimed in the proceedings

In these proceedings the plaintiff claims, inter alia, the following reliefs:

"1. A declaration that the purported removal of the plaintiff from his employment with the defendant employer on the ground of redundancy is wrongful and/or unfair.

2. A declaration that the selection of the plaintiff for dismissal on the grounds of purported redundancy in his employment with the defendant herein is unfair, unreasonable, discriminatory and not made in a bona fide manner.

3. A declaration that the removal and/or attempted removal and/or dismissal of the plaintiff on the grounds of purported redundancy is in breach of the express and/or implied contractual terms between the parties in the employment contract.

4. A declaration that the notice of redundancy served on the plaintiff claiming redundancy with effect from 26^th September is null, void and of no effect.

5. Damages for breach of contract.

6. Damages for wrongful dismissal.

7. An order directing the re-engagement or reinstatement of the plaintiff with the defendant company if necessary.

8. Damages for personal injury and loss of good health, damage and expense.

9. Damages for breach of trust . . . "

The bases on which the plaintiff claims to be entitled to the declaratory reliefs sought, as pleaded and as are to be deduced from the comprehensive written submissions put before the court by counsel for the plaintiff, may be summarised as follows:

(a) that it was expressly or impliedly provided in the plaintiff's contract of employment that the defendant –

(i) would not dismiss or attempt to dismiss him without due cause and without reasonable notice or consultation,

(ii) would act fairly and reasonably towards him in any review and selection process in relation to consideration for dismissal or redundancy, and

(iii) would adopt fair procedures in any review or selection process for dismissal or redundancy;

(b) that there was an express or an implied contractual term that if the plaintiff was on certified sick leave, reliant on the prospect of permanent health insurance cover, the defendant would not dismiss him in those circumstances thereby depriving him of the benefit of the permanent health insurance benefit should the need arise; and

(c) that it was expressly agreed in January, 2003 that if the plaintiff accepted the assignment in Uruguay, he would be guaranteed twelve months' security of tenure as Director of Professional Services on his return.

The defendant denies that any such terms were part of the contractual relationship between the plaintiff and the defendant. Aside from that, it is contended on behalf of the defendant that whether or not the plaintiff's position was redundant on 26^{th August, 2003 is irrelevant to the right of the defendant to terminate the plaintiff's contract of employment and that, as a matter of legal principle, the plaintiff is not entitled to the declaratory relief claimed in relation to redundancy.}

Redundancy: the legal principles

It is the defendant's case that the concept of "redundancy" is a creature of statute – the Redundancy Payments Act, 1967 and the Unfair Dismissals Act, 1977, as amended. The legislative scheme prescribes the circumstances in which a redundancy can be challenged and the remedies available. Courts only have jurisdiction in the circumstances prescribed by the legislation. The remedies provided under the legislation for unfair dismissal are not remedies available to a plaintiff in an action at common law for wrongful dismissal.

The defendant relies on a number of authorities in support of these propositions.

In Parsons v. Iarnród Éireann [1997] E.L.R. 203, the issue was whether the plaintiff was precluded, by virtue of the provisions of s. 15 of the Act of 1977, from bringing an action at common law in respect of a dismissal which had previously been the subject of a claim to a Rights Commissioner under the Act of 1977. Explaining the relationship of the statutory code to the common law jurisdiction, in delivering judgment in the Supreme Court, Barrington J. stated as follows (at p. 207):

"What the Unfair Dismissals Act, 1977 does is to give the worker who feels that he has been unfairly dismissed an additional remedy which may carry with it the very far-reaching relief of reinstatement in his previous employment. It does not limit the worker's rights, it extends them. At the same time, s. 15 of the Unfair Dismissals Act provides that the worker must choose between suing for damages at common law and claiming relief under the new Act. Sub-section (2) accordingly provides that if he claims relief under the Act he is not entitled to recover damages at common law; while sub-section (3) provides that where proceedings for damages at common law for wrongful dismissal are initiated by or on behalf of an employee the employee shall not be entitled to redress under the Unfair Dismissals Act in respect of the same dismissal.

The traditional relief at common law for unfair dismissal was a claim for damages. The plaintiff may also have been entitled to declarations in certain circumstances such as, for instance, that there was an implied term in his contract entitling him to fair procedures before he was dismissed. But such declarations were in aid of the common law remedy and had no independent existence apart from it. If the plaintiff loses his right to sue for damages at common law the heart has gone out of his claim and there is no other free-standing relief which he can claim at law or in equity."

In Sheehy v. Laurence Ryan and James Moriarty (an unreported judgment of this court (Carroll J.) in which judgment was delivered on 3^rd February, 2004) the plaintiff sought, inter alia, a declaration that the purported termination of her tenure by the defendant was invalid and unlawful on the ground, inter alia, that it was without efficacy in that it had been embarked upon in breach of the tenets of natural and constitutional justice and was predicated on an invalid invocation of the provisions of the Redundancy Payments Act, 1967 (as amended). She also sought an injunction restraining the termination of her employment. In dismissing her action, Carroll J. stated as follows:

"The plaintiff has chosen to sue at common law. There were other possibilities open to her. She could have initiated proceedings under the Unfair Dismissals Act, 1977 claiming unfair dismissal or under the Redundancy Payments Act claiming that there was no valid redundancy or that she was unfairly chosen to be redundant. If successful she would have been awarded statutory compensation.

The position at common law is that an employer is entitled to dismiss an employee for any reason or no reason, on giving reasonable notice."

In relation to the plaintiff's claim that the principles of natural and constitutional justice applied to the decision to dismiss her, Carroll J. referred to the decision of Gannon J. (affirmed on appeal by the Supreme Court) in Hickey v. Eastern Health Board [1991] 1 I.R. 208 where it was held that the rules of natural justice regulating dismissal for misconduct had no application where the dismissal was for reasons other than misconduct.

Counsel for the defendant also referred to the decision of the House of Lords in Johnson v. Unisys Limited [2001] 2 All E.R. 801. In that case, the plaintiff, who had been the beneficiary of an award from a statutory industrial tribunal, which had upheld his complaint that he had been unfairly summarily dismissed, initiated a civil action against his employer for breach of contract and negligence alleging that the manner of his dismissal had caused him to suffer a nervous breakdown and had made it impossible to find work. He relied, inter alia, on the implied term of mutual trust and confidence between an employer and an employee, which was endorsed by the House of Lords in Malik v. BCCI [1997] 3 All E.R. 1, contending that the employer had breached that term by failing to give him a fair hearing and by breaching its disciplinary procedure. The employer applied to have the particulars of claim struck out on the ground that they disclosed no reasonable cause of action at common law. The House of Lords held that an employee had no right of action at common law to recover financial losses arising from the unfair manner of his dismissal. In a short speech, which was quoted in part with approval by Carroll J. in Orr v. Zomax Limited (unreported judgment delivered on 25^th March, 2004), Lord Nicholls of Birkenhead stated:

"On this appeal the appellant seeks damages for loss he claims he suffered as a result of the manner in which he was dismissed. He uses as his legal foundation the decision of the House in Malik . . . , although this was not a manner of dismissal case. In principle the appellant's argument has much to commend it. I said so in my obiter observations in Malik's case . . . but there is an insuperable obstacle: the intervention of Parliament in the unfair dismissal legislation. Having heard full argument on the point, I am persuaded that a common law right embracing the manner in which an employee is dismissed cannot satisfactorily co-exist with the statutory right not to be unfairly dismissed. A newly-developed common law right of this nature, covering the same ground as the statutory right, would fly in the face of the limits Parliament has already prescribed on matters such as classes of employees who have the benefit of the statutory right, the amount of compensation payable and the short time limit for making claims. It would also defeat the intention of Parliament that claims of this nature should be decided by specialist tribunals, not the ordinary courts of law . . ."

On the basis of the foregoing authorities, it was submitted by counsel for the defendant that it is quite clear that in these proceedings the plaintiff has no right to claim any remedy other than damages at common law and, in particular, has no right to invoke statutory rights or claim declaratory relief in the form sought.

The first point to be made in relation to that submission is that the plaintiff has not invoked any statutory provision in support of his claim. Although decisions of the Employment Appeals Tribunal were cited, I did not understand the plaintiff to argue that the principles applicable under the statutory scheme should be imported into common law. On the authority of the judgment of Carroll J. in the Orr case, it would not have been open to them to do so. His claim is grounded entirely in the common law – in contract and tort. In particular his claims for declaratory relief are based on the express or implied terms which he contends for, not on any statutory protection. On the authority of the decision of the Supreme Court in the Parsons case, however, the plaintiff is not entitled to any declaration which extends beyond the ambit of the contractual rights which he establishes and the breach of those rights. On the same authority, the only other remedy to which he is entitled, if he establishes his claim in contract, is damages.

The Issues

Accordingly, in my view, in broad terms, the issues for determination on liability are as follows:

(1) Whether the plaintiff has established a claim in contract for wrongful dismissal and other breaches of the terms of his contract?

(2) Whether the plaintiff has established a claim in tort for personal injuries?

These are discrete issues which will be dealt with separately.

The contract of employment

The plaintiff's contract of employment with the defendant was dated 6^{th July, 2000. It was in the form of a letter offering him the position of project manager and setting out the details of the remuneration package which consisted of a base salary, performance-related bonus, stock options and VHI cover. Attached to the letter was "a Statement of Terms and Conditions of Employment". The plaintiff was also required to sign a Confidentiality Agreement, but nothing turned on that in these proceedings.}

The provisions of the Statement of Terms and Conditions of Employment which are pertinent to the issues in these proceedings were as follows:

? The provision in relation to sick leave and pay, which provided that absence due to illness should be notified as early as possible, a medical certificate was required for an absence in excess of two consecutive days, and the management reserve the right to request a medical certificate for any absence irrespective of duration. Further details were to be found in the defendant's staff handbook in the section on medical leave. The handbook was not put in evidence. However, the evidence of the prevailing policy in 2003 was that, subject to production of medical certificates as required, salary would be paid for twenty six weeks while on certified sick leave, whereupon the PHI benefit referred to later would become operative.

? Under the heading of transferability, it was provided that the company reserved the right to transfer staff between Head Office, branches and subsidiary companies.

? Under the heading of Termination of Employment, it was provided as follows

"One month's notice will be required for the termination of employment. Employees are requested to confirm a resignation in writing, confirming the date when he/she shall cease."

The terms and conditions of employment were augmented in January, 2001 when a scheme for long-term disability benefit was introduced. On 29^{th January, 2001 the plaintiff and all other employees were notified that the defendant was introducing Permanent Health Insurance (PHI) to its current list of benefits for all full-time, permanent employees of the defendant in Ireland. There was attached to the notification an Explanatory Booklet. The booklet disclosed that the defendant paid the full cost of the scheme. Subject to exclusions and limitations, where an employee was disabled for a period in excess of 26 weeks continuous absence, he or she would be entitled to be considered for a benefit under the scheme. Where eligible, the benefit was equivalent to 50% of salary less the annual rate of State disability pension payable to a single person. Disability benefit would increase during payment at the rate of 3% per annum compound, subject to a maximum of the increase in the Consumer Price Index over the same period. In relation to when the benefit would cease, the booklet provided as follows:}

"The payment, once granted, will continue while disability lasts or until one of the following occurs:

(i) Attainment of age 65

(ii) Death

(iii) Recovery

(iv) Termination of Employment"

It was provided that the scheme could be amended or discontinued by the defendant at any time and that the defendant might, at its discretion, change the insurer and the policy terms through which the scheme was insured and by which it was governed. It was further stated that the insurer also reserved the right to amend or cancel the terms of the policy. When the scheme commenced on 1^{st February, 2001, the insurer was Eagle Star Assurance Company Limited. By September, 2003 the insurer had been changed to Friends First which, following Mr. Cleary's intervention on behalf of the plaintiff, quoted a premium for continuation of the PHI cover, which the plaintiff did not pursue.}

There is no other documentation evidencing the terms and conditions on which the plaintiff was employed by the defendant. However, it is necessary to consider whether, as pleaded by the plaintiff, his contract was subject to implied terms on the lines set out earlier. As the question whether the existence of the PHI cover gave rise to an implied term on the lines contended for necessitates consideration of authorities directly in point cited on behalf of the plaintiff, I will deal with that issue separately. It is also necessary to consider whether, on the evidence, the plaintiff has established that the additional terms he contends were agreed in January, 2003 prior to his departure for Uruguay were in fact expressly agreed.

Implied terms: dismissal/redundancy

In support of their submission that it is settled law that the employment relationship is governed by an implied term of mutual trust and confidence, counsel for the plaintiff referred to Redmond on Dismissal Law in Ireland (2^{nd Edition, 1998, Butterworth's) at para. 2.11 where the evolution of the implied terms of mutual trust and confidence in a contract of employment is analysed. It is stated that the modern approach is prescriptive: the mutual duty of trust and confidence obliges the parties in the contract of employment to behave towards one another in a way which respects trust and confidence and enables it to flourish between them. On the employer's side, it is suggested, his prescriptive duty not to do anything to destroy the relationship of confidence translates,} inter alia, into a duty to provide fair procedures in disciplinary matters, a prescriptive duty already endorsed in this jurisdiction in the Constitution.

The question which arises here is whether that broad principle can accommodate the implication in the contractual relationship of the plaintiff and the defendant of terms that the plaintiff would not be dismissed without due cause or without reasonable notice or consultation and that the defendant would adopt fair procedures in any review or selection process for dismissal or redundancy, the breach of which would give rise to an action at common law. In contending that it cannot do so in such a manner as to give rise to an inconsistency or conflict with another contractual term governing the relationship of the parties, the defendant referred to the speech of Lord Hoffman in the Johnson case. In his speech (at p. 816), having acknowledged that the contribution of the common law to the employment revolution has been by the evolution of implied terms in the contract of employment, the most far-reaching being the implied term of trust and confidence, Lord Hoffman went on to say:

"The problem lies in extending or adapting any of these implied terms to dismissal. There are two reasons why dismissal presents special problems. The first is that any terms which the courts imply into a contract must be consistent with the express terms. Implied terms may supplement the express terms of the contract but cannot contradict them. Only Parliament may actually override what the parties have agreed . . ."

On the facts of the Johnson case, Lord Hoffman stated that, in the face of the express provision in Mr. Johnson's contract that Unisys was entitled to terminate his employment at four weeks' notice without any reason, it was very difficult to imply a term that Unisys should not do so except for some good cause and after giving reasonable opportunity to demonstrate that no such cause existed.

Lord Steyn, who dissented on the issue as to whether Mr. Johnson had a reasonable cause of action based on breach of the implied obligation of trust and confidence, took a different view. Commenting on the argument by counsel for Unisys that to apply the implied obligation of mutual trust and confidence in relation to a dismissal was to bring it into conflict with the express terms of the contract, he said:

"Orthodox contract law does not permit such a result. His argument approached the matter as if one was dealing with the question whether a term can be implied in fact in the light of the express terms of the contract. The submission loses sight of the particular nature of the implied obligation of mutual trust and confidence. It is not a term implied in fact. It is an over-arching obligation implied by law as an incident of the contract of employment. It can also be described as a legal duty imposed by law – Treitel The Law of Contract (10^th Edn, 1999) at p.190. It requires at least express words or a necessary implication to displace it or to cut down its scope. Prima facie it must be read consistently with the express terms of the contract. . . . The interaction of the implied obligation of trust and confidence and express terms of the contract can be compared with the relationship between duties of good faith or fair dealing with the express terms of notice in a contract. They can live together."

However, Lord Steyn went on to state that the notice provision in the contract was valid and effective, but the employer may become liable in damages if he acts in breach of the independent implied obligation by dismissing the employee in a harsh and humiliating manner. That would give rise to no conflict between the express and implied terms.

The essence of the plaintiff's case, however, is that there should be implied into his contract with the defendant a term that mere compliance with the express notice provision in the contract would not validly and effectively terminate the contractual relationship at common law. There is no authority for this proposition. I am persuaded by the authorities cited by the defendant's counsel that the proposition is not sound in principle. Accordingly, I have come to the conclusion that terms in relation to dismissal and redundancy on the lines pleaded by the plaintiff cannot be implied into the plaintiff's contract of employment with the defendant so as to give rise to a cause of action at common law. Such protection and remedies as are afforded by statute law to the plaintiff in the circumstances which prevailed in August, 2003 cannot be pursued at first instance in a plenary action in the High Court.

Implied term: PHI

In support of the contention that it was an implied term of the plaintiff's contract of employment that the defendant would not make the plaintiff redundant in circumstances that would deprive him of the benefit of the permanent health insurance, counsel for the plaintiff cited a number of authorities of courts in the United Kingdom, which it was submitted should persuade the court that it is appropriate to imply such a term. The authorities in question are:

    the decision of the High Court of England in Aspden v. Webbs Poultry and Meat Group (Holdings) Limited [1996] I.R.L.R. 521;

    the decision of the Outer House of the Court of Session in Scotland in Hill v. General Accident Fire & Life Assurance Corporation [1998] I.R.L.R. 641;

    the decision of the High Court of England in Villella v. MFI Furniture Centres Limited [1999] I.R.L.R. 468;

    the decision of the Court of Appeal in Briscoe v. Lubrizol Limited [2002] I.R.L.R. 607.

Counsel for the defendant referred the court to the decision of the English High Court in Jenvey v. Australian Broadcasting Corporation [2002] I.R.L.R. 520. That case is not directly in point, although it did contain a summary of the earlier decisions in the so called "long-term sickness cases".

In essence, all of the cases were concerned with ascertaining what the agreement between the employer and the employee was. This gave rise to particular difficulties in the Aspden case, which is regarded as the source of the jurisprudence. As was pointed out by Sedley J. in his judgment, the written contract of employment presented two peculiarities. First it was entered into during the currency of an established employment relationship which it was not designed to alter and which, at least, de facto, included income replacement insurance for senior staff. Secondly, it had been based on a form of contract drawn for another senior member of staff in a situation which did not include income replacement insurance. In the circumstances Sedley J., considered that there was legitimacy in asking what the parties would have inserted if they had not simply overlooked, as they clearly did, the existence of the insurance scheme, since the contract was not drafted with the scheme in mind. He found that the justice of the case required that there be implied in the contract that, save for summary dismissal, the employer would not terminate the contract while the employee was incapacitated for work.

In the Hill case, Mr. Hill had commenced employment with General Accident in 1988. In March, 1994 he became ill and remained absent from work on medical grounds until his employment was terminated by the employer on grounds of redundancy in November, 1995. The employer's contractual scheme, as set out in the staff manual (Section B8), provided that employees would receive full salary for the first 104 weeks of sickness absence, subject to proper notification, evidence and such like. After 104 weeks absence, employment would be terminated and, dependent upon eligibility, the employer would receive either an ill health retirement pension or sickness and accident benefit. While the staff manual contained provisions regulating procedural arrangements in respect of redeployment and redundancy, neither these provisions nor the provisions in relation to termination contained any express qualification in respect of employees in receipt of sick pay. When Mr. Hill was made redundant he was still in receipt of sickness pay and was some four months away from qualifying for long-term sickness provision. He contended that General Accident were in breach of contract in dismissing him, contending that it was an implied term of his contract of employment that General Accident would not use their contractual powers of dismissal where their use would frustrate an accruing or accrued entitlement under the sickness benefit or health retirement pension scheme. The Outer House of the Court of Session rejected that contention. Lord Hamilton, in his opinion, commented on the Aspden case as follows:

"Insofar as Sedley J.'s conclusion is to be understood as laying down a general proposition that gross misconduct is the only circumstance in which the employer could lawfully dismiss an employee in receipt of sick pay and with the prospect of permanent sickness provision, I must respectfully disagree. No question of a redundancy situation, however arose in that case . . . ."

On the facts before him, Lord Hamilton went on to find as follows:

"In my view, on a sound construction of the pursuer's contract read as a whole, including the implied term of trust and confidence, the defenders were, notwithstanding that the pursuer was at 30 November, 1995 absent from work on grounds of sickness and properly in receipt of full salary under section B8, entitled to dismiss him by reason of redundancy. I reach this conclusion not by according 'a higher priority' to the employer's right of dismissal than to the employee's rights and prospective rights but by declining to afford to the employee's rights under section B8 the absolute character urged by [the pursuer's counsel]. I should add, however, that I do not accept [the defenders' counsel] submission that there is a relevant distinction between the situation [as in Aspden . . . ] where the benefit of the scheme is covered by insurance and the situation [in the present case] where the employer carries out that burden directly."

The judgment of the High Court in the Villella case also illustrates that the task of the court is to ascertain the terms of the employment contract. In that case, the employer's memorandum of the terms of the permanent health insurance scheme was at variance with the insurance policy by which the scheme was underwritten, in that the latter prescribed that entitlement to benefit would cease on the employee leaving service, whereas in the former provision was made for cover under the scheme to terminate if an employee left service when not disabled. Judge Green QC held that the provision of the policy did not form part of the plaintiff's contract as there was no evidence that he was shown or saw the policy or had it drawn to his attention that he could or should read it. On an alternative argument made on behalf of the plaintiff that it was an implied term that the plaintiff would not terminate his contract in the circumstances depriving him of long-term disability benefit in course of payment or due to him, it was held that such an implied limitation on the express power to dismiss was necessary to give business efficacy to the contract to provide disability benefit. On this point, the decision of Sedley J. in Aspden was followed. However, Judge Green QC added that, although it was of no direct relevance to the case before him, he agreed with the observations of Lord Hamilton in the Hill case. The matter was left so that the defendant had power to terminate for redundancy.

The Briscoe case was the first occasion on which the issue was pronounced on by the Court of Appeal, although, as was pointed out by Elias J. in the Jenvey case, in Brompton v. AOC International Limited and UNUM Limited [1997] I.R.L.R. 639, Staughton L.J. expressed the view, obiter, that there was a "good deal to be said" for the view that the employee could not be dismissed save for cause after becoming entitled to receive benefits under a long-term sick scheme. Briscoe was a case in which the issue was whether Mr. Briscoe was entitled to be dismissed for cause – whether he had been guilty of repudiatory conduct justifying his summary dismissal in failing, without explanation or excuse, to attend a meeting with his employers to discuss his position following the insurers' refusal of his claim for benefit under a long-term disability scheme, and in thereafter failing to reply to the employers' request to contact them. The Court of Appeal upheld the decision of the High Court judge that Mr. Briscoe had been guilty of repudiatory conduct and that he had been lawfully dismissed. Ward L.J. considered the scope of the implied term in the context that it was agreed on the pleadings that after Mr. Briscoe had become entitled to receive benefit under the terms of the relevant scheme, his employer, the defendant, would maintain his employment and membership, save that the defendant was contending that since the claimant was in repudiatory breach, he was not entitled to benefit under the scheme. As to the scope of the implied term, he stated as follows:

"It derives from Sedley J.'s judgment in Aspden. He found there was a mutual intention that the provisions for dismissal would not be operated 'otherwise than by reason of the employee's own fundamental breach'. In paragraph 21 he expressed the mutual intention in these terms:

'The mutual intent did not impinge at all upon the ability of the company at any time to accept the employee's repudiatory conduct – for example malingering – as putting an end to the contract and with it the entitlement to insurance benefit.'

However, I agree with Lord Hamilton in Hill . . . at paragraph 34 that:

'Insofar as Sedley J.'s conclusion is to be understood as laying down a general proposition that gross misconduct is the only circumstance in which the employer could lawfully dismiss an employee in receipt of sick pay and with the prospect of permanent sickness provision, I must respectfully disagree.'

To limit dismissal to gross misconduct is to circumscribe the right to dismissal too narrowly. I do not believe Sedley J. had that in mind. I do not believe he would disagree with Lord Hamilton's broader proposition in paragraph 20 of his judgment that

'I accept that the defender's power to dismiss is subject to limitation. Where provision is, as here, made in the contract for payment of salary or other benefit during sickness, the employer cannot, solely with a view to relieving himself of the obligation to make such payment, by dismissal bring the sick employee's contract to an end. To do so would be, without reasonable and proper cause, to subvert the employee's entitlement to pay while sick.'

In my judgment, the principle to emerge from those cases is that the employer ought not to terminate the employment as a means to remove the employee's entitlement to benefit but the employer can dismiss for good cause whether that be on the ground of gross misconduct or, more generally, for some repudiatory breach by the employee."

I am not persuaded by the authorities cited that there should be implied into the plaintiff's contract of employment a term on the lines pleaded. What is suggested is that it was an implied term of the contractual relationship that the defendant would not terminate the plaintiff's contract of employment by notice if two conditions existed: that he was on certified sick leave; and that he was reliant on the prospect of PHI cover. To imply such a term would be inconsistent with the express terms of the contract of employment, in that it was expressly provided that the plaintiff's employment could be terminated on one month's notice and that, even where payment had commenced under the PHI scheme, it would cease on the termination of the employment.

It is instructive to consider what would have been the position at 26^{th August, 2003 which, in my view, is the relevant date, if the plaintiff had the benefit of such an implied term. On that date the plaintiff had been absent from work on certified sick leave for approximately nine weeks. If he could establish that he was reliant on the prospect of permanent health insurance, his employment could not be terminated and he would require to be excluded from the pool of employees from whom persons might be selected for dismissal on the ground of redundancy. As stated by Lord Hamilton in the} Hill case (at para. 22) that would be grossly disadvantageous to fellow employees who were well at the material time.

I appreciate that, unlike the Hill case, which proceeded on the assumption that Mr. Hill's selection for redundancy was genuine, it was the plaintiff's case that his redundancy was not genuine and that his selection was a device to rid the defendant of an employee who was likely to prove to be a liability in the future because of the likelihood of him being on sick leave. That leads back to the question whether the plaintiff can challenge the genuineness of the redundancy in these proceedings. It is clear on the authorities referred to earlier and, in particular, on the authority of the decision of the Supreme Court in Parsons v. Iarnród Éireann that he cannot. Any such challenge is a matter for another forum.

Additional terms agreed in January, 1993?

On his posting to Uruguay the plaintiff was effectively seconded to John Cahill, who, at the time, was the Executive Vice President of Operations in the Enterprise Division of the defendant. Mr. Cahill reported directly to the Chief Executive Officer, Mr. Cyril McGuire. For the duration of the posting, Mr. Downes ceased to be his line manager. It is common case that Mr. Downes told the plaintiff that he should deal directly with Mr. Cahill in relation to the terms of his posting and that the details should be discussed with Mr. Cahill. Mr. Cahill vacated his position with the defendant with effect from 31^{st March, 2003 and is now operating his own software company in the United States of America.}

The plaintiff's evidence was that at a meeting with Mr. Cahill on 15^{th January, 2003, the day before his departure for Uruguay, he raised with Mr. Cahill certain matters in relation to his personal position. This meeting took place against the background that a process of restructuring had been taking place in the defendant's companies in the then recent past resulting in redundancies.}

The plaintiff's evidence was that he raised a number of points with Mr. Cahill among them the following:

(1) that his bonus, which was performance related, would be guaranteed for the ensuing quarters;

(2) that his posting would be for no longer than six months;

(3) that he would be given an assurance that he was guaranteed in the role of Director of Professional Services for one year from the end of his assignment to Uruguay, which was to run from the end of the four weeks' leave referred to at (4), and

(4) that he would be given an additional two weeks (ten days) leave on top of his contractual annual leave at the end of the assignment and that he would be allowed to take four weeks' leave together at that time, two of which would come from his original contractual quota.

The plaintiff's evidence was that Mr. Cahill agreed to all of the foregoing matters.

Mr. Cahill's evidence was that the only matter he agreed with the plaintiff was that he was to be 'made good' on his bonus and his evidence was that that matter was agreed prior to 15^{th January, 2003. My understanding of the evidence was that this was not disputed. As to the other matters, he did not recall any discussion about the plaintiff getting an extra ten days' leave. His evidence was that the issue of four weeks' vacation on the plaintiff's return was not raised at all. On the question of security of t}enure, Mr. Cahill's evidence was that the plaintiff did ask for a guarantee of one year's salary after coming back or a job guarantee of one year. Mr. Cahill's evidence was imprecise as to what the plaintiff asked for – whether it was one year's guaranteed employment or one year's severance. At any rate he categorically testified that he told the plaintiff that he was not in a position to give him any such guarantee and that the plaintiff did not mention it again. He did not have authority to give such commitment without the imprimatur of the Chief Executive Officer, Mr. McGuire. Mr Cahill's evidence was that he 'actioned' the plaintiff's bonus by talking to Mr. Downes. There is documentary evidence that Mr. Downes made arrangements which ensured that the plaintiff would receive his quarterly bonus notwithstanding that he was involved in activities in Uruguay which were not directly revenue generating. It is not in dispute that the duration of the plaintiff's posting was to be no longer than six months. Mr. Cahill's evidence was that by 15^{th January, 2003 he considered that the plaintiff was going to Uruguay, that he did not expect that the plaintiff's personal terms would be raised at the meeting on that day and that his expectation was that the meeting was to deal with operational matters.}

As I have stated, the defendant denies that it was represented to the plaintiff that he would have twelve months job security. Further, it contends that, in any event, because of the transferability provision in the plaintiff's contract, any such representation would not be supported by consideration and could not give rise to any action at law. In my view that argument is not sustainable. If there were representations which were intended to vary or add to the terms and conditions of the plaintiff's employment, which were acted on by the plaintiff, they give rise to contractual liability.

The real difficulty in this case is the factual conflict which has arisen between the plaintiff and Mr. Cahill. Mr. Cleary testified that he was unaware of any representation or assurance having been given by Mr. Cahill. Any assurance as to tenure with the defendant required the authority of Mr. McGuire and required to be 'signed off' on by Mr. Cleary as Director of Human Resources. However, the employees had not been notified of these requirements. Mr. Downes testified that he did not recollect the plaintiff's contention that he was given a job guarantee by Mr. Cahill coming up until after he was notified that he was to be made redundant. Further, he did not hear anything about the plaintiff's contention that Mr. Cahill had guaranteed him two extra weeks leave, or that he was promised that he could take four weeks leave on his return from Uruguay, until he had a meeting with the plaintiff during that last week in June of 2003

Apart from the documentary evidence in relation to the payment of the performance bonus to the plaintiff, to which I have already alluded, there is no documentary evidence emanating from the defendant which corroborates the plaintiff's evidence. There is one e-mail from the plaintiff to Mr. Downes dated 20^{th March, 2003, in which the plaintiff complained bitterly about having to postpone a trip home and in the course of which he stated that the only two conditions that he had asked for were a trip home once a month and a fixed term of six months. The plaintiff explained the reference to two conditions as meaning conditions relating to his actual stay in Uruguay.}

The long hearing in this matter, which lasted twelve days, was frequently punctuated by complaints by each side in relation to compliance with the other of orders for discovery made in the matter. In relation to complaints made concerning compliance by the defendant, in closing the case counsel for the plaintiff properly recognised that these matters had not been the subject of motions for further and better discovery prior to the hearing. However, he urged that the manner in which the defendant dealt with the discovery went to the credibility of the defendant.

This submission has to be put in context. On 13^{th January, 2004 this court (O'Sullivan J.) made an order for discovery against the plaintiff. An unusual feature of the order was that the court acceded to an application by the defendant, on its undertaking to bear the costs of the expert, that the plaintiff deliver up to an independent expert nominated by the defendant, two lap-top personal computers, which were the property of the defendant but were in the possession of the plaintiff, for the purpose of reconstituting documents contained on the hard drives. This order was complied with. Subsequently, on 9th} February, 2004, on an application by the plaintiff, I made an order for discovery against the defendants which related to, inter alia, all deleted documents relating to matters in issue in the proceedings on the defendant's computers in the possession of Mr. Downes, Mr. Cleary, Mr. Cahill, Paul Byrne, the Finance Director of the defendant, John Doran, who took over as General Manager in Uruguay when the plaintiff's posting was completed, and Mr. McGuire.

The manner in which that discovery order was complied with is of relevance. First, it was not until the eleventh day of the hearing that relevant data which had been archived on to the hard drive of Mr. McGuire's computer was discovered. Secondly, Mr. Byrne in the course of his evidence testified that in the summer of 2003 the hard drive of his lap-top was damaged when it fell out of the baggage compartment in an aircraft, resulting in the loss of data. Mr. Byrne further testified that at the time the policy of the defendant in relation to "backing-up" data did not apply to lap-tops. That relevant data had been lost in this manner was not deposed to in the affidavit of discovery filed on behalf of the defend ant and it only became apparent in the course of the hearing. The defendant's final position on this was that, despite the best efforts of the MIS department of the defendant to reconstitute the hard drive of Mr. Byrne's lap-top, not all documents were restored. While these failures on the part of the defendant have been explained on the basis that they were due to inadvertence, that explanation has to be viewed against the background of the measures to which the defendant resorted to get discovery against the plaintiff. Further, in the context of the factual dispute between the plaintiff and Mr. Cahill, Mr. Cahill deposed to the fact that on leaving his employment with the defendant he wiped his lap-top computer of all files as a security measure. Finally, the discovery made by the defendant revealed an extraordinary paucity of electronic or documentary records in relation to the selection process for the redundancies which were effected in the summer of 2003.

The relevance of all of the foregoing factors, in my view, to the resolution of the factual conflict between the plaintiff and Mr. Cahill is that the absence of any electronic or documentary record corroborative of the plaintiff's account cannot be a significant consideration.

In the final analysis, on the factual conflict, the question is whether the plaintiff's account or Mr. Cahill's account is to be accepted as representing what transpired between them. In general, I found the plaintiff to be a precise and consistent witness and unaffected by loss of memory as suggested by the defendant's counsel. He was very open and frank in court. In making this finding I have borne in mind the complaints made on behalf of the defendant in relation to the manner in which the plaintiff discovered a report of, and communications with, the Amen Clinic to which I will refer later. The case was made on behalf of the defendant that Mr. Cahill, who returned from the USA to testify, was not an interested party in the sense that he swore that he had no ongoing commitment to the defendant. Be that as it may, there was considerable lack of candour on the part of Mr. Cahill and of the defendant's witnesses who were aware of the situation, Mr. Byrne and Mr. Cleary, of the circumstances in which Mr. Cahill first went on holidays in the middle of a serious industrial relations crisis in Uruguay and then left the defendant's employment at the end of March, 2003. The evidence as a whole does not indicate a strict protocol in the defendant companies in relation to the tenure of employees requiring the involvement of the Director of Human Resources and the Chief Executive Officer. The thrust of the evidence was that in the matter of terminating employment, which may involve not inconsiderable financial liability for statutory and extra-statutory redundancy payments, the relevant decisions are made by the Vice President of the relevant division, and while requiring the approval, apparently verbal, of the Director of Human Resources, are made without reference to the Chief Executive Officer.

Having considered the possibility that the plaintiff may have a mistaken perception of what transpired between himself and Mr. Cahill, I have come to the conclusion that the plaintiff was given the guarantee, which became a term of his contract, that his employment with the defendant in the role of Director of Professional Services would continue for one year after his return. The purported termination of his contract was in breach of that guarantee. I will deal with the quantum of damages to which the plaintiff is entitled later.

Claim for damages for personal injuries in outline

The plaintiff's claim for damages for personal injuries is grounded on both an alleged breach of the defendant's common law duty of care and an alleged breach of statutory duty on the part of the defendant. The personal injuries for which the plaintiff claims are psychological injuries. It is alleged that those injuries were caused by reason of work-related stress during the plaintiff's secondment to Uruguay and were aggravated by the treatment meted to him by the defendant on his return in refusing to allow him to avail of four weeks' leave, terminating his employment and the manner in which these proceedings were defended.

Liability at common law: the law

While the Supreme Court in recent years has considered claims for compensation for psychiatric or psychological damage alleged to have been negligently inflicted in various contexts, for example, in the so-called "nervous shock" context (Kelly v. Hennessy [1996] 1 I.L.R.M. 321) and in the so-called "fear of disease" context (Fletcher v. Commissioner for Public Works [2003] 1 I.R. 465), as yet it has not had to consider directly the circumstances in which occupational stress resulting in psychiatric injury will give rise to liability on the part of an employer. That issue has been considered recently by courts in the United Kingdom. In reviewing the authorities from the United Kingdom referred to by counsel in their submissions, it seems to me that the most useful starting point is the decision of the Court of Appeal in Hatton v. Sutherland [2002] 2 All E.R. 1.

The Hatton judgment related to four conjoined appeals in each of which the defendant employer appealed against a finding of liability for an employee's psychiatric illness caused by stress at work. Two of the plaintiffs (Hatton and Barber) were teachers in public sector comprehensive schools. The third (Jones) was an administrative assistant at a local authority training centre and the fourth (Bishop) was a raw material operative in a factory. In all of the cases except that of Jones the decision at first instance was reversed by the Court of Appeal. The judgment of the Court was delivered by Hale L.J. Having analysed the law on liability in negligence under the headings of duty, foreseeability, breach of duty, causation and apportionment and quantification, the Court listed sixteen "practical propositions" in determining liability for stress induced psychiatric injury in an employment context. The propositions are as follows:

(1) There are no special control mechanisms applying to claims for psychiatric (or physical) illness or injury arising from the stress of doing the work the employee is required to do. What this means is that "policy" considerations of the type referred to by Geoghegan J. in his judgment in the Fletcher case (at p. 518) do not arise. Distinctions which are made in determining liability for psychiatric harm in other circumstances, for example, distinguishing between "primary" and "secondary" victims, have no application in the case of psychiatric injury arising from stress in the workplace.

(2) The threshold question is whether this kind of harm to this particular employee was reasonably foreseeable. This has two components: (a) an injury to health (as distinct from occupational stress), which (b) is attributable to stress at work (as distinct from other factors). In the earlier analysis of the issue of foreseeability, it was stated (at p. 13) that the question is not whether psychiatric injury is foreseeable in a person of "ordinary fortitude". The employer's duty is owed to each individual employee.

(3) Foreseeability depends upon what the employer knows, or ought reasonably to know, about the individual employee. Because of the nature of mental disorder, it is harder to foresee than physical injury, but it may be easier to foresee in a known individual than in the population at large. 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.

(4) The test is the same whatever the employment: there are no occupations which should be regarded as intrinsically dangerous to mental health.

(5) Factors likely to be relevant in answering the threshold question included the following:

(a) The nature and extent of the work done by the employee. Is the workload much more than is normal for the particular job? Is the work particularly intellectually or emotionally demanding for this employee? Are demands being made of this employee unreasonable when compared with the demands made of others in the same or comparable job? Or are there signs that others doing the job are suffering from harmful levels of stress? Is there an abnormal level of sickness or absenteeism in the same job or the same department?

(b) Signs from the employee of impending harm to health. Has he a particular problem or vulnerability? Has he already suffered from illness attributable to stress at work? Have there recently been frequent or prolonged absences which are uncharacteristic of him? Is there reason to think that these are attributable to stress at work, for example, because of complaints or warnings from him or others?

(6) The employer is generally entitled to take what he is told by his employee at face value, unless he has good reason to think to the contrary. He does not generally have to make searching enquiries of the employee or seek permission to make further enquiries of his medical advisers.

(7) To trigger a duty to take steps, the indications of impending harm to health arising from stress at work must be plain enough for any reasonable employer to realise that he should do something about it.

(8) The employer is only in breach of duty if he has failed to take the steps which are reasonable in the circumstances, bearing in mind the magnitude of the risk of harm occurring, the gravity of the harm which may occur, the costs and practicability of preventing it, and the justifications for running the risk.

(9) The size and scope of the employer's operation, its resources and the demands it faces are relevant in deciding what is reasonable; these include the interests of other employees and the need to treat them fairly, for example, in any redistribution of duties.

(10) An employer can only reasonably be expected to take steps which are likely to do some good and the court is likely to need expert evidence on this.

(11) An employer who offers a confidential advice service, with referral to appropriate counselling or treatment services, is unlikely to be found in breach of duty.

(12) If the only reasonable and effective step would have been to dismiss or demote the employee, the employer will not be in breach of duty in allowing a willing employee to continue in the job.

(13) In all cases, therefore, it is necessary to identify the steps which the employer both should and could have taken before finding him in breach of his duty of care.

(14) The plaintiff must show that the breach of duty has caused or materially contributed to the harm suffered. It is not enough to show that occupational stress has caused the harm. Earlier, in its analysis of the issue of causation, the Court (at p. 16) illustrated the distinction inherent in this proposition. Where there are several different causes, as will often be the case with stress related illness of any kind, the plaintiff may have difficulty proving the employer's fault was one of them. This will be a particular problem if the main cause was a vulnerable personality which the employer knew nothing about.

(15) Where the harm suffered has more than one cause, the employer should only pay for that proportion of the harm suffered which is attributable to his wrongdoing, unless the harm is truly indivisible. It is for the defendant to raise the question of apportionment.

(16) The assessment of damages will take account of any pre-existing disorder or vulnerability and of the chance that the claimant would have succumbed to a stress-related disorder in any event. Earlier, in dealing with the issue of quantification, the Court (at p. 18) stated that where the tortfeasor's breach of duty has exacerbated a pre-existing disorder or accelerated the effect of pre-existing vulnerability, the award of general damages for pain, suffering and loss of amenity will reflect only the exacerbation or acceleration. Further, the quantification of damages for financial losses may take some account of contingency for example, the chance that the plaintiff would have succumbed to a stress-related disorder in any event and this may be reflected in the multiplier to be applied in quantifying future loss of earnings.

The Court of Appeal then went on to apply the foregoing principles to the facts of the four cases under appeal. In only one appeal, Jones, was the decision at first instance upheld. Mrs. Jones had been employed as an administrative assistant in a local authority training centre from August, 1992 until January, 1995 when she went off sick with anxiety and depression. She never returned and was made redundant when the centre closed at the end of 1996. While there was no specific medical event which might have alerted her employers to the risk of the breakdown which occurred in January, 1995, her employers did know that excessive demands were being placed upon her. They also knew that she was complaining of unreasonable behaviour by her immediate manager, in that she had been threatened with non-renewal of her temporary post if she persisted in her complaints of overwork. These factors were taken sufficiently seriously for extra help to be arranged, not once but twice, but it was not actually provided. She had made two written formal complaints, one in July and one in November, 1994, that problems at work were causing harm to her health. It was not disputed that they did in fact cause her breakdown in January, 1995. On the basis of the foregoing facts, the Court stated (at p. 24) that the question was not whether her employers had in fact caused harm to her health before January, 1995, but whether it was sufficiently foreseeable that they would do so for it to be a breach of duty for the employers to carry on placing unreasonable demands upon her and not to follow through their own decision that something should be done about it. The Court concluded, not without some hesitation, that the evidence at first instance was sufficient to entitle the judge to reach the conclusion that it was. It was pointed out that, unlike the other appeals before the Court, Jones was one where the employer knew that the employee was being badly treated by another employee and could have done something to prevent it.

One of the appellants before the Court of Appeal, Barber, appealed to the House of Lords against the decision of the Court of Appeal. The speeches of the Law Lords were delivered on 1^st April, 2004 and are reported as Barber v. Somerset County Council [2004] 2 All E.R. 385. The decision of the Court of Appeal was reversed. However, there was broad acceptance of the propositions put forward by the Court of Appeal. In his speech, Lord Walker of Gestingthorpe described the exposition and commentary in, inter alia, the part of the judgment dealing with the law as a valuable contribution to the development of the law. He referred to the recognition by the Court of Appeal that the causes of mental illness will often be complex and depend upon the interaction between the patient's personality and a number of factors in a patient's life and that it is not easy to predict who will fall victim, how, why or when. He stated that this uncertainty has two important consequences. First, overworked people have different capacities for absorbing stress, and different breaking points. Secondly, senior employees – especially professionals – will usually have quite strong inhibitions against complaining about overwork and stress, even if it is becoming a threat to their health. Commenting on the portion of the judgment of the Court of Appeal (para. [29] at p. 15) from which the proposition set out at (6) above was abstracted, Lord Walker emphasised that the analysis was useful practical guidance and must be read as that and not as having anything like statutory force. He emphasised that every case will depend on its own facts and stated that the following statement of Swanwick J. in Stokes v. Guest, Kean and Nettlefold (Bolts & Nuts) Ltd. [1968] 1 W.L.R. 1776 at 1783 remains the best statement of general principle:

". . . the overall test is still the conduct of the reasonable and prudent employer, taking positive thought for the safety of his workers in the light of what he knows or ought to know; where there is a recognised and general practice which has been followed for a substantial period in similar circumstances without mishap, he is entitled to follow it, unless in the light of common sense or newer knowledge it is clearly bad; but where there is developing knowledge, he must keep reasonably abreast of it and not be too slow to apply it; and where he has in fact greater than average knowledge of the risks, he may be thereby obliged to take some more than the average or standard precautions. He must weigh up the risk in terms of the likelihood of injury occurring and the potential consequence if it does; he must balance against this the probable effectiveness of the precautions that can be taken to meet it and the expense and inconvenience they involve. If he is found to have fallen below the standard to be properly expected of a reasonable and prudent employer in these respects, he is negligent."

In dissenting from the majority view, Lord Scott of Foscote expressed a preference for the statement of the law contained in paragraph 29 of the judgment of the Court of Appeal over the statement of general principle quoted above, pointing out that Swanwick J. did not have in mind the problems of psychiatric illness caused by stress. He contrasted an appreciation of the existence of physical dangers of the sort which arose in the Stokes case (the risk of the plaintiff contracting cancer of the scrotum from exposure at work over a long period to mineral oils which, on a daily basis, had saturated his clothing and come in contact with his skin), which is dependent on scientific and medical knowledge, with psychiatric illness caused by stress as in the case of the Barber appeal, where the employers could only know what Mr. Barber told them.

The outcome of the appeal to the House of Lords in the Barber case turned on the application of the relevant principles of law to the facts of the case. The facts were that since 1984 Mr. Barber had been the head of the mathematics department at a second-level school. In 1995 that post was abolished in a restructuring of staffing because of falling numbers. He reapplied for a new post in his subject. In order to maintain his salary level he also applied to be the school's project manager for public and media relations and was appointed. He worked long hours in discharging his new responsibilities and began to suffer from stress. In February, 1996 he spoke of "work overload" to one of the senior management team. He was away from work in May, 1996 for three weeks, returning with sick notes signed by his doctor, recording his condition as "overstress/depression". He completed his employer's form of sickness declaration stating his trouble as "overstressed/depression" and that form was countersigned by one of the deputy heads of the school. During June and July, Mr. Barber had meetings with the senior management team about his workload and his health but no steps were taken to investigate or remedy the situation. In November he suffered a mental breakdown at school and he took early retirement at the end of March, 1997, when he was 52 years old.

In applying the relevant principles of law to the facts, Lord Walker stated that the issue of the breach of the employer's duty of care to Mr. Barber was close to borderline; it was not a case of a flagrant breach of duty any more than it was an obviously hopeless claim. In Lord Walker's view, the employer's duty to take some action arose in June and July, 1996 and continued so long as nothing was done to help Mr. Barber. He stated that what the Court of Appeal failed to give adequate weight to was the fact that Mr. Barber, an experienced and conscientious teacher, had been off work for three weeks with no physical ailment or injury, his absence being certified by his doctor as being due to stress and depression. The senior management team should have made enquiries about his problems and seen what they could do to ease them, in consultation with the officials at the council's education department, instead of brushing him off unsympathetically or sympathising but simply telling him to prioritise his work. Lord Walker did not accept an argument that, given the problems the school was facing, there was nothing that the school could have done other than to advise Mr. Barber to resign or, in the last resort, to terminate his employment. He stated that at the very least the senior management team should have taken the initiative in making sympathetic enquiries about Mr. Barber when he returned to work, and making some reduction in his workload to ease his return.

After commenting that it is generally unprofitable to contrast the facts of one case with another, a view with which I respectfully agree, Lord Walker contrasted the facts before him with the facts in a Scottish case, which is relied on in the plaintiff's submissions, Cross v. Highlands and Islands Enterprise [2001] I.R.L.R. 336. Lord Walker summarised the facts: a promising 39 year old executive, employed in a job in which (because of geographical factors) close day to day supervision of his work was impossible, became ill with depressive illness and killed himself. The employer was held not liable because no causative breach of duty was established. After the employee had been off work with depression, his line manager travelled to see him and spent almost the whole day discussing his work and his future with him. He reduced his responsibilities and continued to maintain contact with him by telephone. Unfortunately the depression continued. The employer was not liable for the tragedy which ensued because the evidence did not establish that objectively the job was the problem. For all the employer knew, it was dealing with an employee who, for reasons that were not clear, had become unable to cope with a job that he had previously managed successfully. By contrast, in Mr. Barber's case, there was no doubt that the job was the problem.

Prior to the decision of the Court of Appeal in Hatton, the English High Court had applied the ordinary principles of employer's liability to a claim for psychiatric illness arising from stress in employment in what was described by Hale L.J. as "the landmark case" of Walker v. Northumberland County Council [1995] 1 All E.R. 737. The plaintiff, Mr. Walker, had been employed by the defendant local authority as an area social services officer from 1970 until 1987. He was responsible for managing four teams of social services field workers in an area which had a high proportion of childcare problems, among which child abuse references were particularly prevalent. In 1986 he suffered a nervous breakdown because of the stress and pressures of work and was off work for three months. Before he returned to work he discussed his position with his superior who agreed that some assistance should be provided to lessen his work burden. In the event, when he returned to work only very limited assistance was provided and he found that he had to clear the backlog of paperwork that had built up during his absence while the pending childcare cases in his area were increasing at a considerable rate. Six months later he suffered a second mental breakdown and was forced to stop work permanently. In February, 1988 he was dismissed by the local authority on the grounds of permanent ill health. His action against the local authority claiming damages for breach of its duty of care, as his employer, to take reasonable steps to avoid exposing him to a health-endangering workload was successful. Having found that work-related stress and pressure were the only external circumstances which brought about Mr. Walker's first breakdown, Colman J. considered whether that breakdown was caused by a breach of the defendant's duty of care.

Colman J. was satisfied that by 1985 at the latest it was reasonably foreseeable to Mr. Walker's line manager on the basis of the information he had that by reason of stress of work there was in general some risk that Mr. Walker might sustain a mental breakdown of some sort in consequence of his work. He then went on to assess how great the reasonably foreseeable risk was: was it so slight as to be negligible or was it a materially substantial risk? Having stated that there was no evidence that officers in the middle management cadre, as distinct from fieldworkers, were particularly vulnerable to stress-induced mental illness, Colman J. posited the test on foreseeability as follows:

"Accordingly, the question is whether it ought to have been foreseen that Mr. Walker was exposed to a risk of mental illness materially higher than that which would ordinarily affect a social services middle manager in his position with a really heavy workload. For if the foreseeable risk were not materially greater than that there would not, as a matter of reasonable conduct, be any basis upon which the council's duty to act arose."

The first sentence in that quotation was implicitly approved of by the Court of appeal in the Hatton case (at p. 14), Hale L.J. pointing out that it turned the focus to the individual.

On the evidence in the Walker case Colman J. was not persuaded that Mr. Walker's line manager ought to have appreciated that Mr. Walker was at materially greater risk of stress-induced mental illness than an area manager with a busy area would normally be. He laid particular emphasis on evidence of a colleague of Mr. Walker, a very experienced team leader, who thought he would have been able to do Mr. Walker's job of area manager, which would not suggest that the work appeared to him to be unmanageable or likely to endanger his health. On that basis, Colman J. held that it was not reasonably foreseeable to the council that, before his first breakdown, the workload to which Mr. Walker was exposed gave rise to a material risk of mental illness.

However, on the issue as to whether Mr. Walker's second illness was caused by a breach of the council's duty of care, Colman J. found that, having regard to the reasonably foreseeable size of the risk of repetition of Mr. Walker's illness if his duties were not alleviated by effective additional assistance and to the reasonably foreseeable gravity of the mental breakdown which might result if nothing was done, the standard of care to be expected of a reasonable local authority required that in March, 1987 such additional assistance should be provided, if not on a permanent basis, at least until restructuring of the social services had been effected and the workload on Mr. Walker thereby permanently reduced. When Mr. Walker returned from his first illness the council had to decide whether it was prepared to go on employing him in spite of the fact that he had made it sufficiently clear that he must have effective additional help if he was to continue. It chose to continue to employ him, but provided no effective help. In doing so, Colman J. found that the council acted unreasonably and therefore in breach of its duty of care.

In his analysis of the law in England and, in particular, the test of reasonable foreseeability in the context of the risk of work-engendered psychiatric injury, Colman J. referred to an Australian case as a helpful illustration of the correct approach: the judgment of the Supreme Court of the Australian Capital Territory delivered by Miles C.J. in Gillespie v. Commonwealth of Australia [1991] 104 A.C.T.R. 1. That case involved a claim by a former Australian diplomat against the Australian Foreign Affairs and Trade Department in respect of a mental breakdown which he suffered in consequence of stress created by living conditions in Caracas, Venezuela, where he had been posted. The plaintiff contended that such stress, and therefore his injury, would have been avoided or reduced if the defendants had, before sending him to Caracas, prepared him by a course of training for the severely stressful conditions likely to be encountered. Colman J. quoted the following observations of Miles C.J. (at p. 15):

"In the present case it is not necessary to consider foreseeability with respect to the existence of a duty of care, because the relationship of employer and employee itself gives rise to that duty of care. Foreseeability for present purposes is to be considered only insofar as the degree of remoteness of the harm sustained by the plaintiff set the parameters of the steps that a reasonable person in the position of the defendant would have taken to reduce the risk to the extent that any 'unnecessary' risk was eliminated. In practical terms this means that the plaintiff must show that the defendant unreasonably failed to take such steps as would reduce the risk to what was a reasonable, that is a socially acceptable, level."

Miles C.J. held that the magnitude of the harm was considerable but there was not a high degree of probability that harm of that kind would eventuate. He addressed himself first to the question whether the factors involved in moving to such an environment as Caracas would have involved a reasonably-foreseeable risk of breakdown to any ordinary person, and secondly to the question whether it was foreseeable that the plaintiff was more susceptible to psychological harm than an ordinary member of the diplomatic staff in Caracas. Having held that some risk of psychiatric harm was reasonably foreseeable, but that the plaintiff's particular vulnerability was not foreseeable, he concluded that, even if the defendant had taken steps to warn the plaintiff, it was not established that he would not have gone to Caracas or, had he done so, avoided his mental breakdown. Consequently the plaintiff's claim failed.

The plaintiff, Mr. Gillespie, appealed to the Federal Court of Australia (see McMahon & Binchy on Law of Torts, Third Edition, p.496, footnote 95). The appeal, which is reported in (1993) Aust. Tort Reports 81-217, was dismissed. The appeal was essentially decided on the facts.

I have considered the decision of Colman J. in the Walker case in some depth, because it has been the subject of judicial comment in this jurisdiction. In Fletcher v. Commissioners of Public Works, the Supreme Court held that the law in this jurisdiction should not be extended by the courts so as to allow the recovery by plaintiffs of damages for psychiatric injury resulting from an irrational fear of contracting a disease because of their negligent exposure to health risks by their employers where the risk was characterised by their medical advisers as remote. At the end of his judgment, Keane C.J. added two observations, the first of which was as follows:

". . . we are not in this case concerned with the question as to whether an employer should be held liable where it is reasonably foreseeable that an employee might suffer a nervous breakdown because of the stress and pressures of his workload, an issue resolved in favour of the plaintiff by the English High Court in Walker v. Northumberland County Council. . ."

Four years earlier, in his comprehensive analysis of the "nervous shock" cases in Curran v. Cadbury (Ireland)Ltd. [2000] 2 I.L.R.M. 343, Judge McMahon observed, at p. 349:

"The duty of the employer towards his employee is not confined to protecting the employee from physical injury only; it also extends to protecting the employee from non-physical injury such as psychiatric illness or the mental illness that might result from negligence or from harassment or bullying in the workplace. In Walker v. Northumberland County Council . . . the English courts imposed liability where the plaintiff foreseeably suffered a nervous breakdown because of unreasonably stressful working conditions imposed on him by his employer. There is no reason to suspect that our courts would not allow this line of authority if it came before the courts in this jurisdiction."

The only decision of this court which has been cited by counsel in which damages have been awarded for a psychiatric disorder, independent of any physical injury, caused by stress in an employment context is the decision of Budd J. in McHugh v. The Minister for Defence [2001] 1 I.R. 424. The facts in that case are succinctly summarised in the head note. The plaintiff, a member of the Defence Forces, while on his third tour of duty in the Lebanon was exposed to a life-threatening incident, which sensitised him to further events. Subsequently, he was involved in further incidents which caused him to suffer acute distress. Thereafter he manifested symptoms of post-traumatic stress disorder, which were obvious and were the subject of comment among his fellow soldiers and NCOs and were brought to the attention of his Platoon Commander. There was an awareness in the Defence Forces of the problem of post-traumatic stress disorder and notes on post-traumatic stress disorder had been distributed to officers going to the Lebanon from about 1990. The plaintiff's claim was that the defendants were negligent in not providing remedial treatment for him following his exposure to stressful incidents. In his judgment, Budd J. outlined the relevant legal principles applic