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Facing Employee Psychiatric Injury Claims - How Is Compensation Assessed?

on Friday, 11 August 2017.

Employee claims for psychiatric injury can expose you to potentially high levels of compensation. A recent case has confirmed the approach that should be taken by tribunals and courts when assessing compensation...

... and emphasised the need for medical evidence.

Key Principles When Facing a Claim

The Court of Appeal (CA) set out the following principles to be followed in cases where psychiatric injury is claimed to have been caused by an employer's wrongdoing:

  • Where an injury has multiple causes, a tribunal should make a 'sensible attempt' to apportion liability accordingly and the employer should only pay for the proportion of the harm suffered which is attributable to their wrongdoing.
  • This will only be appropriate if the injury is 'divisible'. An example of this may be  where a pre-existing illness is found to have been materially aggravated by the employer's wrong. Where, however, there is no rational basis for apportioning liability, the injury would be 'truly indivisible' and the employee should be compensated for the whole of the injury.
  • Medical evidence will be required to assist in assessing whether it is possible to identify a particular part of the suffering which was caused by the employer's wrongdoing.
  • The assessment of damages may take account of any pre-existing disorder or vulnerability and of the possibility that the claimant would have succumbed to a stress related disorder in any event.
  • Each case will depend on its own facts and evidence.

BAE Systems (Operations) Ltd v Konczak

Ms Konczak was employed by BAE Systems (Operations) Limited (BAE). During her employment, she alleged that she was being subjected to bullying and harassment, and she was subsequently moved to a new team at a different location.

When Ms Konczak's line manager, Mr Dent, suggested at a meeting that she should move back to her previous team in a different role, Ms Konczak broke down in tears. Following this meeting Mr Dent suggested to Ms Konczak that women took things in a more emotional way than men. Ms Konczak was subsequently signed off with work-related stress and was eventually dismissed.

She brought various claims in the Employment Tribunal (ET). The ET upheld her sex discrimination claim in respect of Mr Dent's comment, and found there had been a failure to make reasonable adjustments, and her dismissal had been unfair, discriminatory and had amounted to victimisation.

She was subsequently awarded £318,629.66 compensation for pecuniary loss. BAE appealed against this decision on the ground that the ET had failed to consider the extent to which events prior to the meeting had caused or contributed to Ms Konczak's mental state.

The Employment Appeal Tribunal (EAT) remitted the case to the ET, which held that the psychiatric injury was indivisible. After having their subsequent appeal dismissed by the EAT, BAE appealed to the CA.

The Court of Appeal

The CA dismissed BAE's appeal. It agreed with the ET's view (confirmed by a medical expert) that Ms Konczak had not been suffering with a mental illness up until the meeting with her line manager. However, the sexist remarks had been the 'final straw' that caused her to become mentally ill. On this basis, the ET had been right to reject BAE's argument that the compensation should be apportioned due to a pre-existing illness.


For more information, please contact Eleanor Boyd, in our Employment Law team, on 020 7665 0940.

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