If an employee is unfairly treated in the course of an internal investigation, grievance or disciplinary procedure and suffers depression as a result, will the employer be liable?  Only if the depression were a foreseeable result of the unfair treatment, said the Court of Appeal last month in Yapp -v- Foreign & Commonwealth Office.  That is not in any way a new point but in answering that question, Yapp has laid down a number of clear (and for employers, very helpful) principles concerning the foreseeability of psychiatric injury arising from the employer’s mishandling of internal procedures of this sort. 

Mr Yapp was in a senior diplomatic position at the British Embassy in Belize.  He was accused of bullying local Embassy staff and, more significantly, of touching inappropriately (is there an appropriate way?) the backside of a local politician’s wife.  Images of Kenneth Williams and Hattie Jacques in their pomp swim unbidden before you. 

Without any material investigation or indeed prior discussion with him, Mr Yapp was withdrawn immediately from the Belize post on a permanent basis and shipped back to the UK, ringing in his ears the FCO’s promise that if he turned out not to have done it, they would try to find him a similar post elsewhere.  As it turned out, on fuller investigation, the evidence of inappropriate touching was very weak.   The politician’s wife had not complained and reason arose to doubt the word of her husband.  Yapp was therefore acquitted of that charge. 

The allegation of bullying the Embassy’s local staff was found to have more legs to it but (perhaps we have learned little since the fall of the Empire), that was not by itself felt sufficient to prevent him continuing in or returning to a senior diplomatic role.  However, by that point, Mr Yapp had become clinically depressed as a result of his enforced withdrawal from Belize and in fact never returned to high office within the FCO. 

Bearing in mind that his recall from Belize would not have been necessary had the FCO not acted so precipitately, and that the unfair withdrawal had both made him ill and ultimately destroyed his career, the next question was whether the latter was a foreseeable result of the former?   Distress and anger, certainly, but psychiatric illness? 

Back in 2002, the Court of Appeal said in a case called Hatton that “an employer is unusually entitled to assume that the employee can withstand the normal pressures of the job unless [it] knows of some particular problem or vulnerability“.  But is a seriously botched investigation or disciplinary process a “normal pressure of the job”, or something over and above that?  The Court of Appeal provided the answer: “It is a normal characteristic of the employment relationship that employees may be criticised by the employer and sometimes face disciplinary action or other such procedures.  And in an imperfect world it is not uncommon for such criticism or disciplinary process to be flawed to some extent: there will be a spectrum from minor procedural flaws to gross unfairness.  The message of Croft is that it is not usually foreseeable that even disciplinary action which is quite seriously unfair will lead the employee to develop a psychiatric illness unless there are signs of pre-existing vulnerability“. 

So next time you receive a letter threatening a personal injuries claim arising from some allegedly questionable aspect of your conduct of a grievance, disciplinary or investigatory matter, the lessons of Yapp are:

(i)         did your employee show signs of any pre-existing vulnerability – recent time off with psychiatric illness, very poor past reaction to pressured situations at work, etc.?

(ii)        absent that, even a fairly comprehensively mucked-up internal procedure will not make any psychiatric illness foreseeable and so you will not be legally liable for it; and

(iii)       be careful who you talk to at Belize cocktail parties.