Following a recent decision in the House of Lords, employers may now be required to pay compensation to their employees for distress, anxiety and consequential loss resulting from bullying in the workplace by other employees.

The case involved a Mr Majrowski who was unhappy with the way he was treated by his departmental manager, a Mrs Freeman. She bullied and intimidated him, was rude and abusive, and imposed unrealistic performance targets threatening disciplinary action if these were not met. Mr Majrowski made a formal complaint and an investigation was carried out finding harassment had occurred. Mr Majrowski took no action immediately but was subsequently dismissed for unconnected reasons. In February 2003, nearly 4 years after the harassment occurred, Mr Majrowski commenced proceedings against his former employer (an NHS Trust) claiming damages under the Protection from Harassment Act 1997. No claim was made against Mrs Freeman herself.

The purpose of the1997 Act is to protect victims of harassment in whatever form it may take, wherever it occurs and whatever its motivation. It can be used against stalkers, racial abusers and disruptive neighbours. This decision extends the scope of a person’s protection to bullying in the workplace.

This seems entirely acceptable if the claim is made against the fellow employee who carried out the harassment. However, under the Act, an employer is “vicariously liable” for the actions of his employees. This means a blameless employer will be responsible for a wrong committed by his employee while the latter is about his employer’s business, regardless of the steps taken by the employer to ensure such activity does not take place.

The apparent rationale is that all forms of economic activity carry a risk of harm to others. Fairness requires that those responsible for such activities (eg an employer) should be liable to persons (eg the employee) suffering injury or loss from wrongs committed in the course of the enterprise. It is ‘fair’ because it means the injured person can look for recompense to a source better placed financially than the individual wrongdoing employee. It was felt that this approach would encourage employers to maintain standards of ‘good practice’ by their employees.

This case opens the door to more claims being brought against employers. Claims can be brought up to 6 years after the relevant incident, unlike personal injury claims where a 3 year limit applies, and after the employee has left. Additionally, a recognised and diagnosed condition is unnecessary - anxiety and distress are sufficient.

Unfortunately the House of Lords did not deal with the amount of compensation which can be awarded in such cases. Guidelines can perhaps be taken from awards for hurt feelings in discrimination cases. These range from £500 up to £25,000 in the most serious cases which would involve for instance, a concerted campaign over a period of time.

Something employers should be concerned with is whether they are covered for such claims on their insurance. The mandatory insurance cover required by employers only applies to bodily injury or disease. Claims for anxiety may not automatically be covered.

If you would wish to consider what can be done to limit your exposure or mitigate the potential consequences, please contact our Personal Injury (Paul McGrath) or Employment (Liz Whitehead) specialists at Jackaman Smith & Mulley, Northgate Street, Ipswich (01473 255591)