Supreme Court allows appeal dismissing wrongful dismissal and negligence claims against Dunnes Stores Limited.

THE SUPREME COURT

APPEAL NO. 464/2006

Denham J.

Hardiman J.

Finnegan J.

BETWEEN

ADAM BERBER

PLAINTIFF/RESPONDENT

and

DUNNES STORES LIMITED

DEFENDANT/APPELLANT

Judgment of Mr Justice Finnegan delivered on the 12th day of February 2009

The respondent was an employee of the appellant. The respondent in his pleadings advances a number of causes of action.

For the purposes of this appeal the issues which arise are as follows:-

1. Was the respondent wrongfully dismissed by reason of a breach by the appellant of the implied term of the contract of

employment that it would not conduct itself in a manner likely

to destroy or seriously damage the relationship of confidence and trust between employer and employee, such breach

amounting to repudiation of the contract of employment which

the respondent was entitled to accept.

2. Was the respondent in breach of the contract of employment and/or negligent and in breach of duty as a result of which

the respondent sustained personal injury and special damage

being five months loss of earnings referable to a period over and above the three month notice period during which the

respondent was unemployed in consequence of personal

injury.

The factual background

The respondent commenced employment with the appellant as a trainee manger in April 1980 at the age of nineteen. On

completion of his training he was employed as a store manager at various locations until 1988. From 1988 until November

2000 he transferred from store management to the position of buyer being successively group footwear merchandiser, men’s

footwear buyer and men’s readymade buyer. On his last management performance review in February 2000 his

performance was generally rated at the level of “effective contribution”. The assessment provided for four performance

standards in descending order – excellent, highly effective, effective contribution and below standard. The review contained

a comment “colour issue”. Some years prior to that review the appellant had a colour blindness test carried out on all buyers

and the respondent was reported as colour blind. Notwithstanding this he had been moved to a position as men’s readymade

buyer. From February 2000 onwards the plaintiff’s evidence was that there was a change of attitude towards him evidenced

by the following:-

(a) Unlike previous years as a buyer when he spent as many as fifty days abroad during 2000 he was sent abroad only once.

(b) There was an increased interest in the state of his health notwithstanding an excellent work attendance record. He had

been diagnosed with Crohn’s disease in 1978. He had a

recurrence of his disease in 1995 and again in spring 2000. In the years 1995, 1996 and 1999 he missed one day through

illness. He had no absences in 1998. He was absent for

five days in 1997 and seven days in 2000 up to 23rd November 2000 (the relevance of which date will appear hereafter).

In July 2000 he was told that he was not being sent on a trip to the Far East because Mrs Heffernan was concerned that he

might get ill on account of his Crohn’s disease and he considered this “bizarre”. In October 2000 the respondent was

informed that he was to be transferred from buying back to store management and his colour blindness was adverted to at

this time. He was informed on the 22nd November 2000 that he was to be moved to the appellant’s store in the ILAC

Centre Dublin as either department manager of menswear or ladieswear. The respondent considered this demotion and

sought a meeting with Mrs Heffernan and a meeting took place on the 23rd November 2000. At the meeting it was agreed

that the respondent would return to store management initially at the appellant’s store in Blanchardstown Shopping Centre,

which was regarded as it’s flagship store, where he would undergo training with a view to being fast-tracked for appointment

as store manager or regional manager within six to twelve months. The respondent’s understanding was that he would

commence work in the ladieswear department in Blanchardstown on the 4th December 2000. On the 27th November 2000

the respondent was directed to report for duty that day to Blanchardstown and to take up a position in the homewares

department. He considered this a variation of his agreement with Mrs Heffernan and he tried to contact her without success

as she was abroad. He did not go to Blanchardstown on the 27th November 2000 but was contacted the next day by the

director of store operations Mr McNiffe. On the 28th and 29th November the respondent had three meetings with Mr

McNiffe. At the meeting on the 28th November 2000 the respondent refused to go to Blancharsdstown until such time as he

had spoken with Mrs Heffernan. There were two meetings on the 29th November 2000. At the first meeting the respondent

read out a statement which he had prepared but refused to furnish a copy of the same to Mr McNiffe and maintained his

refusal to go to Blanchardstown. At the second meeting the respondent maintained this position and Mr McNiffe suspended

him from work with pay. Thereafter the respondent’s communications to the appellant were largely through his solicitors.

The first solicitors’ letter dated 7th December 2000 made it clear that the respondent would go to Blanchardstown on the

terms which he had agreed with Mrs Heffernan. The matters raised on his behalf were that the transfer was taking place

seven days earlier than agreed, a plan to fast track him was not yet prepared and that the position was in homewares. In the

letter the respondent’s solicitors said in relation to the respondent’s suspension:-

“The effect of this quite extraordinary conduct on the part of the company towards our client and the stress generated by

it, has resulted in our client becoming ill and he attended his doctor on 1 December and again today, 7 December, who

has ordered him to rest and certificates to this effect have been delivered to the company.”

The letter threatened proceedings if the suspension was not lifted. In a short report of 31st January 2001 the respondent’s

treating surgeon had this to say:-

“Over the last while he has had an exacerbation of symptoms (of Crohn’s disease) and I have no doubt the recent

wrangle has exacerbated his symptoms and has resulted in him having to increase his medication.”

In a reply of 12th December 2000 the appellant’s solicitors gave as the reason for the respondent’s suspension his attitude at

the meetings with Mr McNiffe, his persistence in seeking to speak to Mrs Heffernan and his refusal to explain his issues to

Mr McNiffe which they categorised as unreasonable. The letter indicated that the appellant was prepared to overlook the

incident provided that the respondent reported to work in Blancharstown as soon as certified fit to do so by his doctor.

Having considered this evidence the learned trial judge categorised the attitude of each of the parties. The respondent

considered that Mrs Heffernan was intent on ousting him from his employment. He attributed this to jealousy of the

respondent’s brother who had achieved remarkable commercial success. Mrs Heffernan had alluded to this at the meeting

on the 23rd November 2000. The learned trial judge found that the appellant was motivated by sound management

considerations in deciding to transfer the respondent from buying to store management. However the respondent’s solicitors

letter of the 7th December 2000 should have sounded alarm bells with the respondent’s senior management as to the

respondent’s state of health. On the other hand the appellant inferred from the respondent’s conduct that he had an ulterior

motive in that he was attempting to orchestrate a situation in which he could get a severance payment or compensation: the

learned trial judge held that this was an incorrect inference. She concluded that while some of the respondent’s behaviour

might be characterised as unreasonable, it was attributable to his trust in the appellant’s senior management executives

having been shattered. The learned trial judge noted that responses from Mr McNiffe to the respondent’s solicitors letters

were sent directly to the respondent at his home address sometimes by courier and sometimes on Saturday, and, while the

appellant was entitled to communicate directly with the respondent this course heightened the respondent’s distrust of the

appellant and increased the stress he was under.

The respondent reported for work in Blanchardstown on 28th December 2000 having been cleared to do so by his doctor.

There was an incident that day. He was dressed casually in the manner in which he dressed while working as a buyer in

Head Office. He was informed by Mr Sills, the store manager, that the dress code for managers was a conservative coloured

suit and formal footwear. The respondent asked Mr Sills to put that in writing and Mr Sills did so on the 29th December

2000. The respondent explained that he was on the defensive at this time because of the cumulative effect of the problems

which he was having. He ceased work again four days later on account of ill health. He contended that his treatment at

Blanchardstown in this period exacerbated his ill health. He particularised two matters:-

(a) A document entitled “Drapery Management Analysis” widely circulated included his name under the heading of “new

trainees” which he considered humiliating, defamatory and

vindictive. The document is in fact no more than a manuscript duty roster for the particular store for a particular week.

(b) A personalised twelve week homewares training plan which was furnished to him on his arrival was appropriate to a

newly joined trainee and failed to take account of his twenty one

years experience.

These complaints were contained in a letter of 11th January 2000 from the respondent’s solicitors in which it was alleged

that these matters were a continuation of a course of treatment which began the preceding February designed to sideline him

out of management and out of his employment. The letter demanded the withdrawal of the Drapery Management Analysis

and the preparation of an appropriately devised training plan. There was a measured and conciliatory response from Mr

McNiffe by reply dated 12th January 2000. Mr McNiffe explained the mis-description in the roster as an oversight and

sought flexibility on the respondent’s part in giving the training programme a chance to work. He explained that in the twelve

years since the respondent had been in store management much had changed and that it was important that the respondent

re-learn the business from the ground up. The respondent was requested to return to work the following Monday. By letter

dated 21st February 2001 the respondent’s solicitors advised the appellant that the respondent’s treating surgeon had

indicated that the respondent might return to work but that before doing so the respondent required confirmation in relation

to the training programme and his future career path and that a communication be circulated to all management and staff

within head office and all stores to correct the mis-description in the Drapery Management Analysis. There was further

correspondence but ultimately a meeting was arranged for the 7th March 2001 between the respondent and his solicitor and

Mr McNiffe and the appellant’s solicitor and at which a stenographer retained by the respondent attended. Following the

meeting Mr McNiffe wrote to the respondent setting out the matters which had been, he considered, agreed and this gave

rise to further disagreement and further correspondence. The first matter in issue was the length of time before the

respondent would proceed to a position as store manager or regional manager: Mr McNiffe suggested that this could take

eighteen months with an initial position as No. 2 before progressing to a position of No. 1. in store management. The

respondent was insisting on a time scale of three to six months rather than the six to twelve months mentioned by Mrs

Heffernan at the meeting of 23rd November 2000 notwithstanding that he had only attended for work in Blanchardstown

for four days since that meeting. The second related to the training programme and the extent to which the respondent

should be involved in its preparation. The first matter was not resolved prior to the respondent leaving his employment. On

the second matter while a training programme was produced on the 8th March 2001 the respondent’s solicitors raised in

correspondence a number of points in relation to the same with which Mr McNiffe was not prepared to agree. A third

matter was in relation to the Drapery Management Analysis and concerned the text of an announcement made. The

announcement as circulated was not in the terms agreed. The learned trial judge held that the substance of the

announcement was as agreed and she did not consider the variations to be of significance. The circulation was narrower, the

learned trial judge held, than the respondent was entitled to expect.

There were further live issues at this time. One related to a Christmas bonus of €1,500 which the respondent claimed to be

entitled to in respect of Christmas 2000. Another related to a schedule of monthly meetings which it was agreed on the 7th

March 2001 should take place between the respondent and senior management. A meeting scheduled for the 8th May 2001

had not taken place and by letter dated 9th May 2001 the respondent’s solicitors complained of this. The learned trial judge

held that in view of the respondent’s absence through illness the appellant was justified in considering the complaint

unreasonable.

The respondent returned to work towards the end of April 2001. His solicitors continued to raise issues on his behalf in

correspondence. He continued to work until the 15th May 2001. On the 15th May 2001 the respondent was rostered for

duty from 10 a.m. to 8.30 p.m. but incorrectly believed that he had been rostered for duty from 8.30 a.m. to 6 p.m. He

attended at 8.30 a.m. During the morning Mr Sills the store manager made it clear to the respondent that he was required to

attend until 8.30 p.m. There were heated exchanges. Mr Sills made it clear that he was the respondent’s superior and the

respondent’s reply was that Mr Sills could deal with his solicitor. He did not work until 8.30 p.m. The learned trial judge

found that in relation to this incident the respondent was in the wrong and that Mr Sills conduct was understandable.

By letter dated the 30th May 2001 the respondent’s solicitors wrote to the appellant’s solicitors as follows:-

“We refer to our letters of 1 May and 9 May, neither of which have received a response. Our client has kept us

closely advised of the developments at his place of employment which have had a severely adverse effect on his

health. We have advised our client that the company has repudiated its obligations towards him as an

employee. Our client has written the enclosed letter to Mrs Margaret Heffernan.

We have been instructed to seek damages against the company in relation to the company’s repudiation of the

contract of employment and to the reckless imposition by the company of physical and emotional suffering on

our client including an abusive verbal attack on our client by a senior manager in the presence of other

members of management and staff. Unless we receive from the company within seven days of the date of this

letter, adequate proposals to compensate our client, proceedings will issue without any further notice. In that

event we shall be obliged for your confirmation that you have authority to accept service of such proceedings

on behalf of your client.”

The letter from the respondent enclosed therewith complained that the appellant had failed to honour his understanding of

the meeting of 7th March 2001. He complained of the altercation with Mr Sills on the 15th May 2001. Finally he

complained that his working environment was hostile to his health and in consequence he had been advised by his consultant

Professor Ó Morain to cease working in that environment.

Thereafter the respondent was out of work for a period of approximately eight months. At the end of January 2002 he

obtained a position as a buyer with another retail group on terms no less favourable than those which he had enjoyed with

the appellant.

High Court findings on the evidence

On the evidence the learned High Court judge made the following findings:-

(a) There was little disagreement between the parties as to the terms of the contract of employment. In dispute, however,

was the respondent’s entitlement to a Christmas bonus of €

1,500 and an annual bonus of €5,000. The learned High Court judge found that the respondent had earned each of these

bonuses and awarded the respondent the same in respect

of the period 31st May 2001 to the 19th January 2002 in the amount of €9,079.00.

(b) It was a term of the respondent’s contract of employment that the appellant acting reasonably could assign him from one

work location to another and from one management function

to another appropriate management function. Change of work location was not an issue for the respondent. The appellant

was entitled to transfer the respondent from buying to a

suitable position in store management commensurate with his experience.

(c) It was an implied term of the respondent’s contract that both the employer and the employee would maintain mutual

trust and confidence.

(d) The respondent sought to set up what happened between him and Mrs Heffernan on the 23rd November 2000 as a free

standing agreement. The appellant categorised the meeting

as a consultation process. The learned trial judge held that neither view was correct but that what transpired at the meeting

on the 23rd November 2000 must be interpreted in the

context of the implied term that both the employer and the employee would maintain mutual trust and confidence.

(e) The appellant acted bona fide in deciding to move the respondent from buying to store management.

(f) The respondent through Mrs Heffernan had a bona fide concern about the respondent’s health. The respondent worked

in the same building as Mrs Heffernan and their paths

crossed occasionally. The respondent was unwell from March 2000 onwards and this must have been obvious to anyone

who would meet him. He had an uncharacteristic number

of absences because of illness during 2000.

(g) The appellant’s treatment of the respondent up to and including 23rd November 2000 viewed objectively was such that

appropriate steps were taken by the appellant to allay the

respondent’s concerns in relation to the proposed move and to protect the employer and employee relationship.

(h) Mr McDermott (the respondent’s departmental head) or Mrs Heffernan or both “were subconsciously, if not

consciously, aware of the respondent’s vulnerability at the time of the

meeting of 23rd November 2000.”

(i) After the 23rd November 2000 Mr McNiffe failed to have proper regard to the respondent’s medical condition. This is

particularly so after the appellant was informed by the

respondent’s solicitor by letter of 7th December 2000 of the effects of the stress generated by his suspension on the

respondent.

(j) In the absence of knowledge of the respondent’s physical and mental condition an objective assessment of the

respondent’s conduct after 23rd November 2000 justifies the

conclusion that the respondent was being unreasonable. Samples of such conduct are the respondent’s refusal to share with

Mr McNiffe the issues which were troubling him and his

insistence on speaking to Mrs Heffernan at the meetings on the 28th and 29th November 2000, his reaction to Mr Sill’s

instruction in relation to dress code on 28th December 2000,

and some of his requirements in relation to the training programme produced on 14th March 2001.

(k) Mr McNiffe adopted an uncompromising stance with the respondent from the outset in requiring the respondent to

attend for work in Blanchardstown or else he would be

suspended. After the suspension was lifted Mr McNiffe would not deal with the respondent until he returned to work in

Blanchardstown notwithstanding that the respondent was on

sick leave and the appellant had been warned of the effect which his work situation was having on the respondent and of the

respondent’s perception of the appellant’s motivation.

The appellant maintained this stance for three months. The stance was informed by the appellant’s perception that the

respondent never had any intention of allowing the move to

Blanchardstown to work which view was erroneous.

(l) The respondent’s perception of the appellant’s motivation was reinforced by the error of including his name under the

heading “new trainee” on the roster in January 2001 and the

failure to supply him with a suitable training programme.

(m) The appellant ought to have been aware that the extension of the time frame for achieving a position as store manager

or regional manager from twelve months to eighteen months

would reinforce the respondent’s distrust.

(n) The delay of one week in producing a training programme would be inconsequential in the normal course of events. In

the present case, however, it would be of significance to the

respondent because it was envisaged that he would have it before he returned to work. The insistence that the respondent

return to work before the programme was available was

unnecessarily peremptory.

(o) The respondent’s submission that there was a series of breaches of the contract of employment by the appellant, the

accumulation of which resulted in a repudiation of the contract, is

not correct.

(p) The manner in which the appellant dealt with the respondent in the knowledge of the precarious nature of his physical

and psychological health viewed objectively amounted to

oppressive conduct likely to seriously damage the employer/employee relationship and it did so. Accordingly the appellant

breached its obligation to maintain trust and confidence.

Breach of that obligation goes to the root of the contract of employment.

(q) The respondent’s work situation prolonged the respondent’s ill health and caused his failure to respond to treatment.

(r) The respondent was justified in leaving his employment on receiving his treating surgeon’s advice.

(s) The respondent is entitled to an award of damages for wrongful dismissal in the amount which he would have earned

had he continued for a period commensurate with the notice to

which he was entitled: three months notice is reasonable notice.

The Law – Breach of Contract

There is implied in a contract of employment a mutual obligation that the employer and the employee will not without

reasonable and proper cause conduct themselves in a manner likely to destroy or seriously damage the relationship of

confidence and trust between them. The term is implied by law and is incident to all contracts of employment unless

expressly excluded. The term imposes reciprocal duties on the employer and the employee. In assessing whether there has

been a breach by the employer what is significant is the impact of the employer’s behaviour on the employee rather than

what the employer intended. Having regard to the mutuality of the obligation the impact of an employee’s behaviour is also

relevant. The test is an objective one: if conduct objectively considered is likely to cause serious damage to the relationship

between employer and employee a breach of the implied obligation may arise. Malik v Bank of Credit and Commerce

International S.A. [1996] I.C.R. 406.

In Lewis v Motorworld Garages Limited [1986] I.C.R. 157 Browne-Wilkinson J. summarised the law as follows:-

1. In order to prove that he has suffered constructive dismissal an employee who leaves his employment must prove that

he did so as a result of a breach of contract by his

employer, which shows that the employer no longer intends to be bound by an essential term of the contract: see Western

Excavating (E.C.C.) Limited v Sharp [1978]

I.C.R. 221.

2. However, there are normally implied in a contract of employment mutual rights and obligations of trust and

confidence. A breach of this implied term may justify the

employee in leaving and claiming that he has been constructively dismissed: see Post Office v Roberts [1980] I.R.L.R.

347 and Woods v W.M. Car Services

(Peterborough) Limited [1981] I.C.R. 666, 670 per Browne-Wilkinson J.

3. The breach of this implied obligation of trust and confidence may consist of a series of actions on the part of the

employer which cumulatively amount to a breach of the

term, though each individual incident may not do so. In particular in such a case the last action of the employer which

leads to the employee leaving need not itself be a

breach of contract; the question is, does the cumulative series of acts taken together amount to a breach of the implied

term. See Woods v W.M. Car Services

(Peterborough) Limited [1981] 1 C.R. 666. This is the ‘last straw’ situation.”

As to the “last straw” it was held in Omilaju v Waltham Forest London Borough Council [2005] 1 All. E.R. 75 that the

quality that a “last straw” had to possess was that it was an act in a series whose cumulative effect amounted to a breach of

the implied term. The essential quality of that act was that, when taken in conjunction with the earlier acts on which an

employee relied, it amounted to a breach of the implied term of trust and confidence.

As to whether conduct amounts to a repudiation of the contract the ordinary law of contract applies: the cumulative effect of

the acts complained of must be such as to indicate that a party, in this case the employer, had repudiated its contract.

Brown v Merchant Ferries Limited [1998] I.R.L.R. 682. It had earlier been held in Woods v W.M. Car Services

(Peterborough) Limited [1981] I.R.L.R. 347 by Browne-Wilkinson J. following Courtaulds Northern Textiles Limited v

Andrew [1979] I.R.L.R. 84 that any breach of the implied term that the employers will not, without reasonable and proper

cause, conduct themselves in the manner calculated or likely to destroy or seriously damage the relationship of confidence

and trust between employer and employee was a fundamental breach amounting to a repudiation since it necessarily went to

the root of the contract. This broad statement was not accepted by the Court of Appeal in Bliss v South East Thames

Regional Health Authority [1985] I.R.L.R. 308. Nor was it accepted by Douglas Brodie in an article in the Industrial Law

Journal, Volume 25, No. 2 at p.121 which article was referred to with approval in both Malik v Bank of Credit and

Commerce International and in Browne v Merchant Ferries Limited.

It must not be forgotten, however, that the implied term applies to both the employer and the employee. Thus in Woods v

W.M. Car Services (Peterborough) Limited [1981] I.C.R. 666 Browne-Wilkinson J. said:-

“In our view it is clearly established that there is implied in a contract of employment a term that the

employers will not, without reasonable and proper cause, conduct themselves in a manner calculated or likely

to destroy or seriously damage the relationship of confidence and trust between the employer and employee:

Courtaulds Northern Textiles Limited v Andrew [1979] I.R.L.R. 84. To constitute a breach of this implied

term it is not necessary to show that the employer intended any repudiation of the contract; the Tribunal’s

function is to look at the employer’s conduct as a whole and determine whether it is such that its effect, judged

reasonably and sensibly, is such that the employee cannot be expected to put up with it: see British Aircraft

Corporation Limited v Austin [1978] I.R.L.R. 332 and Post Office v Roberts [1980] I.R.L.R. 347. The

conduct of the parties has to be looked at as a whole and its cumulative impact assessed; Post Office v

Roberts.”

The learned trial judge’s finding in the present case on this aspect was as follows:-

“In my view the (respondent’s) submission that there was a series of breaches of contract on the part of the

(appellant) and that the accumulation of those breaches resulted in a repudiation by the (appellant) of the

(respondent’s) contract is not correct. The correct interpretation of what happened is that the manner in which

the (appellant) dealt with the (respondent) in the knowledge of the precarious nature of his physical and

psychological health viewed objectively amounted to oppressive conduct. It was likely to seriously damage

their employer/employee relationship and it did so. Accordingly, the (appellant) breached its obligation to

maintain the (respondent’s) trust and confidence.”

The learned trial judge found that up to and including the 23rd November 2000 objectively the appellant took appropriate

steps to protect the employer and employee relationship. Having regard to the learned trial judge’s findings it is necessary to

look at the conduct of each of the parties after the 23rd November 2000. The appropriate test must be applied to that

conduct. In relation to the test the following matters are to be noted:-

1. The test is objective.

2. The test requires that the conduct of both employer and employee be considered.

3. The conduct of the parties as a whole and the accumulative effect must be looked at.

4. The conduct of the employer complained of must be unreasonable and without proper cause and its effect on the

employee must be judged objectively, reasonably and sensibly in

order to determine if it is such that the employee cannot be expected to put up with it.

Conclusion on the breach of contract claim

The test must be applied to the events which occurred after the 23rd November 2000.

On the 27th November 2000 the respondent was instructed to report to Blanchardstown. He did not do so. The appellant

made contact with him and discussions took place over the 28th and 29th November 2000. The learned trial judge found

that at that date the appellant was “subconsciously” aware of the respondent’s vulnerability. The appellant was indeed aware

that the respondent suffered from Crohn’s disease. However the appellant was first notified that stress was exacerbating his

Crohn’s disease on receipt of the solicitor’s letter of the 7th December 2000. There was no evidence to justify a conclusion

that at the date of these events the appellant’s were aware of the respondent’s mental condition or if it’s effect on his

Chron’s disease. Applying an objective test to the suspension of the respondent with pay it cannot be said, in my view, that

the same was unreasonable. The appellant acted bona fide and within its rights in deciding to move the respondent from

buying to store management and to the location at Blanchardstown. The respondent’s refusal to co-operate until such time

as he should speak to Mrs Heffernan was in my view unreasonable. In Harrington v Irish Life and Permanent Plc, the

High Court, unreported 18th June 2003 Smyth J. stated the law as follows:-

“(a) The following basic principles are applicable:-

1. the employer impliedly contracts to obey the lawful and reasonable orders of his employer (or his employer’s delegate)

within the scope of the employment he

contracted to undertake. Chitty on Contracts (24th ed. Vol. 2 para. 37-050); and

2. it has long been part of our law that a person expudiates the contract of service if he wilfully disobeys the lawful and

reasonable orders of his Master. Such a

refusal fully justifies an employer in dismissing him summarily.

(Per Karminski L.J. in Pepper v Webb [1969] 2 All E.R. 216 at 218, cited with approval

and adopted by Hamilton J. as he then was in Brewster v Burke & Anor [1985] 4

J.I.S.L.L. 98 at p.100).”

Notwithstanding the seriousness of the respondent’s refusal to comply with the direction given to him the appellant did not

seek to dismiss the respondent but rather adopted the significantly less draconian measure of suspending him with pay. This

course was adopted only after three meetings over two days at which the respondent was asked to re-consider his stance.

Objectively the respondent’s conduct was unreasonable. On hearing from the respondent’s solicitor by letter dated 7th

December 2000 the appellant gave an unequivocal assurance of willingness to overlook the incidents provided the

respondent returned to work as soon as his doctor should certify him as fit to do so.

When certified fit to return to work the respondent did return on the 28th December 2000. By this date the appellant was on

notice of the state of the respondent’s health having received his solicitors’ letter of 7th December 2000. However the

respondent had been certified as fit to return to work by his medical adviser and the appellant was entitled to rely on this.

Immediately the incident relating to the dress code for managers occurred. The respondent required that Mr Sills instruct

him in writing as to the dress code. The exchange, according to the respondent, was not an unpleasant one but the request to

put the dress code in writing would justify concerns in the appellant as to the course of future interaction with the

respondent. The occurrence, however, is neutral for present purposes neither party having acted unreasonably.

The next incident which occurred was the error in the Drapery Management Analysis or roster which described the

respondent as a new trainee. It was a mistake and was promptly acknowledged by the appellant as such. It offended the

respondent. However mistakes occur and there is no reason to consider what occurred other than as a mistake. The

appellant did not act unreasonably and judged objectively the effect upon the respondent could not reasonably have been

anticipated.

The respondent objected to the personalised training plan as being appropriate to a newly joined trainee and as ignoring his

twenty one years experience. However he was new to homewares. As pointed out by the appellant much had changed in the

period during which the respondent was absent from store management and operating as a buyer. Nonetheless reasonable

attempts were made to accommodate the respondent’s concerns and a new plan was provided albeit seven days too late. I

would not categorise the appellant’s conduct in relation to the plan viewed objectively as unreasonable. There was a

willingness to accommodate some, if not all, of the respondent’s concerns. The learned trial judge found that the appellant

was aware of the respondent’s vulnerability at the date of preparation of the original training plan: I understand this to mean

the normal anxiety and concern which any employee might feel on a significant change in his employment taking place. I do

not consider the appellant’s course of conduct in relation to the training plan as unreasonable or oppressive.

The correction to the Drapery Management Analysis was not in the form agreed but was in substance to like effect. Its

circulation was narrower than required. The Analysis was a document internal to Blanchardstown being the store’s duty

roster for a particular week. It consisted of a printed document with a number of columns each headed with a brief

description of an employee category or function: one such heading was “new trainee” and while not appropriate to the

respondent this was the heading best reflecting the respondent’s situation. The form was completed in manuscript listing the

names of employees under each category. The respondent required the correction to be circulated by e-mail and internal

post to all stores in Ireland, the U.K. and Spain and the respondent through Mr McNiffe accepted that there would be

circulation by e-mail to all stores. The correction was circulated to department heads, store managers and regional managers

in Ireland. I am of the view that the original limited circulation would not justify the very wide circulation required by the

respondent. However his requirement was acceded to by the appellant but not complied with. I am, however, satisfied that

the default by the appellant could not amount in isolation to a breach of the implied term in his contract of employment.

Meetings were agreed to take place on a monthly basis and no meeting took place on the 8th May 2001. However as the

learned trial judge held this was entirely reasonable as the respondent had attended for work on only four days in December

2000 and did not attend thereafter until late April 2001.

The final matter to which it is appropriate to refer is what occurred when the respondent returned to work at the end of

April 2001. On the 15th May 2001 he was rostered for duty from 10 a.m. to 8.30 p.m. but he incorrectly believed that he

had been rostered for duty from 8.30 a.m. to 6.00 p.m. When he was required by Mr Sills to remain on duty until 8.30 p.m.

there were heated exchanges with Mr Sills insisting that he work until 8.30 p.m. and the respondent refusing to do so. The

respondent did not work beyond 6 p.m. and his final salvo was that Mr Sills could deal with his solicitor. This was part of a

consistent pattern of conduct and not an isolated incident: the respondent objected to written communications to him being

sent to him directly and required that all such communications should be sent to his solicitor. I consider the respondent’s

stance in this regard as damaging to the relationship and unreasonable.

That being the history of interaction between the appellant and the respondent and looking at each event individually and at

the events cumulatively, I am satisfied that the conduct of the appellant judged objectively was not such as to amount to a

repudiation of the contract of employment. The conduct judged objectively did not evince an intention not to be bound by

the contract of employment. On the other hand the conduct of the respondent was in the instances mentioned above

unreasonable or in error and the employer’s conduct must be considered in the light of the same. In these circumstances the

purported acceptance of repudiation of the contract of employment by the respondent was neither justified nor effective.

The respondent must fail on his claim under this heading.

The law - personal injuries claim

As the learned trial judge found, this claim can be based in contract or in tort and it is not necessary to distinguish between

the two causes of action. The respondent claims that as a result of the appellant’s breach of contract or breach of duty to

him he incurred a recognised psychiatric illness and not mere hurt, upset and injury to his feelings and in addition physical

injury being the exacerbation of his Crohn’s disease.

In Maher v Jabil Global Services Limited [2005] 16 E.L.R. 233 the plaintiff claimed that as a result of his treatment by his

employer, the defendant, he suffered significant psychological harm. The plaintiff claimed that the amount of work which he

was required to perform and the pressure under which he was placed by management to achieve targets which he claimed to

be unrealistic gave rise to stress and that his employers knew or ought to have known that stress was a likely consequence

of their conduct. As authority for the proposition that an employer may be liable for stress engendered injury to health of an

employee as opposed to ordinary occupational stress the learned trial judge referred to McGrath v Trintech Technologies

Limited [2005] E.L.R. 49, Quigley v Complex Tooling and Moulding, unreported, High Court, Lavan J. 9th March 2005

and Hatton v Sunderland [2002] 2 All E.R. 1.

The Court of Appeal in Hatton considered four cases in each of which as a result of stress the plaintiff suffered psychiatric

illness. In examining the law the court went back to first principles – liability in negligence depends upon three inter-related

requirements:

1. The existence of a duty to take care.

2. A failure to take the care which can reasonably be expected in the circumstances and

3. Damage suffered as a result of that failure.

The court held that special problems attend claims for psychiatric injury and that they require care in determination because

they give rise to difficult issues of foreseeability and causation and in identifying a relevant breach of duty. As to

foreseeability, the issue in most cases will be whether the employer should have taken positive steps to safeguard the

employee from harm and the threshold to question is whether the kind of harm sustained to the particular employee was

reasonably foreseeable. The test is not concerned with the person of ordinary fortitude. The answer may be found in asking

the question whether the employer knew or ought to have known of a particular vulnerability. Stress is merely a mechanism

whereby harm may be caused and it is necessary to distinguish between signs of stress and signs of impending harm to

health. Frequent or prolonged absences from work which are uncharacteristic for the person concerned may make harm to

health foreseeable: there must be good reason to think that the underlying cause is stress generated by the work situation

rather than other factors. Where an employee is certified as fit for work by his medical adviser the employer will usually be

entitled to take that at face value unless there is a good reason for him to think to the contrary. As to the duty of care the

employer’s duty is to take reasonable care and if the risk of harm to health is foreseeable the employer must act reasonably.

It is necessary in each case to consider what the employer could and should have done. Finally if a breach of duty is found it

is still necessary to show that that particular breach of duty caused the harm complained of: where there are several factors

contributing to stress related illness if the employer made a material contribution he will be liable for the whole subject to

any rights he may have to seek contribution from others who have contributed to the injury.

Hale L.J. set out a number of propositions which she derived from the case law the following being relevant to this case:-

1. The ordinary principles of employer’s liability apply.

2. The threshold question is whether the kind of harm to the 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).

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 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 employer is generally entitled to take what he is told by his employee (including what he is told by the employee’s

medical adviser) at face value unless there is good reason to

think to the contrary.

5. 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.

6. 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 cost and practicability of preventing it, and the justifications for running the risk.

7. An employer can only reasonably be expected to take steps which are likely to do some good: the court is likely to need

expert evidence on this.

8. If the only reasonable and effective steps 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.

9. In all cases it is necessary to identify the steps which the employer both could and should have taken before finding him

in breach of his duty of care.

10. The claimant must show that the breach of duty caused or materially contributed to the harm suffered. It is not enough

to show that occupational stress has caused the harm.

The medical evidence in this case is as follows. On the 31st January 2001 Professor Colm Ó Moráin, Consultant

Gastroenterologist, wrote to the respondent’s solicitor a short report as follows:

“This is to confirm that Adam is a patient of mine. He has Crohn’s disease for which he has had a previous

resection done in the eighties but since then he has had recurrence. Over the last while he has had an

exacerbation of symptoms and I have no doubt the recent wrangle has exacerbated his symptoms and has

resulted in him having to increase his medication.”

In a further short report dated 25th April 2001 Professor Ó Moráin reported as follows:-

“Adam is having ongoing problems with his Crohn’s disease. He had a recent exacerbation and as a result of

this he has a probable mass on the right side of his bowel which represents an inflamed portion of his bowl. I

feel this is pressing on his bladder and as a result is causing recurrent urinary tract infections. He does need

ongoing treatment and unfortunately the continuous stress at work is not helping his symptoms. We are closely

monitoring his progress at the moment and he does require strict medical supervision at the moment but I am

concerned that the level of stress at work may well be exacerbating his symptoms.

In a report of 31st May 2001 Professor Ó Moráin reported as follows:-

“In the last year, however, Adam has been having a flare-up of his Crohn’s disease and I do feel that the

psychological stress he is undergoing has a major role to play in this exacerbation. The flare-up has been

characterised by more frequent visits to me and increasing his doses of medication, more marked since

February 2000. With his present exacerbation he will be closely monitored at weekly intervals for the next few

weeks.

I am concerned about Adam’s deterioration of health and after a long discussion with him I do think that his

work situation is certainly not helping health wise and I feel the best approach would be for him to get out of

this environment. I feel this would be a positive contribution to his health.”

As to the respondent’s psychological condition there was a report from Dr. Paula McCoy, Consultant Psychiatrist. The

following paragraphs of the report set out her opinion:-

“29. The background here appears to be that of a normal individual, with a stable, social and personal family

background; and a record of high achievement at the work place, notwithstanding the fact that Mr Berber has

suffered from a chronic inflammatory bowel disease since his teens with arduous treatment required at times.

30. The history and clinical findings as I have elicited them would accord with the development of a

psychological adjustment disorder, with features of anxiety and possible features of depression, in Mr Berber

occurring on a background of work place stress over many months, following the occurrence of the events

under consideration. This disorder is likely to have been of moderate severity.

31. It is recognised that the occurrence of ongoing stress disorders may be associated with less favourable

clinical outcomes in some chronic medical conditions, including Crohn’s disease and hypertension. In my

view the occurrence of the psychological disorder noted at 31 above is likely to have contributed to symptom

severity and possibly, to symptom duration in Mr Berber’s Crohn’s disease.

32. The psychological disorder noted at 31 above appears in Mr Berber’s case to have resolved over the

months following resolution of the situational stresses with which it was associated (work place difficulties

and ensuing period of unemployment). I expect that Mr Berber’s close family support, and his previously

stable personality with the passage of time have been favourable factors in his recovery from this disorder.”

The Civil Liability Act 1961 in section 2 defines personal injury as including any disease and any impairment of a person’s

physical or mental condition. The learned trial judge accepted Dr. McKay’s evidence and found, as she was entitled to do

on the evidence, that the adjustment disorder from which the respondent suffered constituted an illness or injury and that it

exacerbated the respondent’s Crohn’s disease and hampered treatment of that disease. She found that the adjustment

disorder and the consequential impact was attributable to the manner in which the appellant dealt with the respondent after

23rd November 2000. She found that the injuries suffered by the respondent were reasonably foreseeable and that for the

like reasons for which the appellant had been found in breach of contract it was in breach of duty. As I have found that the

appellant was not in breach of contract it is necessary to look at those circumstances again and apply to them the appropriate

test.

Causation is not an issue in that the personal injury arose out of the circumstances existing in the work place. The learned

trial judge found that at the relevant times the appellant was subconsciously aware of the respondent’s vulnerability. This

being so I am satisfied that a reasonable employer applying its mind to the situation would in fact be aware of that

vulnerability. However that is not a vulnerability to mental injury but rather that the respondent felt vulnerable by reason of

the changes in his occupation from buyer to a position in training for store management. If the respondent had applied its

mind to the situation I am satisfied that it was also foreseeable having regard to his vulnerability that if it should fail to take

reasonable care it would result in stress. From receipt of the respondent’s solicitor’s letter of the 7th December 2000 the

appellant was actually aware that the respondent was suffering from stress and that the stress was affecting the respondent’s

Crohn’s disease. Accordingly, at least from receipt of the letter of 7th December 2000 the respondent had a duty to take

reasonable care not to cause harm.

The question for determination then is whether the appellant took reasonable care. What is reasonable depends upon the

foreseeability of harm, the magnitude of the risk of that harm occurring, the gravity of the harm which may take place, the

cost and practicality of preventing it, and the justifications for running the risk: Stokes v Guest Keen and Nettlefold (Bolts

and Nuts) Limited [1968] 1 W.L.R. 1776. In Hatton v Suderland, Hale L.J. said:-

“It is essential therefore, once the risk of harm to health from stress in the work place is foreseeable, to

consider whether and in what respect the employer has broken that duty. There may be a temptation, having

concluded that some harm was foreseeable and that harm of that kind has taken place, to go on to conclude

that the employer was in breach of his duty of care in failing to prevent that harm (and that the breach of duty

caused the harm). But in every case it is necessary to consider what the employer not only could but should

have done.”

I have already held had that the employer’s reaction to the events of the 27th, 28th and 29th March 2001 was reasonable.

In the incident relating to the dress code there were exchanges but they were not heated and I am not satisfied that the

appellant acted other than reasonably. The mis-description in the roster was a mistake and any harm resulting from the same

in my view was unforeseeable. The error in relation to the hours upon which the respondent was rostered for duty was the

respondent’s mistake. The wording of the circular correcting the error in substance was as agreed. Its circulation was less

than that agreed but, insofar as that fell short of the circulation agreed, the shortfall looked at in terms of the circulation of

the error was not such as to make injury foreseeable. The training programme as originally drafted the discussions

concerning its contents and the seven days delay in producing the revised training plan taken together are not circumstances

which make mental injury foreseeable. Insofar as the appellant was unwilling to discuss the contents of the plan while the

respondent was absent from work due to stress and its effect on his Crohn’s disease it was perhaps more beneficial to the

respondent that matters causing him stress should not be discussed until he was certified fit to return to work by his medical

adviser. Had the appellant insisted on discussing the training plan at a time when the respondent was certified as unfit for

work such conduct might well be regarded as oppressive conduct. Each of the incidents raised in the course of the hearing

and which occurred after the 23rd November taken individually fails on the test of foreseeability. I am satisfied that

cumulatively they also fail. The appellant responded reasonably to each incident as it arose and the alternative available to

the appellant was to abdicate from all control of the manner in which the respondent would carry out the duties of his

employment.

The injury sustained by the respondent being unforeseeable the respondent’s claim based on breach of duty must fail.

Conclusion

For the reasons hereinbefore set out I will allow the appeal and set aside the judgment of the High Court save and except in

so far as the sum of €9,079.00 was awarded to the respondent in respect of Christmas and annual bonus which sum should

carry interest at Courts Act rate from the 1st June 2001.

Dunnes Stores v Berber