Jersey’s employment laws should be reviewed to settle the question over how much compensation workers can claim if the way they are sacked triggers a serious mental health issue, appeal judges have said.
The Court of Appeal has called on politicians to explicitly decide whether employees should be able to pursue separate civil claims for potentially substantial damages – beyond the remedies available through the Employment Tribunal – if they suffer psychiatric injury as a result of their dismissal.
The recommendation emerged from the Channel Islands Co-op’s successful appeal against a £3.5 million damages award to its former chief executive Colin MacLeod.
But the judges said the case had exposed an unresolved question in Jersey employment law which was ultimately one for politicians rather than the courts.
The issue centres on what is known as the ‘Johnson exception’, developed by UK courts to prevent employees effectively bypassing the limits imposed by employment legislation by pursuing a separate common-law damages claim over the manner of their dismissal.
A grey area
The principle reflects a concern that allowing parallel claims could undermine limits deliberately placed on employment remedies – including compensation caps and time limits.
But the Court of Appeal stressed that Jersey’s legislation is “differently worded” from that in England and Wales and has its own legislative history.
The judges said whether the Johnson exception actually forms part of Jersey law “remains open in this Court” because that fundamental question was not argued in the MacLeod appeal.
They added: “The next time Jersey’s employment protection legislation is reviewed, consideration [should] be given to addressing explicitly the question of whether that legislation should prohibit claims for psychiatric injury resulting from dismissal.”
“As the experience in England and Wales shows, there is much to be said on both sides of that question.
“In the end, this is a question of policy which, we would suggest, the legislature is better suited to resolving than the Courts.”
This is a question of policy which, we would suggest, the legislature is better suited to resolving than the courts
court of appeal
However, following a challenge by the Coop, Court of Appeal ruled that although distress, anger and upset were predictable consequences of his treatment, it was not reasonably foreseeable that he would suffer a recognised psychiatric disorder.
Mr MacLeod had no known vulnerability to psychiatric illness and was an experienced executive with a “strong personality”. He also accepted that he had not himself realised he was heading towards a breakdown.
“It was not established that it was reasonably foreseeable”
The judgment said: “It was not established that it was reasonably foreseeable that such an injury would be caused, whilst fully accepting that it would be entirely foreseeable that the respondent would be distressed, upset and angry at his treatment.”
But judges rejected every challenge brought by the Co-op against the Royal Court’s underlying factual findings.
Those included findings that senior figures had secretly gathered evidence against Mr MacLeod, “clearly targeted” him and sought his removal.
The conduct of three committee members was described as “improper, commercially unacceptable and unconscionable”, while appeal judges called Mr MacLeod’s treatment “unpleasant” and “reprehensible”.
The earlier judgment authorising that payment recorded that he understood it would have to be repaid if the Co-op succeeded. It said repayment could require the sale of his home, but the latest judgment does not contain a specific repayment order.
“Repetitive and florid”
In a final rebuke, the judges criticised the “lengthy, and at times repetitive and florid” paperwork filed in the appeal. The Coop’s written arguments ran to 150 pages, while Mr MacLeod’s response covered 140 pages.
The court warned that unnecessarily excessive submissions could result in special costs orders against a party or its advocate.
