Stress in the workplace

Product liability: definition of 'product' extended

Extension of Maternity and Adoptive leave

Private sector helps to develop public infrastructure

The dangers of IT misuse in the workplace

New Pensions and Employee Benefits Group

Protecting your trade mark: how we can help

Up until relatively recently, the concept of employers' liability in respect of their employees had been almost exclusively characterised by and applied to physical injury. However, in more recent times considerable attention has been focused upon employers' liability for the physical and psychological (or psychiatric) illness caused by stress suffered by employees in the course of their employment.

Workplace stress arises when the demands of a person's job and/or the working environment exceed the person's capacity to meet them. For example, this could be caused by lack of training, poor workplace environment (noise, heat, humidity, lack of space etc.), poor working relationships, dull repetitive work or highly demanding tasks. Moreover, keeping pace with the demands of the tiger economy has brought with it an invasion upon the personal time of employees by the use of mobile phones and the increasing practice of bringing work home. In addition, the interaction between managers and their subordinates is increasingly through email, resulting in less social interaction.

While the pressure of challenge can be a positive force in the workplace, when demands become excessive they may create a stress process that threatens the employee's physical and/or psychological well being.

The effects of stress within the workplace may result in higher than average staff turnover, increased levels of absenteeism, low morale, excessive accident rates and ultimately the possibility of legal action being taken against the employer. Indeed, international studies have indicated that the cost of occupational stress in Ireland could be as high as 10% of GNP.

In Ireland, the Safety, Health and Welfare at Work Act, 1989 obliges employers to identify and safeguard against all risks to health and safety. Controlling workplace stress is no more optional than the control of any other hazard. If an employer fails in its duty of care to employees this may result in a civil action for compensation by the employee and it may also be a breach of the criminal law. The Health and Safety Authority has the power to prosecute for breaches of the 1989 Act but to date has not taken any prosecutions for injury resulting from occupational stress.

In addition to the 1989 Act, the Employment Equality Act, 1998 has potential implications for such workplace claims by providing other potential avenues of legal redress for the stressed employee if the stress complained of is caused by discrimination under any of the grounds cited in the Act.

However, it is likely that victims will continue to use the Common Law to seek compensation for injury resulting from stress. The British case of Walker -v- Northumberland County Council (1995) set a precedent for employees pursuing such claims. The Walker case is widely regarded as of major significance in that an employee was awarded damages for psychiatric injury suffered as a result of work related stress. In this case, a Social Work Officer, engaged in a particularly stressful area of child abuse work, suffered a nervous breakdown owing to pressures of work in November, 1986. The employee was promised support on his return to work in March, 1987. The support was not forthcoming and he suffered a further breakdown forcing him to retire. He brought an action against the Local Authority. It was held that, prior to the first breakdown, it was not reasonably foreseeable to the Local Authority that Mr. Walker's workload would give rise to a material risk of mental illness. However, as regards the second breakdown, it was held that the Local Authority ought to have foreseen that if Mr. Walker was again exposed to the same workload, there was a risk that he would suffer another nervous breakdown which would probably end his career. Therefore, it was held that the Local Authority had acted unreasonably, and in breach of its duty of care, and was therefore liable in negligence for Mr. Walker's second nervous breakdown. Mr. Walker was awarded over £200,000 in damages. The case was settled before appeal for a reported £160,000.

Few such cases have been reported in the Irish Courts, possibly because they are usually settled. For example, last year there was an action by a pharmaceutical representative who claimed that he had suffered two nervous breakdowns due to an excessive workload. The case was settled in the High Court providing little in the way of reported precedent. It should provide a salutary warning to employers as the case is believed to have been settled for in or about £200,000. It appears that Irish employers must therefore accept mental breakdown, resulting from overwork, as yet another source of potential claims.

However, it should be noted that the duty upon an employer is not an unlimited one. The onus is on the employee to show that the injury suffered was foreseeable and was caused by conditions in the workplace as opposed to some other factor. In addition, the employee must prove a recognisable psychiatric illness. The employer will then be required to show that he acted reasonably in all the circumstances.

So what steps can employers take to safeguard themselves?

• Where employers are aware that a workload, or conditions of work, are particularly stressful, measures should be taken to reduce the workload and/or improve conditions.
• Problems are more likely to come to light, and be dealt with effectively and in a timely fashion if the organisation adopts a clear policy on occupational stress and stress prevention as part of its management arrangements and as part of its safety policy. The key to the success of the policy is to show that it has the full support and commitment of senior management. This will invariably involve action to raise awareness of the issue. The policy should acknowledge that work related stress is not a personal problem nor a weakness but an issue which the organisation as a whole can address.
• If stress is giving rise to risks in the workplace the employer must address it not only in a policy as outlined above but also in the organisation's Safety Statement. The Safety Statement should also emphasize the duty of care imposed on employees to take care of their own health and safety whilst at work.
• It is worth checking the company's employer liability insurance to ascertain whether it may cover awards in such cases, since psychiatric illness, by reason of the debilitating effect on the sufferer, may result in an enormous claim for loss of future earnings capacity.

Stress in the workplace is an important health and safety issue which cannot be ignored. By implementing appropriate measures, including measures such as those outlined above, employers ought help reduce the risk of potential litigation.

For further information please contact Hugh Garvey or Michael Kavanagh.

The definition of 'product' under the Liability for Defective Products Act, 1991 has been extended to include unprocessed agricultural products. In effect, this means that producers of primary or agricultural products may now be sued by consumers and may be held strictly liable for damage resulting from placing a defective product on the market. Retailers should bear in mind that they should keep track of their suppliers as this may help them in a defence of a defective product claim from a consumer by establishing that the liability should rest with the primary producer.

For further information please contact Hugh Garvey.

Good news for parents-to-be! The Government has increased the amount of leave that parents or adoptive parents can take from work.

Maternity leave in Ireland is largely governed by the Maternity Protection Act, 1994, section 3 of which permits the Minister to change the maternity leave rules by issuing a statutory instrument. Recently, the Minister has done just that.

Under the terms of the Maternity Protection Act, 1994 (Extension of Periods of Leave) Order 2001, any pregnant employee who, on or after 8 March 2001, commences maternity leave or additional maternity leave (the optional period of leave following on from maternity leave) will be entitled to:

• 18 consecutive weeks rather than 14 consecutive weeks as maternity leave, and
• Eight consecutive weeks rather than four consecutive weeks as additional maternity leave.

There is similar good news for adoptive parents. Under the Adoptive Leave Act, 1995 (Extension of Periods of Leave) Order 2001, the permitted periods of leave set out in the Adoptive Leave Act, 1995 have been increased from ten weeks' adoptive leave to 14 weeks' adoptive leave (plus an optional additional eight weeks' leave rather than the optional additional four weeks' leave previously allowed). The new provisions apply to any adopting mother or sole male adopter who commences adoptive leave or additional adoptive leave on or after 8 March 2001.

For further information please contact Jennifer O'Neill.

In the region of IR£1.85 billion has been earmarked under the National Development Plan to remedy the country's infrastructural deficit by way of Public Private Partnerships (PPPs) with more funding to follow. PPPs are partnerships or agreements between public sector organisations and private sector organisations for the purposes of designing, planning, financing, constructing and operating infrastructure projects traditionally provided by the public sector. The Government, by using PPPs, seeks to get better value for money through the use of private sectors skills to deliver a project with the allocation of risk to the party best able to manage it.

Tendering for PPP projects is not for the faint hearted and requires a high level of commitment and negotiation. A team of financiers, builders, lawyers, accountants and economic advisors is necessary to coordinate the tender bid and to negotiate the final documentation with the relevant local government authority.

Already, PPP projects have been awarded to the private sector in the area of roads and more will be coming on stream for tender in the near future. The PPP schemes will be design/ build/ finance/operate schemes with long term concession periods. Opportunities exist for clients who are involved in construction, banking, accountancy and economic analysis to get in on the ground floor in this developing area. Particular sectors to be developed by way of PPPs are transport, water/waste, light rail, education and health services.

The policy framework document for PPPs published by the Department of the Environment and Local Government (on its website at www.ppp.gov.ie) states that there are no fundamental difficulties with the legal capacity of local governments to enter into PPPs. Since the Irish Government agreed to adopt this approach on a pilot basis for the provision of infrastructure in August 1998, the pace of development has been accelerating. The Department of Finance has established a PPP Unit to coordinate developments in this area at governmental level. PPP Units have also been established in other departments.

Every PPP project involves a detailed legal agreement which will require commercial, construction and banking legal expertise. There are a myriad of legal or contractual forms which PPPs can take. These include: design and build contracts; design, build and operate contracts; design, build, operate and finance contracts; and concession contracts. The Government is currently working on standard PPP project documentation some of which may be based on the Private Finance Initiative documentation used in the UK. Private Finance Initiatives in the UK are similar to PPPs and have been up and running for well over a decade in the UK and have proved to be a successful way of developing various public infrastructure projects.

Some of the issues that have to be considered when drafting the appropriate legal agreements are risk allocation, terms of the concession, consequences of early termination, default, force majeure, step in rights and financing issues.

As the number of PPP projects coming on stream grows, interested clients should seek legal advice and support on all aspects of the PPP process from initial structuring and tendering through to financing and final contractual negotiations. L.K. Shields, Solicitors are well placed to provide all the necessary legal expertise to advise those who become involved in PPP projects.

For further information please contact Philip Daly.

Information Technology

Email and the Internet can provide access to large amounts of information and also allows the dissemination of such information. However, as with any new business media if left unchecked employers may ultimately be liable for any misuse by their employees. This poses a problem for employers insofar as the Internet and email may legitimately be used by employees in carrying out their duties. However, there are a number of instances whereby an employer may unwittingly find themselves the subject of litigation.

Copyright Infringement

With the ease of copying any electronic information in the digital era employers must take responsibility for ensuring that employees do not make unauthorised copies of proprietary software especially where copies may be used by the business itself. Employers may find themselves liable for copyright infringement (of software or an original database) where the employer negligently fails to supervise the employee's activity or gained a benefit from the exploitation of the infringing copy. An employer may have no method of verifying the source of the software and could very well be held to be vicariously liable for the conduct of its employees.

Defamation

Liability for an employer for defamation may arise in several circumstances. An employer itself may be liable for the defamation of an employee or vice versa and also vicariously liable for the defamation of a third party by an employee.

Employee Information

Employers retain much of their employee details, including employment records, in electronic form usually as a user-friendly database. Besides having to comply with the Data Protection Act, 1988 in relation to personal information, employers need to be careful in relation to the security of this information. If the employer does not he or she may find themselves liable for the unauthorised access of this information by an employee and its unauthorised dissemination. While in some circumstances the employer may not be liable, where the unauthorised access is due to the negligence of the employer, the employer will be on dangerous ground. The unauthorised accessing and copying of only part of the information kept by an employer may mean the information is misleading, incomplete or even potentially defamatory.

'Cyber Smearing'

An increasing problem in this area is the posting of libellous statements on an Internet news group or bulletin board by unhappy employees or former employees. The problem encountered in these circumstances is that these statements are often posted anonymously on the Internet, which makes it difficult to show who carried out the act. This is a real problem since not only will the identity of the person be unknown but the information will also be published to potentially millions of Internet users. The US experience has been to order the Internet service provider to reveal the authors of the statements. There are no Irish cases on this point so it remains an open question whether an Irish Court would adopt the same approach.

Defamation of Third Parties

Norwich Union in the UK found out to their cost (to the tune of £450,000) the dangers involved where employees disseminate false rumours about competitors via email. In that case the false rumours related to a competitor of Norwich Union, Western Provident. In addition to the potential liability for defamation (the case settled out of court), Western Provident also secured a court order that Norwich Union preserve the false emails on their system. The dangers involved in copying and forwarding emails that contain such information can only but be a concern for employers.

Scope of Employment

Generally vicarious liability will only be imposed on an employer where the employee is acting within the scope of the employee's employment. Therefore, if the employee is acting beyond this scope the employer may not be liable but one obvious problem with this is applying this test to the specific circumstances of a case and by implication, defining that employee's scope of employment.

However, some U.S. case law suggests that where the employee is acting outside his scope of employment that liability may still arise where it is established that the employer was negligent or failed to take reasonable steps to prevent the employee from carrying out the offensive act. Clearly from an employer's view it is best to regulate the access and conduct of the employee.

Internet access

The large amounts of information available on the Internet are for the most part a benefit to business. However, we have all heard of instances where employees have been found accessing or copying pornography or other indecent material on the Internet. This has obvious implications for co-employees and for the working environment provided by the employer. If left unchecked, this could be seen as a hostile working environment that could have wider employment ramifications. In order to reduce the risk employers should introduce technical means that block certain Internet sites. An Internet usage policy should be implemented which expressly states what access an employee is allowed and that this is specifically for the purposes of carrying out his duties.

Monitoring of Employee Email

In light of the above it is clear that employers may have legitimate business needs in monitoring employee emails however employers must be extremely careful not to fall foul of the constitutional right to privacy. Should an employer introduce a policy of monitoring employee email this policy should specifically be brought to the attention of the employee and signed by the employee. Any such monitoring should not be greater than is necessary to check the system. The best way to approach the matter is for an employer to put in place a detailed Internet and email usage policy. This will seek to limit the situations where an employee may cause an employer to be vicariously liable for employee actions.

For further information please contact Eoin Cunneen.

Our pensions and employee benefits group has been set up in response to client demand for advice in this ever growing area. This draws together our expertise in employment law with that of pensions and employee benefits.

Fiona Thornton has joined us as the partner responsible for our rapidly growing pensions and employee benefits practice. A leading expert in this field, she has particular experience of pensions schemes, mergers, reorganisations and wind-ups, corporate transactions and share plans for public and private companies.

Increasingly, we are finding that there is a need for pension trustees to be independently advised rather than rely on advice provided to the sponsoring employer. Given the increasing responsibilities and obligations placed upon trustees, it is apparent that they cannot afford not to be separately advised.

In future issues of our newsletter, we will be advising you of developments in this area, particularly anticipated changes in the taxation of share benefits due under the forthcoming Finance Act. We will also let you know how the forthcoming Pensions Bill may affect you and your business.

For further information contact Fiona Thornton.

You've worked hard to build up your business. Your brand is recognised and respected everywhere. Now someone else is trying to cash in on your reputation and the goodwill associated with your brand. What can you do?

Your first step should be to visit a trade mark agent. Here at L.K. Shields, Solicitors, we have an extensive intellectual property department and one of the areas on which it advises is trade mark law. We can advise on how to register your trade marks and tell you whether there are existing registered or unregistered marks that may prevent you from registering yours. This involves carrying out trade mark searches of various registers, some of which we can do on-line in our office.

The registration procedure involves preparing, filing and following up applications and dealing with any queries or objections raised by the Trade Marks Office. We also advise on the filing and defence of oppositions to a trade mark application. This includes operating a trade mark watch system for our existing intellectual property clients. We do not charge for our watch system unless we find a potentially conflicting application, which we will then notify you about.

We prepare for, and attend at, oral hearings on trade mark applications. Because of our comprehensive database system, we can notify you in advance of renewal (and other relevant dates) so that you can maintain your registered trade mark. We also process renewals.

We advise on all areas of enforcement and protection of registered marks, including any unregistered rights in your mark or other marks, whether by non-contentious or contentious means. We can also give you comprehensive advice on exploiting your trade marks, including advice on the assignment and licensing of trade marks.

LK Shields, Solicitors offers an equivalent range of services in relation to Community Trade Marks as administered by the Office for Harmonisation in the Internal Market. Through our extensive network of agents in other countries we can help you register and protect your trade marks worldwide. Our intellectual property department offers similar services in relation to patents.

For further information please contact Eoin Cunneen.