Valmai Adams on bullying at work and work-induced stress. Valmai Adams is head of Nabarro Nathanson's employment group.

The problem for employers of protecting employees from workplace bullies has been highlighted by the recent action brought by Anthony Ratcliffe, the deputy head teacher who claimed he was bullied by colleagues to the point of a mental breakdown.

Ratcliffe accepted £101,028 in an out-of-court settlement after instituting proceedings in the High Court. The principles involved in the case are similar to those of the "landmark" decision in Walker v Northumberland County Council (1995), in which the employer was held liable for psychiatric damage suffered by an employee as a result of stress at work and paid £175,000 in settlement.

Although the press reports highlighted the bullying aspects of Ratcliffe, the main factor was the resulting stress which induced the breakdown. Employers are under a duty to take reasonable steps to ensure the health and safety of employees, including their physical and mental health. Employees bringing claims must not only establish a breach of this duty but prove that their injuries were foreseeable.

In Walker and Ratcliffe both employees had suffered a second mental breakdown and had made known their concerns about returning to the same position.

Both cases highlight the need for employers to take appropriate action as soon as they know an employee is suffering from stress. Ratcliffe also shows the potential vicarious liability of an employer for the actions of its other employees. Bullying can constitute an act of racial and sexual discrimination and/or harassment. Once an employer becomes aware of possible bullying, such acts would be construed as being committed in the course of employment.

Employers are also at risk of constructive unfair dismissal claims because failing to protect employees from stress and bullying by colleagues could be seen as a breach of an employer's duty of trust and confidence.

More claims can be anticipated, particularly in view of the proposed abolition of the unfair dismissal compensation cap.

In addition, the implementation of the Working Time Regulations in October will give certain employees further rights if they are required to work excessively long hours.