Wetherell v SLC Ltd: Disease claims and direct effect of EU Regulations

The Court of Appeal decision in Wetherell v SLC Ltd provides an important reminder that, despite the significant changes introduced by the Enterprise and Regulatory Reform Act 2013 and the UK's departure from the EU, certain employees may still be able to pursue workplace injury claims by relying directly on European Directives.

The Claimant, an employee of the Defendant, claimed damages in respect of tinnitus caused by a defective headset used during his work in a call centre. 

The claim failed in negligence as engineering evidence was available to say that the headset complied with the relevant UK Regulations in force at the material time. In any event the Enterprise and Regulatory Reform Act 2013 precluded the Claimant from founding a civil claim based on breach of the UK Regulations. As the Claimant could not found his claim on the UK Regulations or in negligence he sought to rely directly on the European Directive (2009/104/EC) known as the ‘Work Equipment Directive’. 

European directives can only have direct effect, that is to say they can be relied on by private individuals, in limited circumstances: (1) the person is employed by the state or an emanation of the state and (2) the directive requires a certain course of action to be taken which is  “unconditionally and sufficiently precise.”

In this instance the Claimant relied on Article 3 of the Work Equipment Directive that required:

The Court considered that Article 3 conferred an unqualified essential standard regarding the provision of work equipment and therefore was capable of having direct effect.

When considering whether the SLC was an emanation of the state the Court made clear that the application of direct effect to the central or local government is generally not contentious. However, where the state (central or local) acts through a private organisation things can get a little more complicated. The Court referred to and considered that the 2 stage test in Foster & oths. v British Gas 1990 ECR 3313 was incorrect:

The Court held that the test was not a 2 stage one at all. The test to be applied was set in Farrell v Whitty C-143/15 in that the points at (1) and (2) above need  not be cumulative and that if either one of them is answered positively then the entity could be  considered an emanation of the state, or put another way:

If the employer were found to be an emanation of the state it followed that the employee could directly enforce the provisions of the Directive against it. 

It should be noted that European Directives cannot and have never been able to be directly enforced between private individuals including companies. 
 

What does this all mean? 

It has long been accepted that employees of the state always had a choice as to whether to base a claim on a European Directive (pre-Brexit naturally) or on domestic legislation. In a majority of cases the domestic regulations were relied on. However, the Enterprise and Regulatory Reform Act 2013 removed the ability to found a claim directly on breach of domestic regulations. Claimants must therefore found their claims in negligence (breach of the Regulations being evidence of common law breach of duty).   

However, employees of the state (or emanations thereof) had and continue to have, notwithstanding Brexit,  an additional route to bring their claim based on the direct effect of relevant EC Directives where (1) the Directive was in force at the material time and (2) the Directive imposes a clear, unambiguous and unqualified duty on an employee to act (or not act) in  specified manner. 

It is arguable that some of the Directives which were in force imposed strictly liability. In the present case the need for the equipment to be able to be used safely was entirely unqualified with conditions of reasonableness, practicability or foreseeability. Think of Stark v The Post Office [2000] EWCA Civ 64 in respect of the Provision and Use of Work Equipment Regulations 1998 . 

Causation would remain in issue as an employee would still need to prove that the technical breach of the Directive was capable of (1) causing the loss of the type alleged and (2) the specific loss suffered by the Claimant (Holmes v Proteon EWCA Civ 1377). 

Where an entity was a state owned enterprise which subsequently has been privatised and the liabilities of the state enterprise have passed to the successor organisation, either by primary legislation or by virtue of TUPE it is likely that the direct effect could still be argued the period that the employer was the state or an emanation of the state. If and when the employer ceased to be the state or emanation of the state the application of direct effect would also cease. 

Public sector employers, their successors and their insurers, are therefore more exposed to potential liability as compared to their private counter parts as a result. However, the window of risk appears relatively small; from the date that the Enterprise and Regulatory Reform Act 2013 came into force to the date that the UK left the EU.