Stress in the workplace - who takes the strain?

Even the hint that an employee might be suffering the effects of stress caused by unreasonable demands in the workplace has UK managers running for the employment law handbook and the policies and procedures manual.

Until recently the onus rested on the employer to identify and prevent stress, for fear of claims by employees either for constructive dismissal or, worse, for personal injury, with its potentially unlimited damage awards.

A ruling by the Court of Appeal [Sutherland (Chairman of the Governors of St Thomas Becket RC High School) v Hatton] in February 2002 is set to change that and to increase the responsibility of employees in the equation. But that doesn't let employers off the hook.

Stress nowadays is to the workplace what back pain was in the 1990s. It is one of two main causes of absenteeism, accounting for 6.5million days a year, at a cost of 1.2bn. The average employee takes the equivalent of a third of their annual leave entitlement in sickness absence.

It has been the employer who has borne the strain. Trades Union Congress fiures show a 12-fold increase in claims involving stress being made against employers between 2000 and 2001, with figures rising from 516 cases to 6,428.

In reality, stress claims are harder to bring than the high-profile cases would suggest. They are set to become even harder following the Sutherland decision.

Legally, the employer is liable for stress in the workplace in three ways:

1. If an employee develops a psychiatric illness, as a result of stress at work, the employer can be liable for a personal injury claim made against them. This stems from their obligation to take reasonable care of the employee's health and safety.

2. If an employee complains to the employer about the stress they are experiencing, as a result of their work, the employer is liable to take reasonable steps to address the problem. To ignore the complaints could be considered constructive dismissal on the basis of a breach of mutual trust and confidence.

3. If an employee develops a recognised mental illness, they may come under the protection of the Disability Discrimination Act 1995. An employer's treatment could be regarded as less favourable under this Act, giving them claim for discrimination.

However new guidelines set down by the Court of Appeal are set to improve the position for employers, shifting the onus for personal injury stress claims towards the employee and reducing the likelihood of personal injury action being brought against the employer.

The basic premise is that an employer is entitled to assume an employee can withstand the normal pressures of the job, unless they are made aware of some vulnerability or problem. The new guidelines put in place criteria for a claim against an employer to be considered valid, the most important of which from the employers point of view are:

1. The employee must have a psychiatric injury and not merely be experiencing occupational stress. Simply being stressed is not something an employee can claim for (although employers must be aware of constructive dismissal arguments if they ignore an employee's complaints).

2. The psychiatric illness must be caused by the employer, who has breached their obligation of trust towards the employee. The illness must be the direct result of work and not caused by factors outside work, for which the employer is not liable.

3. The injury must have been foreseeable. The claimant's work must have posed a real risk of causing psychiatric illness and their employer have known, or ought to have known, the claimant was exposed to that risk. Most importantly, the employee now has an obligation to discuss any difficulties they are experiencing with their employer.

4. Given the forseeable risk, the employer must be shown to have failed to take reasonable or adequate steps to reduce the risk of psychiatric harm to the claimant. There is a duty on the employer to take reasonable steps to address the problem. To fail to do so could lead to two possible claims - constructive dismissal or a personal injury claim.

5. The claimant's psychiatric illness was caused or materially contributed to by the work and the employer's breach of duty.

The Court of Appeal guidance has brought some important concessions to the employer, making dealing with the 'stressed' employee much easier. But the new guidelines do not let the employer off the hook. There are, therefore, five key actions an employer can take to reduce the risk of court action being brought against them:

The employer needs to be aware of the warning signs and act: high absence levels, complaints about stress, overtime being regularly worked on a general level, and personal circumstances or vulnerabilities of employees at an individual level.These potentially put the employer on notice that there is a problem and that they need to take positive action.

Where an individual employee complains about high levels of stress, they are entitled to be taken at face value, unless the employer has good reason not to believe this. An employer should therefore treat employees, who come forward, sympathetically and investigate their concerns.

Factors to take into account include the volume and demands of the workload compared with other employees at the same level, whether other employees are showing signs of strain, the individual's pre-disposition to stress and evidence of the individual having shown signs of work-induced stress.

Where a problem does exist the employer must take 'reasonable steps' to address the problem. The employer is required only to take steps, which will actually do some good and may need to refer to expert opinion eg medical advice when considering the risks. They will also need to take into account the interests of other employees - for example the effects of reallocation of duties amongst other staff.

Most importantly, the Court of Appeal has held that an employer which offers a confidential advice service, with referral to appropriate counselling or treatment services, is unlikely to be found in breach of duty.

If the only reasonable and effective step would have been to dismiss, or demote the employee, then an employer is not in breach of its duty if it allows a willing employee to continue working.

Where there are no useful steps to be taken, then no duty arises.

An employer must always bear in mind that if an employee develops a psychiatric injury, they are likely to be disabled and the employer must consider carefully how they treat the employee, regardless of whether they are liable for the illness. Dismissal, or failure to make reasonable adjustments could result in a disability discrimination claim - with the risk of potentially unlimited damages.

This is one ruling which does appear to squarely distribute the strain. It is very much in line with the changes due to be made under the Employment Bill, where employees will be penalised for bringing claims without using the internal procedures first.

Together, they will encourage both employees and employers to put into place effective internal procedures and reduce the spiralling number of claims which make it to Court or Tribunal.