Cost-cutting, downsizing, outsourcing, restructuring, closures and fears of job safety have made workplaces ever-more stressful, with employees feeling under pressure to work harder than ever before.
But even the hint of an employee suffering the effects of stress in the workplace has managers running for the employment law handbook and the procedures manual.
Until recently the onus has been on the employer to prevent stress in the workplace for fear of claims by employees of constructive dismissal, or worse, personal injury, with its potentially unlimited damage awards.
A ruling by the Court of Appeal is set to change that and increase the responsibility of employees. But that doesn’t let employers off the hook.
Stress in the new millennium is to the work-place what back pain was in the 90s. It is now one of two main causes of absenteeism, accounting for 6.5 million days, at a cost of £1.2bn. It is ironic that the average employee takes the equivalent of a third of their annual leave entitlement in sickness absence.
Meanwhile, the employer has borne the strain. Trades Union Congress figures show a twelve-fold increase in claims involving stress being made against employers between 2000 and 2001, rising from 516 cases to 6,428.
In reality, stress claims are harder to bring than the high profile cases would suggest, and this is set to become even harder with the recent decision by the Court of Appeal.
Legally, the employer is liable for stress in the workplace in three ways: if an employee…
- Develops a psychiatric illness as a result of stress at work, employers can be liable for a personal injury claim stemming from their obligation to take reasonable care of the employee’s health and safety.
- Complaints to the employer about stress 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.
- Develops a recognised mental illness, they may come under the protection of the Disability Discrimination Act 1995. An employer’s treatment could be regarded less favourably under this Act, giving them claim for discrimination.
But new guidelines by the Court of Appeal will improve the position for employers, shifting the onus for personal injury stress claims on the employee and reducing the likelihood of action 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 are:
- It is necessary for the employee to have a psychiatric injury and not merely be experiencing occupational stress (although employers must be aware of constructive dismissal arguments if they ignore an employee’s complaints).
- The psychiatric illness must be caused by an employer who has breached their obligation of trust towards the employee. The psychiatric illness must be the direct result of work and not caused by other outside factors.
- The injury must have been foreseeable. The claimant’s work must have posed a real risk of causing psychiatric illness and their employer must, or ought to have, known the claimant was at risk. The employee now has an obligation to discuss difficulties with their employer.
- Given the foreseeable 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.
- 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 guidelines do not let the employer off the hook.
There are five key actions an employer can take to reduce the risk of court action:
- The employer needs to be aware of the warning signs and act: high absence levels, complaints about stress, overtime being regularly worked, and the 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 employee complains about 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 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 it. The employer is only required to take steps which will do some good and may need to refer to expert opinion when considering the risks. They also need to take into account the interests of other employees – such as the effects of reallocation of duties.
- Most importantly, the Court of Appeal has held that an employer that offers a confidential advice service with referral to appropriate counselling or treatment, is unlikely to be found in breach of duty.
If the only reasonable and effective step would be to dismiss or demote the employee, an employer is not in breach of its duty if it allows a willing employee to continue working. Where no useful steps are to be taken, no duty arises.
An employer must bear in mind that if an employee develops a psychiatric injury they are likely to be disabled and the employer must consider how the employee is treated, regardless of whether they are liable. Dismissal or failure to make reasonable adjustments could result in a disability discrimination claim.
This ruling appears to squarely distribute responsibility and is in line with the changes to be made under the Employment Bill, where employees will be penalised for bringing claims without first using internal procedures.
Together, they will encourage employees and employers to put into place effective internal procedures to reduce the spiralling number of court or tribunal claims.
- Emma Grace, a partner in employment law with Nelson & Co Solicitors.
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