Why it pays to manage stress
The implications for employers of educated professionals for whom stress is now an occupational hazard
Stress is now one of the most important health and safety issues faced by employers. Following a three-year study, recent research by the Health and Safety Executive (HSE) reveals that up to five million workers in the UK suffer from extreme stress at work. The research also concludes that “educated professionals” are most likely to suffer from stress. On the basis that lawyers could be said to fall into this category, stress is a serious issue for the legal profession, particularly (according to the research) for those who are middle-aged, separated/divorced/widowed and earning in excess of £20,000. The only relatively stress-free occupation would appear to be hair and beauty, with 0% of respondents reporting extreme stress.
Other statistics also make alarming reading - stress now constitutes the biggest single issue in TUC personal injury claims and a MORI poll shows that 60% of working adults experience substantial symptoms of stress at work. Despite these surveys and recent caselaw in which record damages for stress have been awarded, further research reveals that the vast majority of employers do not know what their legal obligations are, have limited awareness and understanding of stress, and do little to risk assess or manage stress.
The Health and Safety Executive have defined stress as, “the reaction which people have to excessive pressures or other types of demand placed upon them. It arises when they worry that they can’t cope”. This definition is so widely framed that it can include an extensive range of complaints. It is well established that stress can cause both physical injury, in the form of conditions such as repetitive strain injury (RSI), work-related upper-limb disorder (WRULD) and reflex sympathetic dystrophy (RSD), and psychiatric injury. In addition, a number of other issues must be carefully considered in the context of work-related stress, such as bullying, harassment, discrimination, working conditions, working environment and the nature of the work carried out.
With health and safety failures costing UK business £18 billion per annum, according to recent Government figures, the absenteeism, low morale and poor performance which stress causes can place a heavy financial burden on employers. In addition, the legal consequences of non-compliance by an employer with his duties represent a potent cocktail of potential litigation, including:
- Employment Tribunal claims for unfair and/or constructive dismissal, breach of contract and claims under legislation such as the Disability Discrimination Act 1995 and the Employment Rights Act 1996.
- Criminal liability under the Health and Safety at Work Act 1974 (HSWA) and related Regulations.
- Improvement/Prohibition Notices served by HSE inspectors.
- Civil liability for breach of common law and statutory duties.
What Are the Duties
All employers are duty holders and the duties in respect of stress are general in nature and far reaching in their legal consequences. Employers have a general duty of care at common law to take reasonable steps to ensure the health and safety of employees. This is also an implied term in the contract of employment and can often be an express term where employers have a health and safety statement or policy which forms part of the contract of employment.
In addition, employers have a general duty under HSWA to ensure the health, safety and welfare of all employees and to conduct their undertaking in such a way as to ensure that all other persons are not exposed to risks to their health and safety. These general duties are not absolute, but are qualified by the words “so far as reasonably practicable” and attract criminal liability only. In addition to the general duties, there are a number of specific statutory duties on employers to be found in the myriad of health and safety Regulations, many of which impose absolute duties and some of which attract both criminal and civil liability.
The Employment Law Implications
Employees who suffer from work related stress and are either subjected to any detriment or are dismissed can claim in the Employment Tribunals for constructive dismissal, unfair dismissal or breach of contract – eg Hetherington v Darlington Borough Council 1 where a teacher was awarded compensation when he was unfairly dismissed while on sick leave to recover from stress which arose as a result of bullying. The current compensation limits are £51,700 for the compensatory award, £7200 for the basic award and £25,000 for breach of contract.
In addition, recent legislation has considerably extended the protection which employees and other workers have in relation to health and safety issues, including stress, in the workplace. The Employment Rights Act 1996 extends protection to safety representatives and certain employees who suffer detriment or who are dismissed for “health and safety reasons”. Dismissals in such cases are automatically unfair. No qualifying service is required and there is no limit on the compensatory award.
The relevant provisions are set out in section 44(1) protection where an employee is subject to a detriment and section 100(1) which provides that employees are protected where the reason for their dismissal was that they:
- were designated by an employer to carry out activities in connection with the prevention or reduction of risks to health and safety at work and they carried out those activities or
- they were safety representatives or members of safety committees and they performed any relevant function or they took part in consultation with the employer.
Although it may seem obvious that employees in such positions should be fully protected from detriment or dismissal, there have been some flagrant cases such as Sears v RS Cockerill (Farms) Ltd2 where a health and safety representative was dismissed for “continual pestering” and this was unsurprisingly found to be automatically unfair under section 100 (1).
Section 100 (1) also protects employees in situations where either there are no safety representatives/committee or where there are such representatives/committee but it is not reasonably practicable to raise the matter by those means, and they bring to their employer’s attention, by reasonable means, circumstances connected with their work which they believe are harmful to health or safety. Employees are also protected where they, in circumstances of danger which they reasonably believe are serious and imminent and which they could not reasonably be expected to avert, leave or (while the danger persisted) refuse to return to their place of work or where they, in circumstances that they reasonably believe to be serious and imminent, take appropriate steps to protect themselves or other employees from the danger.
Stress which leads to a physical or mental impairment which has substantial and long term adverse effects on a person’s ability to carry out normal day-to-day activities can amount to a disability under the Disability Discrimination Act 1995 and could lead to a discrimination claim under the Act - see Kapadia v London Borough of Lambeth3. Where an employee is disabled under the Act, employers must not subject such an employee to less favourable treatment on account of his disability. The Act includes a particular duty under section 6 for employers to make reasonable adjustments to the disabled employee’s workplace or work arrangements, if existing arrangements place that employee at a disadvantage or hinder him from carrying out his work. There is no qualifying period for such claims and no compensatory limit. In addition, the case of Sheriff v Klyne Tugs4 has confirmed that it is also competent to seek damages for psychological injuries sustained as a result of discrimination.
Stress can often arise as a result of working long hours. Under the Working Time Regulations 1998, workers are entitled not to be required to work more than 48 hours in each working week, averaged over a 17 week period. The regulations also provide for daily rest periods, weekly rest periods, rest breaks, compensatory rest, entitlement to annual leave and payment in respect of leave. A complaint may be brought by an employee if he is subjected to any detriment or is unfairly dismissed for exercising or attempting to exercise his or her rights under these Regulations.
The Public Interest Disclosure Act 1998 protects workers who are subjected to detriment or unfairly dismissed on the ground that they have made certain types of disclosure, as defined in the Act. In order to qualify for protection, a disclosure must fall within one of the 6 defined categories which include “any disclosure which in the reasonable belief of the person making it tends to show…that the health and safety of an individual is endangered”. The disclosure must also be made to one of 6 defined categories of persons, including employers and other bodies such as the HSE. Again there is no qualifying period and compensation is unlimited. Although it did not relate to a stress complaint, the case of Fernandes v Netcom Consultants5 demonstrates the potential consequence of a claim under PIDA. In that case Mr Fernandes was awarded compensation of £293,000 after he was dismissed for “blowing the whistle” on his colleague.
Employers who fail to comply with their duties under HSWA and related Regulations can be prosecuted in the criminal courts. Although none of the duties contained in such legislation specifically refer to stress, when the HSE recently decided not to introduce an Approved Code of Practice (ACOP) for stress, they made it clear that their view is that criminal liability for stress is already covered by the generality of existing legislation.
In addition to the prosecution of bodies corporate, where an offence is committed with the consent or connivance of or is attributable to the neglect on the part of any director, manager, secretary or other similar officer such person can also be prosecuted under section 37 of HSWA. Until recently, it was relatively uncommon for such individuals to be prosecuted. However, the HSE have issued a “Revised Enforcement Policy Statement” and the aim is to increase the number of prosecutions and the number of directors and senior officers prosecuted. The new version states that “authorities will actively consider the management chain and the role played by individual directors and managers and will take action against them where it can be shown that the offence was committed with their consent or connivance or to have been attributable to neglect on their part. Where appropriate authorities should seek disqualification of directors under the Company Directors Disqualification Act 1986.”
The Management of Health and Safety at Work Regulations 1999 (and ACOP) impose a duty on employers to ensure that a “competent person” conducts a “suitable and sufficient” risk assessment of the workplace risks to the health and safety of both employees and non employees. In respect of stress, such assessments are essential, particularly in an environment where there is a known risk of stress or where a particular employee has been known to suffer from stress in the past. Failure to comply with these regulations can lead to a criminal prosecution. Although the regulations do not attract civil liability (with the exception of risk assessments for pregnant workers and young persons), nevertheless a failure to conduct such an assessment in respect of stress can be powerful evidence when assessing the extent to which the duty of care was complied with in any civil claim.
The maximum criminal penalties at present in the Sheriff Court (summary jurisdiction) are £5000 for breaches of the Regulations, £20,000 for breaches of the general duties under the HSWA and £20,000 or six months’ imprisonment or both for failure to comply with an improvement or prohibition notice or court remedy order. In the Sheriff Court (solemn procedure) and High Court, unlimited fines can be imposed for breaches of the Regulations and general duties, unlimited fines or two years’ imprisonment or both for failure to comply with an improvement or prohibition notice or court remedy order or for contravening licence requirements or provisions relating to explosives.
The Government has made it clear that it considers that these maximum penalties are too low and that it intends to change the law to increase the maximum fines in the lower courts and to make imprisonment a possible sentence for almost all health and safety offences. These proposals are likely to become law during the next Parliament.
An alternative to criminal prosecution is for the HSE inspectors to serve an improvement or prohibition notice under sections 21 and 22 of HSWA. As prohibition notices can only be served where there is a risk of serious personal injury, it is highly unlikely that this formidable method of enforcement would be used in stress cases. However, there is no reason why an inspector could not serve an improvement notice where he is of the view that an employer is contravening a statutory provision relating to stress. Employers can lodge an appeal against the service of such notices to an Employment Tribunal, provided that it is lodged within 21 days of the date of service of the notice.
Civil liability can arise where there has been a breach of common law and/or statutory duties. Physical injuries resulting from stress are clearly actionable - eg Conaty v Barclay’s Bank PLC6 where £240,000 was awarded for a WRULD claim based upon both common law duties and the statutory duties contained in the Health and Safety (Display Screen Equipment) Regulations 1992 and the Workplace (Health, Safety and Welfare) Regulations 1992.
The case of Walker v Northumberland CC7 established that the duty of care owed by employers to employees extends to psychiatric as well as physical injury and that work-related stress can result from either the character of the work carried out or the volume of work. However in Rorrison v West Lothian College and Lothian Regional Council8 the Court of Session held that there is no general duty to safeguard employees against psychiatric injury and that the duty only arises where it is reasonably foreseeable to an ordinary bystander that emotions such as stress or anxiety are liable to be suffered to such a degree as to constitute a psychiatric disorder. The Court distinguished between emotional distress and psychiatric illness and made it clear that employees must have a recognised psychiatric illness in order to be able to claim damages.
Causation and forseeability are key tests to be considered in such cases, as evidenced by the case of Levy v Allied Dunbar Assurance PLC9 where the High Court in England rejected a claim for stress where the plaintiff had failed to disclose a history of mental health problems to his employer and therefore failed to show that it was reasonably foreseeable that his employer’s conduct might injure his physical or mental health – see also Fraser v the State Hospitals Board for Scotland10
Where stress claims are successful, the damages can be considerable, as can be seen from recent awards such as the £250,000 settlement for a stressed teacher11 and £203,000 for a stressed council warden12
Stress is a serious workplace issue which has profound legal consequences for employers. The current trends of higher damages awards, more criminal prosecutions, more individual prosecutions of directors and managers, higher fines, more Employment Tribunal claims, coupled with increasing awareness among employees of workplace rights mean that employers who fail to comply with their legal duties in respect of stress do so at their peril.
David Leckie and Jennifer McWilliams can be contacted at Mackay Simon, the employment law division of Maclay Murray & Spens firstname.lastname@example.org.