Legal Q&A: Liability for employee stress

The disturbing findings of research by the Work Life Balance Centre – that nearly half of the workers in its survey claimed to suffer depression and 43% suffered panic or anxiety attacks due to stress – highlight the problem faced by many of the UK’s workforce.

Recent cases suggest claims arising from stress will continue to trouble employers.

Q What are these recent cases?

A In Hiles v South Gloucestershire NHS Primary Care Trust, a health visitor relied on incidents when she exhibited signs of distress as evidence of foreseeability and recovered £61,712.

In Intel Corporation UK Ltd v Tracy Ann Daw, Ms Daw suffered a psychiatric breakdown caused by overwork. The court found Intel should have taken immediate action, and dismissed the argument that provision of a counselling service to Daw was sufficient to discharge its duty towards her.

In the case of Lois Angela Sayers v Cambridgeshire County Council, the court was not convinced by the claimant’s arguments that her employer should have foreseen her ill-health and had not done enough to combat it. The claimant deliberately avoided disclosing that her limited absences were caused by psychiatric ill-health. General awareness of the possibility of psychiatric ill‑health occurring was not enough to fix this particular employer with notice. The court also found that the employer had done all that was reasonable.

Reported cases are only the tip of the iceberg as many claims are settled through negotiation or abandoned before trial.

Q What lessons should employers learn from these cases?

A Even if impending ill-health is foreseeable, employers will not necessarily always be at fault, if an employee goes on to become ill. Employers need only take such steps as are reasonable to safeguard the health, safety and welfare of employees and when doing so are entitled to take into account the needs of the organisation which will, of course, include the needs of other employees.

General knowledge of ‘stress’ is unlikely to be enough to fix an employer with foreseeability of harm, but if there is a foreseeable risk of harm, act immediately. Managers know what is going on ‘on the ground’. Their evidence can make or break a case. The provision of a counselling service alone, without dealing with underlying causes of stress, is not a panacea and, as such, did not present to employers a defence to claims of this type.

Q Has the legal position changed?

A No. As with other injury claims, a claimant alleging damage caused by stress at work must prove foreseeability of harm, fault and loss and damage. The landmark case of Hatton v Sutherland is still the cornerstone of the law in this area.

Q What are claimants awarded?

A Awards are made up of an element for injury plus financial losses, which are uncapped, unlike some employment tribunal awards. A high-earning professional, unable to ever return to work, could have a claim worth £2m. In practice, values are likely to be lower, perhaps due to pre-existing ill-health which might have led to a breakdown or the need to leave work in any event.

Q Should we conduct stress audits?

A Regular stress audits can be useful monitoring tools. The Management of Health and Safety at Work Regulations 1999 require employers to make risk assessments. In addition, employers are required to have health and safety policies. These clearly should include stress and its likely consequences.

Q Can employees who suffer from stress bring claims under the Disability Discrimination Act?

A Yes. To bring a claim, an employee first needs to show that they are ‘disabled’. Disability is defined as “a physical or mental impairment which has a substantial and long-term adverse effect on his ability to carry out normal day-to-day activities”. The Act originally stated that a mental illness would only be a disability if it was a “clinically well-recognised illness”. However, this condition was removed by the Disability Discrimination Act 2005. This has widened the scope of employees who can gain protection under the Act.

Employers should be aware that there is no cap on the amount of compensation an employee can recover. Compensation can include an award for injury to feelings and for personal injury damages.

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