Forget broken legs, worry about shattered minds

Work-related stress claims are becoming expensive for employers, writes Ian Hunter

Beverley Lancaster's damages award of pounds 67,000 earlier this month against Birmingham city council is further proof that work-related stress is becoming a serious and expensive problem for employers.

The former housing officer was awarded the compensation for stress caused by a job transfer. Recent estimates put the cost to British industry of days lost through stress at pounds 6.4bn. One in five employees admits to taking time off because of stress, according to the Health and Safety Executive. The HSE also estimates that 60 per cent of work absence is caused by stress- related illness.

When most people think about injury at work they conjure up a picture of a shattered leg or scarred face. In fact, in order to succeed with a claim for stress-related injury, employees must leap the same hurdles as in any other personal injury case. They must establish that the employer had a duty of care which was broken; that the injury caused was as a result of the employer's breach and that, in the circumstances, the injury was reasonably foreseeable.

It was in the ground-breaking case involving a social worker, John Walker, several years ago, that it was established that the employer's duty to provide a safe place of work extends not only to physical but to mental injuries as well. The success or failure of stress-related claims will usually revolve around two points. First, was the risk of a stress-related illness reasonably foreseeable? And second, was the injury caused as a result of the employer's actions?

On the issue of whether the injury was reasonably foreseeable, in the case involving the social worker, much was made of the fact that he suffered not one, but two breakdowns. It was only after the first breakdown that it was established that it was reasonably foreseeable that an excessive workload would expose Mr Walker to the risk of injury. Since this case, the HSE has published guidelines to deal with stress at work.

In addition, working time regulations have now been implemented which regulate working hours and rest period entitlements not just for employees, but for broader categories of "worker". These changes, together with growing awareness of research into stress-related injuries, are likely to make it harder for employers in the future to argue that they cannot reasonably be expected to foresee health risks to employees who are exposed to long hours and tight deadlines.

Employers will have to take more seriously complaints from employees who feel unable to cope with their workload . However, even if it becomes easier to show that the injury was foreseeable, proving that it was caused by work-related stress remains problematic.

Stress-related illness is often a result of a combination of problems, some of which may not be work-related, such as relationship difficulties or a bereavement. In such cases the employer will argue that he was not the cause of the resulting stress induced illness. However, the potential problems faced by employers have been aggravated since the Disability Discrimination Act 1995 came into force.

The Act provides wider protection for employees because it addresses a variety of health problems. For example, employees who can establish that they are "disabled" for the purposes of that act could be afforded protection against dismissal even if their stress-related depression "disability" is the result of factors entirely unconnected with their work. The problem for employees bringing such claims is convincing an employment tribunal that their stress-related illness amounts to a"disability".

The disability must have a substantial long-term adverse impact on the individual's day-to-day activities. However, employment tribunals are now experiencing a steady flow of such claims and the likelihood is that employers will be exposed to an increase in such claims in the future. Claims in respect of disability discrimination must be submitted to an employment tribunal within three months of the alleged act of discrimination.

Importantly for employers, the tribunals' power to award compensation is not subject to a cap. The Institute of Personnel and Development has, produced an action plan for employers.The IPD says: "The management of stress and employee mental health has become more important as organisations become leaner and more flexible and step up the pressure to remain competitive".

Ian Hunter is a partner and employment law specialist at City law firm Bird & Bird and is the author of the 'Which? Guide to Employment'.