'Stress in the city' is about to spiral out of control, finds HSE

Susan Hogg , 21 May 2012


Following publication by the HSE of its latest statistics on occupational stress, there has been a plethora of articles quoting the figure of 18,000 stress related claims in the banking and finance sector for 2010/2011. Speculation has been rife that "stress in the city" is about to spiral out of control and generate a high volume of potentially high cost and high profile employment and personal injury claims.

Overall, according to the HSE, the number of claims for work related stress are slightly reducing. One would think that working in an office environment is low risk, but a survey released by the Chartered Institute of Personal and Development last year revealed that the proportion of organisations reporting stress as the most common cause of absence for non manual workers has risen from 24% in 2010 to 32% in 2011. Indeed, in relation to claims for disability benefits, mental health (depression and anxiety) form the largest proportion of claims, having overtaken claims for musculo skeletal problems. Whether these statistics will be followed by a sudden surge in claims in the law courts has been the subject of some debate.

Work related stress is defined as "a harmful reaction people have to undue pressure and demands placed on them at work". The HSE developed a series of management standards for tackling stress to help employers identify the primary sources of stress within their organisation. It categorises these "stresses" into six key areas:

  • Demands (workloads, work patterns, work environment);
  • How much input and control someone has over their work;
  • The amount of support they receive;
  • Their relationship at work;
  • Their role; and
  • How change is made within the business.

It is recommended that an organisation measures how it performs against these standards so that strategies can then be put in place to reduce stress. The key to successful stress management is to have clearly defined policies in place. HR play a vital role here as they are in a prime position to monitor an organisation's overall portfolio of policies and practices to ensure that all policy areas are adequately covered.

Claims are normally rigorously defended. Claims for breach of contract and negligence require the claimant to prove he or she has suffered a recognisable psychiatric injury (stress alone will not suffice) which was caused by the workplace and which was reasonably foreseeable as a result of any breach of duty. Lady Hale's 16 Practical Propositions, as set out in the judgment that went under the collective title of "Hatton v Sutherland" in 2002, have caused the number of successful stress cases since that time to be greatly reduced. Lady Hale's guidelines resulted in the issues of foreseeability and causation becoming significant hurdles for the claimant to surmount. However, subsequent cases such as Dickens v 02 [2008] EWCA Civ 1144 have arguably lowered some of the hurdles and, in particular, place a duty on employers to use some "managerial intervention" and do more than simply refer their employees to a helpline when notified of the employee suffering from severe stress.

Bullying is another problem for an employer to keep in check. Since 2006, an employer has become vicariously liable for the acts of its employees to other members of staff, and if those acts form a course of conduct which the employee knew, or reasonably ought to have known, would cause harm, then it may be liable under the Protection from Harassment Act 1997 ("PHA"). Under this act, a claimant only has to prove hurt feelings and anxiety (as opposed to psychiatric injury) and recent case law also removes foreseeability from the equation: if the claimant can prove deliberate conduct which the defendant knows or ought to have known will amount to harassment, then in those circumstances, an employer will be liable in damages for the injury and loss that flow from that conduct (Jones v Ruth (2011)).

The PHA 1997 is also likely to be used in future in connection with "cyber bullying". This does not just relate to internal emails, for example, but with the growth of social media such as Facebook, Twitter and LinkedIn, there are issues which could affect clients as well as employees. A clear social media policy is one of the measures that can be introduced - a strategy aimed at minimising the risks associated with potential claims.

How these issues will affect the finance sector will depend upon an organisation having good stress management policies in place, and keeping them under review. Rising claims equate to rising insurance premiums, so it is critical to have a pro-active approach to managing what has been statistically shown to be an increased risk of claims arising.

Susan Hogg, solicitor in the insurance group at DLA Piper Sheffield

5 comments on this article

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Why I wrote an 8 minute solution!

Vanda North 21 May 2012

In 2006 I was making a world tour for CLSA and saw the levels of stress on the rise. It is not that people do not know what they SHOULD do, it is they do not have time. So I created a powerful 8-step / 8 minute stress reducing and resilience building process called Mind Chi. I have since taken this back to the financial sector and love opportunities to teach & share this.

Policies & interventions won't prevent stress

Lucy Whitehall 22 May 2012

Having a great stress polioy or putting an intervention in place will not solve stress in the workplace. An acceptance of bullying, long working hours and unrealistic expectations of staff are endemic of a poor culture where profits always come above people. Ironically there is a wealth of evidence to show that happy, healthy flourishing staff leads to higher performance levels and greater business productivity. Organisations need to put a robust health and wellbeing strategy in place which includes policies, management practice and interventions amongst other things. A long term investment in the value of human capital in every sector not only financial, is needed to address this issue.

Too little, too late, Mr Manager

Windsor Gardener 23 May 2012

One would think working in an office is low occupational health and safety risk. I though so too until working with a manager who is an organizational psychopath. The psych profile fits to the very point when the workplace bullying of a co-worker to their breaking point achieves the bully's goal of winning at all costs. The managerial response was even more interesting to consider. The management thought the victims were a bunch of distraught individuals who had conjured up imaginary complaints and illnesses. It was not until the union representative exposed the extent of the complaints that some positive action was taken. Only much later was there a serious attempt to find an effective solution that would have helped the workers with their problems in the early stages. When an employee comes to you with a complaint do not avoid your responsibility for addressing and effectively remedying the work environment. You expose the organization to costs for legal claims inside the work injury and civil systems and most importantly let the very people you proclaim to value to suffer unnecessarily.

Not just the UK

Darren Toms 24 May 2012

I see this all over the world. I am lucky enough to be engaged by companies who see the importance of creating powerful working environments. I run leadership programmes globally (currently in Kuala Lumpur) but am based in the UK. I spent 18 years at JPMorgan before setting up my own successful coaching business. There are two schools of thought, firstly for stress to happen then someone must have had a thought about the events. (It is not the vents that shape us, it is our thoughts about the events) BUT equally if the environment is TOXIC it is harder to stay resilient and fight against the impact of negative environments. My whole business is geared towards working with office based staff who have to deliver business results under pressure but also ensure the leadership team KNOW HOW to create the right environment. The pressure to deliver business results can often lead to AVERAGE performance and this in turn drives low morale and a toxic environment. Peak performing leaders understand that this is OLD WORLD way of doing business and they seek to change. There are a few great companies out there who see this and take action, unfortunately there are many more who just focus on getting the tasks done rather than managing PEOPLE to get the tasks done. BTW, Vanda North book (see comment above) is very good and can change life in just 8 minutes.

The three antidotes to City Stress

Deborah Henley 29 Oct 2012

Accenture's 2012 research on employee engagement found 32% of corporate employees surveyed about their work situation to describe selves as depressed or very depressed about it. Work-place stress and depression are closely linked. This invidious problem will not be solved by management techniques alone but a philosophical cultural shift. In my spoof keynote: 'How to create unhappiness in the workplace' I identify the three must-haves to continue this sorry state of affairs: 1. De-motivation and disengagement 2. Remove Meaning and Purpose 3. Create Work-Life balance The third may seem a little startling at first site but it is about creating a working-lifestyle that suits the individual not a separation of the two. At Vivacity we aim to 'bring life to work and work to life' through seminars and workshops - we're based in London. Do call if you'd like me to speak or further info. Deborah

In this issue: September 2015
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Shared value: Why the investment community is getting interested in human capital

Continuous improvement: Re-engineering HR at IMI

Out and proud: John Browne on inclusive workplaces

Retirement planning: Shake up your pensions strategy

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