Increase in work-related stress due to the downturn: what does this mean for employers?

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A recent CIPD survey revealed 49% of those surveyed reported noticing an increase in stress as a result of the economic downturn.

There was a slight increase in the number of individuals who felt less secure in their jobs. Given the current pace of economic recovery is modest and business investment restrained, with job cuts in the public sector inevitable, an increase in stress related litigation concomitant with the increasing stress is likely. With appropriate policies in place, an employer can reduce significantly the likelihood of being found liable.

An employer will be liable for damages in common law where it negligently exposes an employee to occupational stress that is causative of a clinically recognised illness. An employee who resigns as a result of work-related stress may have good grounds for a constructive dismissal claim where the cause of the stress constitutes a breach of contract. Further, stress-related illness can constitute a disability for the purposes of the Disability Discrimination Act, requiring the employer to make reasonable adjustments as well as giving rise to a potential discrimination claim. 

Stress-inducing factors become more prevalent during a recession. Increased or unreasonable demands by management as well as excessive workloads or work hours will cause stress. Greater pressure on employees may result from a decrease in staff numbers that is not commensurate with a decrease in work, or an increase in work without an expansion of the workforce.

Employers are entitled to assume, in the absence of evidence to the contrary, that their employees can withstand a certain degree of stress resulting from the normal pressures of the job. Even employees perceived to be robust will have a breaking point such that, for instance, requiring them to work 90 hours every week could have a deleterious effect on their health. Courts and tribunals will expect employers to be aware of the risks of and associated with occupational stress and to be proactive in reducing the risks. A reasonable employer should be familiar with the HSE and the ACAS recommended guidance on stress.

An employer is most vulnerable to a claim where they know or should know that a particular employee is vulnerable to, or is experiencing, stress. Any complaint of stress ought to be investigated immediately with a view to taking steps to reduce stress exposure. A useful first step will be a medical or occupational health assessment with a view to obtaining recommended steps to minimise any potential harm to an employee.

Even without a specific complaint there are certain signs that should put an employer on notice of harmful levels of stress in the workplace. A history of stress related or associated injury, such as depression, is likely to constitute a predisposition to similar injury. Where an employee starts to take frequent or prolonged absences, which are quite out of character, the employer should enquire why, it may be indicative of stress. Where there is a more general level of absenteeism within a particular job or department that is abnormal, that ought also to result in an enquiry.

A stress related injury may constitute a disability for the purposes of the Disability Discrimination Act if it is an impairment that has a substantial and long-term adverse effect on the employee’s ability to carry out day-to-day activities. Where an employer knows that an employee to be disabled, or would know had it carried out reasonable enquiries, it has a duty to make reasonable adjustments to the aspects of the work, (provision, criterion or practice) or feature of the workplace, that puts the employee at a substantial disadvantage compared with the non-disabled.

The steps that could constitute reasonable adjustments and those that will limit civil liability for stress-related personal injury will overlap. Those most appropriate will often be the result of an occupational health or independent medical assessment that cater to the circumstances of the individual case. 

They may include, where feasible, permitting a sabbatical and/or a staged return to work, a transfer to a different department, increased assistance, a redistribution of work or working from home. Of particular relevance in the present climate will be the need to modify the selection criteria in a redundancy situation. The availability of counselling and medical assistance will be of assistance in defending a civil claim but is not a complete answer, especially where the medical assistance does not alter the stress-inducing factor. The best means of limiting liability as a result of occupational stress is to ensure that signs or complaints of stress are investigated and met with a change to working practice where possible.

Craig Carr is a barrister at 7 Bedford Row

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