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STRESS AT WORK

Peter Matthews, M.A., M.Ed., M.Phil., LL.B., F.S.S.M.©

STRESS AT WORK: The Legal Implications.

“A healthy workplace will bring employers and employees improved productivity, lower rates of sickness absence and less illness”. (NHS White Paper).

PREAMBLE

The campaign ‘Our Healthier Nation’ conducted in the year 2000 by the United Kingdom Department of Health identified stress as the biggest cause of absence from work after muscular-skeletal disorders. This was confirmed by the Confederation of British Industry in its survey, ‘Focus on Absence’, again conducted in the year 2000, which identified stress as the second highest cause of absence from work. According to the CBI Survey, absence from work was now costing business and industry an average of £13 billion a year.

Only five years previously, according to the Health & Safety Executive in its report, ‘Mental Health and Stress in the Workplace: a Guide for Employers’, published in 1996, it was estimated that 360 million working days were lost annually in the United Kingdom at a cost of £8 billion, and that half of these absences were stress-related. More recently, the pilot results of a major research project into stress at work, originally launched in 1997 by the University of Bristol on behalf of the Health & Safety Executive, revealed that every day of the week 270,000 people were absent from work with a stress-related illness.

The final results of the research project, ‘The Scale of Occupational Stress: the Bristol Stress and Health at Work Study’, published in 2000, provided the clearest evidence possible of the link between work and stress. The Bristol Research Project involved a survey of 17,000 randomly selected people from the Bristol electoral register, with a follow up survey twelve months later, and a detailed investigation of a cohort from the original sample. The results revealed that approximately 20% of the sample reported that they had very high or extremely high levels of stress at work. This sample would equate to some five million people in the United Kingdom as a whole.

In an earlier report, ‘Stress at Work: a Guide for Employers’, published in 1995, the Health & Safety Executive had stated, “Following this guidance is not compulsory and you are free to take other action. But, if you do follow this guidance you will normally be doing enough to comply with the law”. Three years later, however, in ‘Help on Work-Related Stress; a Short Guide’, published in 1998, the Health & Safety Executive stated, “It is your duty in law to make sure that your employees are not made ill by their work. And stress can make your employees ill. Employers who do not take stress seriously leave themselves open to compensation claims from employees who have suffered ill health from work-related stress”.

Moreover, in a more recent document, ‘Managing Stress at Work’, published in 1999, there was a strong indication that, if such advice was not followed by employers on a voluntary basis, then the Health & Safety Executive would introduce a statutory Code of Practice, which would make employers liable to a criminal prosecution. In the meantime, however, the Health & Safety Executive began to develop a strategy to tackle stress at work by setting out agreed standards of good stress management practice. In a further Health & Safety Executive stress management guide, ‘Tackling Work-Related Stress: a manager’s guide to improving and maintaining employee health and well being’, published in 2001, it was stated that these standards would cover issues connected to demands, control, support, roles, relationships and change. In 2003, the Health and Safety Executive did issue its ‘Management Standards on Work Related Stress’, together with a draft stress management policy.

The case of Walker v Northumberland County Council in 1994, the first case in legal history where an employee was awarded damages for psychiatric injury suffered a result of work related stress, brought home to employers the possibility of a civil action in the courts against them by their employees. This case, as will be seen below, emphasised the need for employers to conduct a risk assessment of the level of stress in their workplace and to have in place a stress management policy and a stress management programme. Such stress assessments, policies and programmes seek to examine the causes and symptoms of stress, and to provide ways of preventing and managing stress in the workplace, to the benefit of employer and employee alike. It is the aim of this paper to discuss the legal implications for employers of failing to prevent and manage stress in the workplace.

LEGAL FRAMEWORK

Although there is no specific legislation, no specific Act of Parliament, which controls stress in the workplace, the employment relationship, the relationship between an employer and an employee, is governed by law, both the law of contract and the law of tort. In the former an action may lie in breach of contract, in the latter an action in negligence. Thus, a contract of employment contains a range of express and implied terms, the latter implied both by common law and by statute. Of particular importance in a contract of employment, and an implied term, is the concept of the duty of care, a duty owed by an employer for the health, safety and welfare of his employees. Breaches of this duty of care may lead to a criminal prosecution in the criminal courts and/or a civil action in the civil courts and tribunals.

CRIMINAL COURTS

By statute, under the Health and Safety at Work Act 1974, “It shall be the duty of every employer to ensure, as far as is reasonably practicable, the health, safety and welfare at work of all his employees. The matters to which that duty extends include, in particular, the provision and maintenance of plant and systems of work that are, so far as is reasonably practicable, safe and without risks to health; the provision of such information, instruction, training and supervision as is necessary to ensure, so far as is reasonably practicable, the health and safety at work of his employees; the provision and maintenance of a working environment for his employees that is, so far as is reasonably practicable, safe, without risks to health, and adequate as regards facilities and arrangements for their welfare at work”. (HASWA 1974:s 2.1-2).

In addition, under the same Health and Safety at Work Act 1974, “It shall be the duty of every employer to prepare and as often as may be appropriate to revise a written statement of his general policy with respect to the health and safety at work of his employees and the organisation and arrangements for the time being in force for carrying out the policy, and to bring the statement and any revision of it to the attention of all his employees”. (HASWA 1974:s 2.3).

In 1993 a set of Regulations on health and safety at work came into force, of which the most important is the Management of Health and Safety at Work Regulations 1992 under which, “Every employer shall make a suitable and sufficient assessment of the risks to the health and safety of his employees to which they are exposed whilst they are at work for the purpose of identifying the measures he needs to take to comply with the requirements and prohibitions imposed on him by or under the relevant statutory provisions”. (MHSW Regulations. 1992:s 3).

Finally, in 1999, a new set of Regulations, the Management of Health and Safety at Work Regulations 1999, again obliged employers to carry out a risk assessment of health and safety issues which might affect their employees at work. These Regulations, which were derived from European Union Law, now included a duty to carry out a risk assessment in respect of health and safety arising from workplace stress. (MHSW Regulations, 1999/3242).

Breaches of health and safety legislation may lead to a criminal prosecution in the criminal courts, i.e. in the Magistrates Court or the Crown Court, with a penalty of a fine and/or imprisonment, as in Health & Safety Executive v Firth Furnishings Ltd. It should be noted, however, that such breaches of health and safety legislation may not give rise to a civil action by an individual employee in the civil courts.

CIVIL COURTS

At common law, it has long been established by precedent that an employer owes a duty of care to his individual employees while the latter are in the course of their employment. As stated in Wilsons & Clyde Coal Company Ltd v English, “The whole course of legal authority consistently recognises a duty which rests on the employer, and which is personal to the employer, to take reasonable care for the safety of his workmen”. Since the Employers` Liability (Compulsory Insurance) Act 1969, all employers have a legal duty to be insured against a possible claim for damages from their employees.

The personal nature of the duty of care means that the duty is owed to each employee individually, and not to the work force as a whole, and so in any civil action by an employee against his employer in the tort of negligence in the civil courts, i.e. the County Court and the High Court, the court will be entitled to look at the circumstances of the individual employee and what it was reasonable to expect of the employer in the particular case. As stated in Lochgelly Iron & Coal Company v McMullan, “In strict legal analysis negligence means more than heedless or careless conduct, whether in omission or commission: it properly connotes the complex concept of duty of care, breach of that duty of care and the injury suffered as a direct consequence by the person to whom the duty was owing”.

However, the burden of proof in a claim for negligence falls on the employee, i.e. the employee must prove that the employer was at fault. Thus, in essence, in a civil action in the courts for negligence an employee, as the complainant, must show that the employer, as the defendant, owed him a duty of care, that the employer was in breach of that duty of care, and that physical or psychiatric injury was suffered by the employee as a result. Of particular importance, however, in such an action for negligence is the legal concept of causation and foreseeability, i.e. it is for the complainant to prove that the injury suffered was actually caused by a failure of the duty of care, and that the employer should have reasonably foreseen that such injury would be caused. If the complainant is successful in his civil action he may be awarded damages of up to a certain limit in the County Court, and damages without limit in the High Court. In the case of Walker v Northumberland County Council, the complainant was awarded £200,000 in damages, subsequently reduced to £175,000 by agreement between the parties.

The importance of Walker v Northumberland County Council is that this is the first case in legal history where an employee was awarded damages for psychiatric injury suffered as a result of work-related stress. (In the earlier cases of Johnstone v Bloomsbury Health Authority and Petch v HM Customs & Excise Commissioners, the former had been settled out of court by the parties, the latter had been lost by the complainant). As stated by the High Court in Walker v Northumberland County Council, “Whereas the law on the extent of this duty has developed almost exclusively in cases involving physical injury to the employee as distinct from injury to his mental health, there is no logical reason why risk of psychiatric injury should be excluded from the scope of the duty of care”. Following the Walker v Northumberland County Council case, the House of Lords in Page v Smith stated that there was no justification in a case of negligence for treating physical and psychiatric injury as different kinds of injury.

Following the initial precedent set by the case of Walker v Northumberland County Council the number of stress related legal actions brought before the Civil Courts has increased year by year. According to the Trades Union Congress, in its ‘Focus on Union Legal Services’, published in 1998, there were 459 cases of work-related stress in progress in 1997 alone. In 1998 the figure had risen to 783. One case, in particular, against the North East Essex Mental Health Trust made further legal history when a widow received £25,000 in an out of court settlement, the first time that a widow had received damages for the suicide of her husband caused by stress at work. In 1999, in the case of Lancaster v Birmingham City Council, the complainant was awarded £67,000 in damages. In this case, in which the complainant was supported by the public sector Trade Union, UNISON, the employer actually admitted liability for the stress caused at work. In 2000, in the case of Ingram v Hereford and Worcester County Council, a Warden employed by the Council was awarded £203,000, a record amount for work related stress. In the case of McLeod v Test Valley Borough Council, the case was settled out of court, with no liability admitted, for £200,000. Later in the year, in North v Lloyds TSB, a financial adviser was awarded £100,000 in an out of court settlement.

It is perhaps in the teaching profession where cases of work related stress have attracted most attention. According to the National Union of Teachers in its pamphlet, ‘Tackling Stress; practical help and advice’, published in 2000, “Stress is one of the biggest problems facing teachers today. The increasingly demanding nature of our jobs has increased pressure levels dramatically. Research shows that teachers are now facing greater day-to-day problems with occupational stress than most other employees”. The effects of stress on the teaching profession has been confirmed by research carried out for the British Educational Research Association. (C M Hargate and A D Ogilvie (2003), ‘The role of school stress in the precipitation of severe mental breakdown in teachers’. BERA).

Among the causes of stress in the teaching profession are bullying, poor management, pupil indiscipline and workload, together with inspections by the Office for Standards in Education (OFSTED). Particular high profile cases have highlighted the problems of work related stress in the teaching profession. In the case of Benson v Wirral Metropolitan Borough Council and Mr A v Shropshire County Council the individual teachers concerned each received £47,000 and £300,000 respectively in out of court settlements. In 2000, in Howell v Newport County Borough Council, a teacher was awarded £254.000 in an out of court settlement, with the employer admitting liability. In 2001, in Barber v Somerset County Council, following a series of depressive illnesses, a teacher was forced to retire early on medical grounds because of stress, and was awarded the sum of £101,000 in compensation. However, as will be seen below, Barber v Somerset County Council was overturned by the Court of Appeal in Sutherland (Chairman of the Governors of St Thomas Becket RC High School) v Hatton and Other Cases.

According to Cosgrove in his book, ‘Breakdown: the facts about stress in teaching’, “Stress has become a commonplace of late twentieth century life, but there is no doubt that some professions are more affected than others”. While teaching is not the only profession to be feeling the effects of stress at work at the present time, the numbers involved have now become a matter of serious concern, so much so that a confidential telephone stress management service was established, ‘Teacherline’, now renamed ’Teacher Support Network’, supported by the Teachers’ Benevolent Fund and the Government. In its first two months of operation the new service received more than 2000 telephone calls and, according to the Teachers’ Benevolent Fund, about 200,000 teachers had complained of stress in the two years up until the year 2000.

EMPLOYMENT TRIBUNALS

An alternative course of action for an employee, rather than a civil action for breach of contract or negligence in the Civil Courts, is an action for unfair dismissal or discrimination before an Employment Tribunal. The jurisdiction of Employment Tribunals is based entirely on statute, in particular, the Employment Rights Act 1996, the Employment Relations Act 1999 and the Employment Act 2002. Under the Employment Rights Act 1996, “Every employee has the right not to be unfairly dismissed by the employer”. (ERA, 1996:s 94). However, to make an application for unfair dismissal to an Employment Tribunal, an employee must have had continuous employment with the same employer for at least one year prior to the effective date of termination of employment, and must have been dismissed. Dismissal may occur both at common law and by statute. However, common law only recognises one act which constitutes dismissal, the termination of the contract of employment by the employer with, or without, notice; while statute, the Employment Rights Act 1996, recognises two further acts which constitute dismissal, the non-renewal of a temporary contract, and so called constructive dismissal where, for example, an employee becomes so stressed by some aspect of their work or working environment that they feel obliged to resign, as in Whitbread plc v Gullyes.

Thus, under the Employment Rights Act 1996: “An employee shall be treated as dismissed by his employer if, and only if,

a) the contract under which he is employed is terminated by the employer, whether with or without notice; or

b) he is employed under a contract for a fixed term, that term expires without being renewed under the same contract; or

c) the employee terminates the contract under which he is employed, with or without notice, in circumstances in which he is entitled to terminate it without notice by reason of the employer’s conduct”. (ERA 1996:s 95).

It is the latter reason which is popularly termed constructive dismissal. However, in an action for constructive dismissal, as decided in Western Excavating v Sharp, it is for the employee to show that the employer has committed “a fundamental breach of the contract of employment which goes to the root of the contract”.

When a employee, who has sufficient continuity of employment, makes an application to an Employment Tribunal then, according to the Employment Rights Act 1996, “It is for the employer to show the reason for the dismissal; and that it is a reason which relates to capability or qualifications, conduct, redundancy, contravention of a statute or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held”. (ERA 1996:s 98.1-2). In particular, “Capability, in relation to an employee, means his capability assessed by reference to skill, aptitude, health or any other physical or mental quality”. (ERA 1996:s 98.3). It may thus include stress or a stress related illness.

Moreover, under the Employment Rights Act 1996, “The determination of the question whether the dismissal was fair or unfair, having regard to

the reason shown by the employer, depends on whether in the circum-stances, including the size and administrative resources of the employer’s undertaking, the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and that question shall be determined in accordance with equity and the substantial merits of the case”. (ERA 1996:s 98.4). This issue of substantive and procedural justice has been defined by the courts over the years, culminating in the case of Polkey v A E Dayton Services Ltd.

Other possible sources of action arising from employment legislation which may aid employees suffering stress at work, caused by discrimination, bullying, underpay and overwork are the Sex Discrimination Act 1975, the Race Relations Act 1976 and the Disability Discrimination Act 1995, and more recently the National Minimum Wage Act 1998 and the Working Time Regulations 1998. In cases of discrimination it is for the individual employee to bring an action for discrimination against the employer before an Employment Tribunal. Under the Disability Discrimination Act 1995, for example, “A person has a disability for the purposes of this Act if he has 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”. (DDA 1995:s 1). Whether such a definition would include stress, or a stress-related illness, has now been clarified by the courts and tribunals. In Ward v Signs by Morrel Ltd, one of the first cases in this area brought before an employment tribunal, the criteria laid down in the legislation which the applicant has to satisfy in order to succeed in an action for disability discrimination were highlighted, namely that:

the applicant must have a mental impairment, an impairment clinically well-recognised by a respected body of medical opinion;

b) the impairment must have adverse effects which are substantial;

c) the substantial effect must be long term; and

the long-term substantial effects must have an adverse effect on normal day-to-day activities.

More recently, in Rorrison v West Lothian Council and Lothian Regional Council, the Court of Session in Scotland decided that employees who suffer from stress-related illnesses as a result of their working environment are not entitled to compensation unless they have suffered psychiatric injury in the form of a recognised psychiatric illness, as defined in the American Psychiatric Association’s, ‘Diagnostic and Statistical Manual of Mental Disorders’, or the World Health Organisation’s, ‘International Classification of Diseases and Related Health Problems’. Mere psychological distress will not do. A similar judgement was given by the Court of Session in Fraser and State Hospitals Board for Scotland.

COURT OF APPEAL

Thus, in short, in the case of work-related stress, an employee has the option of suing his employer for breach of contract or negligence in the County Court or the High Court, or making an application for unfair dismissal or discrimination to an Employment Tribunal. In the case of negligence an initial precedent was set by Walker v Northumberland County Council. This case was due to be heard on appeal by the Court of Appeal in June 1996. However, the parties decided not to appeal, but rather to agree damages for the employee at £175,000, as mentioned above.

In the case of Walker v Northumberland County Council it was held that the risk of psychiatric injury to the employee only became reasonably foreseeable once the employee had already suffered one nervous breakdown. However, this should not be interpreted as meaning that an employer is entitled to wait until the employee has had a nervous breakdown or suffered some other stress-related condition before taking steps to reduce the pressure on the employee. Whether the risk of a stress-related injury is reasonably foreseeable will turn on the facts of each case. The decision in Walker v Northumberland County Council made it more difficult for employers to claim that they were unaware of the risks which pressure of work may pose to their employees' mental health. Thus, as more cases of stress-related psychiatric injury are heard, employers may have to do more to satisfy the courts that they have exercised their duty of care, more than was expected of Northumberland County Council in the Walker case.

However, in 2002, in Sutherland (Chairman of the Governors of St Thomas Becket RC High School) v Hatton and Other Cases, the Court of Appeal, considering four cases together, overturned three decisions and upheld one decision of the County Court that employers were liable in the tort of negligence for psychiatric injury suffered by employees. The Court of Appeal endorsed the view, first expressed in 2001, in Garratt v London Borough of Camden in 2001 that: “Many people suffer breakdowns and depressive illnesses, and a significant proportion would doubtless ascribe some at least of their problems to the strains and stresses of their work situation, be it simply overworking, the tension of difficult relationships, career prospects, fears or feelings of discrimination or harassment, to take just some examples. However, unless there was a real risk of breakdown which the claimant’s employers ought reasonably to have foreseen, and which they ought reasonably to have averted, there can be no liability”.

In essence, in Sutherland v Hatton, The Court of Appeal held that, in respect of three of the four employees in question, it had not been reasonably foreseeable that they would suffer psychiatric injury as a result of occupational stress and, accordingly, their employers had not been under a duty of care to take steps to prevent such injury. In particular, in this case, the Court of Appeal laid down clear guidance as to how the County Court and the High Court should deal with claims in negligence for psychiatric injury in future. (APPENDIX: Court of Appeal Guidance).

The Court of Appeal made two particular comments about the steps that an employer might be expected to take in dealing with potential psychiatric injury among employees. First, the Court of Appeal stated that an employer who had a stress management policy, and who offered a stress management programme was unlikely to be found in breach of the duty of care except where he has been placing unreasonable demands on an individual where the risk of psychiatric injury was clear. Second, the Court of Appeal stated that one step an employer was not obliged to take, even where that step would be the only reasonable and effective one available, was to demote or dismiss an employee in order to remove them from a stressful situation. In short, an employer would not be in breach of duty simply by allowing a willing employee to continue in their job.

The Court of Appeal continued that, even where an employer had breached the duty of care owed to an employee, and where the employee had suffered psychiatric injury, the employee in question still had to demonstrate that it was the employer’s breach of the duty of care which had caused their psychiatric injury. The Court of Appeal noted that, where the psychiatric injury had more than one cause, the employer should only pay for the proportion of the injury attributable to his breach. The Court of Appeal further noted that an assessment of damages should take account of any pre-existing disorder or vulnerability which the employee had, and the possibility that the employee would have suffered a psychiatric injury notwithstanding the employer's breach of the duty of care. The legal principles, as laid down in Sutherland v Hatton, were applied directly by the Court of Appeal in Pratley v Surrey County Council and Bosner v UK Coal Mining Ltd (formerly RJB Mining UK Ltd).

CONCLUSION

From the above legal analysis it is clear that an employer would be wise to give consideration to whether the work which their employees are undertaking carries a risk of stress-related injury by carrying out a risk assessment as part of their health and safety policy, or by conducting a stress audit among their staff. Such a risk of stress-related injury may be apparent from the volume or stressful nature of the work. Employers should certainly take note of any warning signs of breakdown in their employees, for example, higher than usual sickness absences. Where an employee actually tells the employer that he or she cannot cope, it may be hard for the employer to evade liability for any subsequent breakdown unless reasonable steps have been taken to reduce the burden on the employee, as in Firman v British Telecom plc, and/or the employer has established a stress management programme which the employee did not use, as in Petch v HM Customs & Excise. In short, to protect themselves from possible legal action, all employers would be well advised to have in place a stress management policy and a stress management programme to avoid the risk of an action in negligence being sought against them by their employees. As stated by Sutherland and Cooper, in ‘Strategic Stress Management: an organisational approach’, “Some companies have found that substantial (insurance) premium savings can be made if they demonstrate that risk is properly controlled by the implementation of a well managed and effective stress management programme”.

In a recent Research Report published by the Health & Safety Executive, ‘An Assessment of Employee Assistance and Workplace Counselling Programmes in British Organisations’, the researchers commented, “Occupational stress is a feature of the current economic climate and most people suffer from it at times and to different degrees. Occupational stress can seriously impair the quality of work life and reduce personal and job effectiveness. It can result from the job itself and from the context and arrangement of work but, equally, it can originate from outside factors such as personal or family life. Whatever the origins, there is no doubt that work can be stressful”. Thus, the report states, a stress management programme has the potential to promote an employee’s positive contribution and well-being at work and, as a consequence, to encourage organisational learning. In this respect, stress management programmes have some compatibility with corporate strategy, as well as the ability to become incorporated into the organisation’s attitudes, discourses and practices. A stress management programme can thus become part of a corporate culture, and make both a quantifiable and qualitative contribution to organisational effectiveness.

In particular, according to the Health & Safety Executive in its publication, ‘Stress at Work: a Guide for Employers`, published originally in 1995, the benefits of such a stress management programme include better health for their employees, reduced sickness absence, increased performance and output, better relationships with clients and colleagues, and lower staff turnover. As has been seen, a further major benefit would be the avoidance of litigation before the courts.

REFERENCES

LEGISLATION (STATUTES & STATUTORY INSTRUMENTS)

Employers Liability (Compulsory Insurance) Act 1969

Health & Safety at Work Act 1974

Sex Discrimination Act 1975

Race Relations Act 1976

Management of Health & Safety at Work Regulations 1992

Management of Health and Safety at Work Regulations 1999

Disability Discrimination Act 1995

Employment Rights Act 1996

Employment Relations Act 1999

National Minimum Wage Act 1998

Working Time Regulations 1998

Employment Act 2002

COMMON LAW (CASES)

Barber v Somerset County Council

Benson v Wirral Metropolitan Borough Council

Bosner v UK Coal Mining Ltd (formerly RJB Mining UK Ltd)


Health & Safety Executive v Firth Furnishings Ltd

Firman v British Telecom plc

Fraser v State Hospitals Board for Scotland

Garratt v London Borough of Camden

Howell v Newport County Borough Council

Ingram v Hereford and Worcester County Council

Johnstone v Bloomsbury Health Authority

Lancaster v Birmingham City Council

Lochgelly Iron & Coal Company v McMullan

McCleod v Test Valley Borough Council


North v Lloyds TSB

Petch v HM Customs & Excise Commissioners

Polkey v A E Dayton Services Ltd

Pratley v Surrey County Council, 2003 EWCA Civ 1067

Rorrison v West Lothian College and Lothian Regional Council

Sutherland (Chairman of the Governors of St Thomas Becket RC High School) v Hatton and Other Cases. Court of Appeal, 2002 IRLR 263

Walker v Northumberland County Council

Ward v Signs by Morrell Ltd

Western Excavating v Sharp

Whitbread plc v Gullyes, 1995 IRLR 509

Wilsons & Clyde Coal Company Ltd v English


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