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Stress at Work - The Legal Implications: by Peter Matthews.

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PREFACE

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 national survey into stress at work, originally launched in 1997 by the University of Bristol on behalf of the Health & Safety Executive, reveal that every day of the week 270,000 people are absent from work with a stress-related illness.

In an earlier report, 'Stress at Work: a Guide for Employers', published in 1995, the Health & Safety Executive 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 recent discussion document, 'Managing Stress at Work', published in 1999, there is a strong indication that, if such advice is not followed by employers on a voluntary basis, then the Health & Safety Executive may introduce a statutory 'Approved Code of Practice' which would make employers liable to a criminal prosecution.

The case of Walker v Northumberland County Council in 1995, 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 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.

PREAMBLE

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 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

At statute law, 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).

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. 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. 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".

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 the working environment, and that the employer should reasonably have foreseen that such injury would be caused. If the complainant is successful in his civil action he may be awarded damages of up to £50,000 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 in the judgement 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 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 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 the case of Benson v Wirral Metropolitan Borough Council, however, no liability was admitted, but the teacher concerned received the sum of £47,000 in an out of court settlement. 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, while in the case of McLeod v Test Valley Borough Council, the case was settled out of court, with no liability admitted, for £200,000.

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. 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, i.e. 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, i.e. 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 Gulleyes.

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 yet to be fully decided 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:

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

CONCLUSIONS

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 a precedent has been 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. In future, the decision in Walker v Northumberland County Council may make 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. It may be that, as more of these types of cases are heard, the courts will begin to exact a higher duty of care than was expected of Northumberland County Council in this case.

Employers, therefore, 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 stress audits 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 had been taken to reduce the burden on the employee, as in Firman v British Telecom plc, and/or the employer 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 damages being sought against them by their employees.

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, stress management programmes have the potential to promote an employee's positive contribution and wellness 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 stress management programmes 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.

Peter Matthews ©

BIBLIOGRAPHY AND REFERENCES

    1. LEGISLATION (STATUTES & STATUTORY INSTRUMENTS)
  • Employers Liability (Compulsory Insurance) Act 1969
  • Health & Safety at Work Act 1974
  • Sex Discrimination Act 1975
  • Race Relations Act 1976
  • Employment Protection (Consolidation) Act 1978
  • Management of Health & Safety at Work Regulations 1992
  • Disability Discrimination Act 1995
  • Employment Rights Act 1996
  • National Minimum Wage Act 1998
  • Working Time Regulations 1998
      2. COMMON LAW (CASES)
  • Benson v Wirral Metropolitan Borough Council
  • Health & Safety Executive v Firth Furnishings Ltd
  • Firman v British Telecom plc
  • 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
  • Petch v HM Customs & Excise Commissioners
  • Polkey v A E Dayton Services Ltd
  • Walker v Northumberland County Council
  • Ward v Signs by Morrell Ltd
  • Western Excavating v Sharp
  • Whitbread plc v Gulleyes
  • Wilsons & Clyde Coal Company Ltd v English
      3. BOOKS & PAMPHLETS
  • Earnshaw, J and Cooper, C (1996), Stress and Employer Liability. Institute of Personnel and Development. (ISBN 0 85292 615 4).
  • Napier, M and Wheat, K (1995), Recovering Damages for Psychiatric Injury. Blackstone. (ISBN 1 85431 352 5).
  • Health & Safety Executive (1995), Stress at Work: a Guide for Employers. HSE. (ISBN 0 7176 0733 X).
  • Health & Safety Executive (1996), Mental Health and Stress in the Workplace: a Guide for Employers. HSE. (ISBN 0 11 321893 1).
  • Health & Safety Executive (1998), Help On Work-Related Stress: a Short Guide. HSE.
  • Health & Safety Executive (1998), An Assessment of Employee Assistance and Workplace Counselling Programmes in British Organisations. HMSO. (ISBN 0-7176-1519-7).
  • Health & Safety Executive (1999), Managing Stress at Work. HSE. (Discussion Document DDE10)
  • Income Data Services (1995), Stress at Work. IDS Brief 554. (December 1995)
  • Income Data Services (1998), Stress and Depression. IDS Brief 621. (September 1998).
  • Trades Union Congress (1998), Trade Union Trends: Focus on Union Legal Services. TUC. (ISBN 850006 447 4).