Why tackle stress?

Apart from duty-of-care considerations there are a host of reasons why employers should take steps to tackle stress

Leaving stress unchecked can escalate costs for an organisation. Not only will it have implications for productivity, attendance and staff turnover but, if allowed to run rampant, it can also result in legal action, with the potential for uncapped settlements and damage to the employer’s reputation.

The scale of the problem is demonstrated by the Health and Safety Executive’s (HSE) 2006/07 survey of Self-reported work-related illness, which revealed that 13.8 million working days were lost to self-reported work-related stress, depression and anxiety, and that each case of work-related stress, depression or anxiety-related ill health led to an average of 30.2 working days lost. In addition, the HSE estimated that the cost to the economy of these lost days was more than £530m.

As well as the absence-related costs, there can also be costs to the employer when an employee is stressed but in the workplace. Eugene Farrell, business manager at Axa Icas, explains: “Stress can lead to an employee making more mistakes or to presenteeism, where they’re in work but not fully engaged and functioning.”

Employers with high levels of employee stress are also likely to see higher levels of staff turnover. This can be expensive, with recruitment and training costs coming into play.

It’s not only the employee suffering from stress that is affected either. Justin Crossland, head of healthcare and risk at Towers Perrin, says: “In many organisations, if someone goes off with stress their colleagues will have to pick up their workload. This can cause them to feel under pressure too and the problem can grow.”

Pressure may also be felt by employees working alongside a member of staff suffering from stress or as a result of the change that would occur if that individual leaves and a new person is recruited. Again, this is likely to affect morale, causing more absence and increasing employee turnover.

It therefore makes good business sense to keep a check on employees’ stress levels. However, it is also something that should be done from a legal perspective too. “Employers have a responsibility to look after the health and safety of their employees and this includes safeguarding them from excessive stress,” says Crossland.

The Health and Safety at Work Act 1974 states that employers must take measures to control any risk while the Management of Health and Safety at Work Regulations 1999 require organisations to carry out an assessment of the risks to the health and safety of staff to which they are exposed at work.

Failure to take these steps and address any other legal obligations can be extremely expensive. Andrew Knorpel, partner with ASB Law, says: “Awards are uncapped if the employer is found liable under common law. It is fair for an employer to assume an employee is up to the job but if they are aware of a problem or take no action to prevent employees suffering stress then they could find themselves in court.”


Stress and the courts

Six-figure settlements are common when judges find in the favour of a claimant suffering from work-related stress. The first major case around stress was that of Walker v Northumberland County Council in 1995. In this, social worker John Walker had warned his employer Northumberland County Council that he was feeling stressed due to an increase in workload. The council made no changes and Walker suffered a nervous breakdown.

On his return to work, the workload was still too great and he suffered a second breakdown and had to retire.

The court ruled that the council should have taken more steps to protect Walker on his return to work and by not doing so was in breach of its duty of care. It awarded Walker damages of £175,000. Since this case, the courts have made many more large awards to claimants suffering from stress. These have included the case of Lancaster v Birmingham City Council, where the claimant was awarded £67,000, and Barber v Somerset County Council, where the award was more than £100,000. But there could be a multitude of even larger figures, kept secret because of out-of-court settlements.


Statistics on stress

• Non-work-related stress, anxiety and depression was the most significant cause of long-term absence among non-manual employees and the second most significant among manual employees.CBI/Axa Absence and labour turnover 2008 survey

• After minor illness, non-work-related stress is the second most significant cause of short-term absence for non-manual employees.CBI/Axa Absence and labour turnover 2008 survey

• 40% of organisations saw an increase in stress-related absence in 2006 with public sector and non-profit organisations reporting the highest increase (54%).

CIPD Absence Management survey 2007

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