Bob Mecrate-Butcher says employers should be aware that employees have a wide base from which to launch stress-related claims
The insurance industry is currently undergoing massive change as a result of numerous factors including the increased use of outsourcing and technology, an increasingly stringent regulatory environment and developments within the market such as increased incidence of affinity relationships and different ways of working between insurers and brokers.
Reorganisation and restructuring has been and is likely to remain prevalent within many insurers and the broker market is increasingly consolidating.
It is not surprising that people working in this difficult and competitive environ-ment may well feel under pressure, which necessarily raises the issue of stress.
But what is stress and why is it such an issue? It has been defined as “a psychological state resulting from a person’s perception of an imbalance between demands on the one hand and ability to cope on the other”.
What is clear, however, regardless of exactly how stress is defined, is that the incidence of stress in the workplace or at least recorded stress, has increased very significantly.
The most recent Health & Safety Executive (HSE) survey, published this month, includes the following statistics for 2005/06:
• 420,000 people in Great Britain are suffering from stress, depression or anxiety – 195,000 of these first become aware of their condition in the past 12 months
• An estimated 10.5 million work days were lost in 2005/06 with each person suffering having an average 30.1 days off over the past 12 months.
Why then has stress become such an issue? In truth there are probably a number of different factors:
• There is a general growth in employment law claims
• The increasing prominence of health and safety as an issue
• The working time regulations enacted as a health and safety measure, have emphasised the perceived link between working time and employee health
• Work-life balance is high on the social/political agenda
• There is an ongoing debate about the pros and cons of the ‘long hours’ culture
• Landmark legal decisions have confirmed employers can be sued for injuries caused by work-place stress
• Ongoing medical studies and analyses support the detrimental effect that stress and prolonged working hours can have on health
• There have been a number of high profile trade union campaigns.
But perhaps the most significant is the ‘the doctor's pen – the willingness of hard pressed GPs, no doubt themselves suffering from work related stress, to sign off patients for ‘stress’ and ‘depression’.
And employers who get it wrong face serious legal risks. The landmark case of Walker v Northumberland (1994) made it clear that an employer owes a duty of care not to cause psychological damage to its employees as a result of the volume or character of work. In short, employers can be sued for injury caused by stress at work.
Another case (Sutherland v Hatton 2002) made it clear that it is not straightforward for employees to successfully pursue a stress personal injury claim. An employer must always be mindful of the risks. The liability associated with successful claims can be very high.
For example, someone suffering from stress may have a nervous breakdown and not be fit to work. Compensation, particularly for highly paid insurance executives, could, therefore, be significant.
Also a personal injury claim is not the only weapon available to employees who feel they have suffered from stress in the workplace.
They could also pursue a breach of contract claim, potentially a claim under the working time regulations and in many cases there may also be a risk of a disability discrimination claim if employees can demonstrate their medical condition amounts to a disability.
“A personal injury claim is not the only weapon available to employees who feel they have suffered from stress in the workplace. They could also pursue a breach of contract claim, potentially a claim under the working time regulations and there is the risk of a disability discrimination claim
The fall out for the employer could be severe, financially and in terms of their internal and external reputation. So, a proactive approach designed to minimise the risk of stress in the workplace is extremely important.
Procedures need to be in place to identify those already suffering from stress as well as those particularly at risk. Those suffering from stress need the necessary support at the earliest possible stage.
In this context employers should:
• Carry out risk assessments in line with HSE guidance
• Implement any identified necessary measures following such assessment
• Ensure rigorous recruitment procedures so those recruited have the skills and experience to cope
• Use induction training to ensure those taken on have necessary understanding of an organisation's culture
• Make training for staff a priority so they can cope with the demands of their job; introduce support programmes such as mentoring
• Ensure effective internal communication procedures are in place so employees are aware of developments that are likely to affect them and feel they can have an input
• Put in place, implement and review procedures to prevent harassment, discrimination and bullying within the work place
• Ensure an understanding approach is taken to stress
• Use ‘return to work’ interviews
• Watch out for potential warning signs which might include: grievances; changes in employee's behaviour; high levels of absenteeism/ill health;comments through appraisal/evaluation; poor performance in previous good performers; and high levels of staff turnover
• Consider introducing employee assistance programmes
• Be aware of factors which may cause stress, for example major reorganisations or the introduction of new technology
• Seek to avoid a ‘blame culture’ within an organisation
• Encourage the uptake of holidays
• Promote a healthy work life balance
• On becoming aware of a problem in relation to an employee take swift action to resolve it.
Stress is one area where HSE guidance is particularly helpful. Its guide, Tackling Work Related Stress says: “Managing work-related stress and securing the well being of your work force is an investment.”
The burden of tackling the challenge presented by stress largely rests with HR professionals. Staying on top of the latest tribunal decisions and keeping in line with new thinking on best practice is easier said than done. Reading the trade media and HR media is one option. Another is to use one of the news and trainings services that are springing up.
But whatever route you use to stay informed, the key is create the right culture and act quickly at the first sign of an issue. Failure to do so could prove very expensive.
Bob Mecrate-Butcher is employment partner at Pinsent Masons’ insurance core