We all experience extreme pressure from time to time, and somehow manage to cope. As insurance practitioners we are experts in risk identification and control, so why is stress now on centre stage? Some people feel that the cause doesn't always lie in the workplace, but has become a so-called lifestyle issue. Most of us had hoped that the recent increase in stress claims would just be a passing fad, but in reality it seems to be growing at a rapid rate.

Risk managers are well aware of the hidden costs arising from injury to employees. However, an anxious or depressed employee could offend or annoy a company's customers, resulting in considerable lost trade before management becomes alerted to a potential problem or claim. We have even seen a case where a disgruntled employee had access to the company's computer network and planted a deadly virus which wiped out the entire database records system.

But what exactly is stress? If we take a look at two commonly quoted definitions, we find:

  • Stress is people's natural reaction to excessive pressure – it isn't a disease. But if the stress is intense or goes on for some time, it can lead to mental and physical ill health, such as depression, nervous breakdown or heart disease
  • Stress is the normal reaction people have to any perception of excessive pressure or other types of excess demand placed upon them. This reaction is physiological and manifests itself as increasing tiredness leading to exhaustion.

    The actual word itself seems to have little meaning and is widely used to cover both genuine psychological disorders and a range of illnesses, real or imagined. Finer distinctions are a matter for the medical profession and the professional claim technician, but risk managers must also recognise and accept that stress can refer to a number of established psychological complaints such as depression and anxiety. These complaints can contribute to, and exacerbate, other serious and well established conditions such as asthma, heart disease, peptic ulcers, high blood pressure and, in extreme cases, cancer.

    What the law says

    But what do the legal experts say? The Health & Safety at Work Act 1974 requires the employer to provide a safe place of work, while the Management of Health & Safety at Work Regulations 1999 imposes a duty to carry out suitable and sufficient risk assessments. One of the regulations demands that employers take account of the varying capabilities of employees, stating that: “Not every employee would be suitable for every job; education, qualifications, skills and experience must be taken into account…”

    When experts are called to trials to support allegations of anxiety and other conditions, we wonder if they are being led down a somewhat foggy path in acceptance of a fashionable illness much cited in the media. But is stress real? The answer must be yes, as case law now recognises both physical and psychological injury and experts now acknowledge anxiety, depression and other conditions as medical conditions.

    So where should managers focus scarce resources and how should a control programme be implemented? A review of claims is a sound first step. Newspaper articles, together with recently notified claims would indicate that common causes of stress claims include:

  • Excessive work loads
  • Bullying/victimisation
  • Change management
  • Incompatibility.

    But how can risk control be implemented on a practical basis? Normally, hazard spotting is the first step. Unlike machinery, you cannot see or easily measure stress. Nonetheless, potential stresses are all-pervasive. The highest machine output is achieved when a plant is well maintained and run at optimum capacity. The same may be said of the human asset. Realistic planning means that maintenance is more than training. It relates to the welfare of the

    individual. Optimum capacity can only be assessed by sensible performance management against benchmarks and excellent job selection techniques.

    Resource plans seek to maximise return on capital. The need should be to prioritise plant assets to those products or services that generate most profit, as well as an improvement in efficiency for others. The same applies to the human aspect. Where do staff contribute the most? What is the optimum output of a well trained worker? The risk manager will need to be satisfied that there are comprehensive resource plans that are actually used. Job roles and definitions play a critical part in the planning process.

    Are there clear job roles, definitions and individual performance criteria? Is there sufficient flexibility to allow the job holder to schedule work and adjust priorities? We also need to address work fluctuations and ensure that managers are clear in their communication of short-term priorities.

    The risk manager will need to review periodic management reports and, planning ahead, there is a need to ensure that any expansion plans are thought through, with adequate provisions for the additional human plant and training. Of course, it is also imperative that managers make sensible allowances for any extreme personal circumstances such as bereavement, critical illness, divorce, personal illness, personal financial crisis, and so on.

    Stress management training is useful and involves the understanding of the characteristics and nature of stress. It looks at how stress in an individual can be recognised and dealt with when there are so many different circumstances. Have staff been offered the opportunity to accept this measure of self-help? Performance appraisal interviews are also an important technique to uncover productivity issues and latent stresses. They can identify issues of excess work, lack of skill, lack of support, harassment or personal pressures.

    Many cases of anxiety arise from harassment or victimisation. This is partly a performance issue but must be underpinned with a sound support network. What monitoring systems have been introduced to ensure equality of treatment? Interpersonal skills training to all team leaders and managers can aid good practice in personal relationships and can reduce harassment, discrimination and bullying.

    Although assessment of the workplace will have been completed from the point of view of exposure to physical injury, have the same factors been reviewed with possible stresses in mind, such as excessive noise, heat, cold, lighting or over crowding?

    Work not always the problem

    And finally, what happens if a claim is made? If, despite sound practice, an individual does succumb to anxiety or depression, it is often possible to show that this was not caused or contributed to by actions in the workplace. However, this assumes that the firm has complied with best practice. Where any stresses are discovered with an employee, a caring employer will not be found liable [Petch v Customs and Excise Commissioners, 1993]. However, this presupposes that good practice is recorded. The risk manager must not be lead astray with eloquent words or good intentions. The only sound evidence is that which is well documented.

    Rehabilitating injured workers is gaining momentum when applied to physical injuries. There is no reason why rehabilitation principles should not be applied to psychiatric injury. Does the strategy provide for rehabilitation? Counselling forms a major part of any return to work programme. However, if the issue should be one of a management's autocratic style, victimisation or harassment, it may not be possible to return the employee to the same work area.

    In some cases, continued work with the same employer would be unacceptable to the individual. Without intervention, the individual may quickly develop a low self-esteem and a work-shy attitude. In some circumstances this may lead to a significant claim for loss of future earnings. Intervention is required at an early stage, well before any formal claim is made. What occupational health support is available through absence management to support early counselling or outplacement? Given the escalating costs of absence through stress and the expense of stress treatment, the full cost to the business must be carefully measured.

    Good management practice and sound employee support systems will improve customer relations and eliminate or reduce exposure to potential stress claims and absence through stress. Established employers' liability insurers are able to share practical risk control ideas based on their day-to-day claim management experience. A well documented stress exposure response will reduce much stress in the work place and we have already seen that apathy results in increased premiums and loss of business opportunities.

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