The cost of stress

In 1992 the CBI calculated that in the UK, 360 million working days were lost annually through sickness at a cost to organisations of £8 billion. [1] By 2003 the CBI estimate was closer to £11.6 billion and in 2004 reached £12.25 billion. Days lost through sickness absence are falling, however, and were down to 168 million in 2004.

  • The CBI puts the total cost to the economy of mental ealth and stress problems at £5 billion a year - equal to industry's total annual losses through theft and many times the costs of strikes.[2]
  • A 1996 report from the Institute of Management said that "an estimated 280,000 people take time off work every day because of work-related stress; representing a cumulative cost in terms of sick pay, lost production and charges of around £7 billion annually".[3]
  • The International Labour Organisation estimates that the cost of stress amounts to over 10% of Britain's Gross National Product.
  • An HSE supplement to the 1990 Labour Force Survey found an estimated 18m workers took time off work suffering (or believed that they had suffered) from work-related stress, depression or anxiety in the preceding year.[4]
  • About half a million people in the UK experience work-related stress at a level they believe to be making them ill; up to 5 million people in the UK feel "very" or "extremely" stressed by their work; and work-related stress costs society about £3.7 billion every year (at 1995/6 prices).
  • Out of 40.2 million working days lost to work-related illness and injury during 2001-2002, 13.4 million were lost to stress, anxiety or depression. This compares to 12.3 million days lost to musculoskeletal disorders and 7.3 million to injury.
  • In total, nearly 600,000 people took time off for stress, including 265,000 reported new cases.
  • HSC figures also show that the estimated number of stress-related conditions has increased from 829 per 100,000 workers in 1990 to 1,700 per 100,000.
  • The most recent research shows that these figures have not decreased and in work situations have actually gone up. Loss of productivity both by sickness absence and by the lowering work effectiveness is a cause of deep concern.
  • The European Union estimates that work-related stress affects at least 40 million workers in its 15 Member States and that it costs the European Union at least €20 billion annually.

Legal Costs

In the ground breaking case of Walker versus Northumberland County Council, John Usher, a solicitor working for Thompsons, representing UNISON member social worker John Walker, estimated that the cost to the employer of "management failure" was over £400,000. This included: damages of £ 175,000; £150,000 for the 2-week trial; Sick pay; and Ill-health pension [5]. 

Since this case there has been a series of others, including:

  • Ballantyne versus South Lancashire Council 1996, Pocock versus North East Essex Mental Health Trust 1998
  • Lancaster versus Birmingham Council 1999 and Ingram versus Worcester County Council 2000.

They and other similar cases have largely produced out of court settlements of between £25K and £203K and have demonstrated that there is a duty of care on the part of employers and of this duty.

It is always sensible for workers to consult their Trade Union and to take the advice and support offered if they feel they have a 'case'. It would be equally sensible for employers to undertake regular monitoring of the workplace to make sure that it is a stress-free zone and if they find a problem to take appropriate action in consultation with recognised Trade Union Shop Stewards and Health & Safety Representatives.

In 2002, the 'Hatton and others' Appeal Court Judgement overturned three of four cases of damages awarded at County Court, see for the full report. (external link)

The summary outcomes of this Appeal set new margins within which subsequent cases will be determined as follows:

  1. The ordinary principles of employer's liability apply - no special provisions apply;
  2. The threshold question is whether this kind of harm to this particular employee was reasonably foreseeable;
  3. Foreseeability depends upon what the employer knows (or ought reasonably to know) about the individual employee. An employer is usually entitled to assume that the employee can withstand the normal pressures of the job unless he knows of some particular problem or vulnerability;
  4. Because of the nature of mental disorder, it is harder to foresee than physical injury;
  5. There are no occupations which should be regarded as intrinsically dangerous to mental health;
  6. Factors likely to be relevant in answering the threshold question include: a) The nature and extent of the work done by the employee. Is the workload much more than is normal for the particular job? b) Signs from the employee of impending harm to health. Has he a particular problem or vulnerability? Has he already suffered from illness attributable to stress at work? c) The employer is generally entitled to take what he is told by his employee at face value, unless he has good reason to think to the contrary;
  7. To trigger a duty to take steps, the indications of impending harm to health arising from stress at work must be plain enough for any reasonable employer to realise that he should do something about it;
  8. The employer is only in breach of duty if he has failed to take the steps which are reasonable in the circumstances, bearing in mind the magnitude of the risk, the gravity of the harm, the costs and practicability of preventing it, and the justifications for running the risk;
  9. The size and scope of the employer's operation, its resources and the demands it faces are relevant in deciding what is reasonable;
  10. An employer can only reasonably be expected to take steps which are likely to do some good;
  11. An employer who offers a confidential advice service, with referral to appropriate counselling or treatment services, is unlikely to be found in breach of duty;
  12. If the only reasonable and effective step would have been to dismiss or demote the employee, the employer will not be in breach of duty in allowing a willing employee to continue in the job;
  13. It is necessary to identify the steps which the employer both could and should have taken;
  14. The claimant must show that that breach of duty has caused or materially contributed to the harm suffered. It is not enough to show that occupational stress has caused the harm;
  15. Where the harm suffered has more than one cause, the employer should only pay for that proportion of the harm suffered which is attributable to his wrongdoing, unless the harm is truly indivisible.
  16. The assessment of damages will take account of any pre-existing disorder or vulnerability and of the chance that the claimant would have succumbed to a stress related disorder in any event.

Subsequently, the Barber case (one of the original group of four cases) was further appealed to the House of Lords.

The real issue before their Lordships was whether the onus should be on the employee to alert the employer or whether the employer should be proactive and take steps to prevent his injuries. This involved practical propositions 2, 5, 6 and 7 above. The majority of the House of Lords opted for the same standard as that applied in physical injury cases. To an extent, they rejected the argument that the onus should simply be on the employee to complain.

Lord Walker said the case was "very close to the borderline", but added " What the Court of Appeal failed to give adequate weight to was the fact that Mr Barber, an experienced and conscientious teacher, had been off work for three weeks with no physical ailment or injury. His absence was certified by his doctor to be due to stress and depression. The senior management team should have made enquiries about his problems and seen what they could do to ease them, in consultation with officials at the Council's Education Department, instead of brushing him off unsympathetically or sympathising but simply telling him to prioritise his work".

So in the case of a person who has not yet had a period off sick through stress related illness, and/or has failed to complain about his problems, on current case law the claim is likely to fall below the borderline, and will fail. Even if there is a period of previous absence or there have been complaints, it will still be necessary to prove causation of injury, breach of duty and a link between the two.

Next: The Law and Work-Related Stress