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UK - Stress related employment claims in the City soaring

16 November 2011

 
Legal claims by employees in the City who have suffered from stress are reaching record levels, according to GQ Employment Law, the specialist employment law firm.

The Health and Safety Executive estimates that 18,000 workers in UK financial services and insurance business suffered from work related stress, depression or anxiety caused by their job in the last 12 months.

Legal claims relating to stress are some of the most expensive claims that the financial services sector faces. In the City, these are routinely multi-million pound claims and can be in the tens of millions.
 
Stress claims by employees normally fall under personal injury and disability discrimination rules, which means that the damages are uncapped (unlike unfair dismissal damages which are capped at 68,400 Pounds).
 
Jon Gilligan, Partner at GQ Employment Law, commented "the incredibly tough trading conditions and volatility of the last four years has led to record levels of stress and mental illness within the City."
 
"The struggle to deliver on income targets, the shadow of redundancy and the long hours culture has created a pressure cooker environment. The trend that we have seen in employment claims is something that occupational health therapists are also seeing."
 
"If a senior banker or trader is no longer able to work because of stress then that can mean a claim for lost income easily running into the tens of millions of pounds."

"The claims are often so big that employers are forced to settle the cases before they reach a tribunal."

In one of the few City cases to go to court in recent years, a secretary for an investment bank with an annual salary of 45,000 Pounds won 835,000 Pounds from her employer when she was badly managed following a bout of stress, which equated to nearly 20 years of loss. Many City employees are on much higher salaries and bonuses, meaning their claims would be of much greater value.

Biggest claims tend to occur if employees' return is mismanaged
 
Stress related employment claims typically arise when an employee who has returned to work after an initial stress related absence suffers a further breakdown.

When an employee returns from a stress related absence reasonable adjustment must be made to that employee's working conditions to prevent them having a relapse. That may include cutting their working hours or forcing them to take a reduced workload.

Gilligan explained "this is when the City's 'eat stress for breakfast' attitude can cause problems. It's important not to throw the employee straight back into the bear pit."
 
What can employers do?
 
Employers can mitigate the risk of facing an expensive claim by taking reasonable steps to respond to their employee's condition, such as:
 
• Making sure their employee sees an occupational health therapist once they return from sick leave caused by stress.

• Making reasonable adjustments to the employee's work to take into account their stress.

For a sales person in a bank, adjustments might include reducing targets and appraising and setting the bonus accordingly.

For an M&A banker who frequently has to work long hours as part of the job, adjustments might include allowing him/her to build up the scale of working hours over a period of time rather than returning to full-time immediately.
 
Making adjustments for employees can have practical benefits as well as meeting legal requirements. Jon Gilligan added "employees who feel that they have been treated well by their employer will feel more loyalty to them and will be much less likely to launch a legal claim."
 
In some cases, such as for brokers, the stress might mean that the employee was never able to return to their job because there are no reasonable adjustments that the employer can make. In that case the employer may have to ask the employee to move jobs.

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