BUSINESSES are being warned of a potential stress time bomb as the continuing recession places unprecedented demands on employees who are working longer hours to cover redundancies but with less job security.
According to the latest figures, more than 13 million working days are lost each year because of stress at a cost to the UK economy of £3.7 billion.
Incidents of workplace stress are on the increase with a recent study by the Chartered Institute of Personnel and Development claiming that, for the first time, stress has become the most common cause of long-term sick leave in Britain.
As stress becomes more common, many businesses are still unaware of their obligations to deal with workplace stress under the terms of their employers’ liability insurance according to Bluefin.
Peter Castle, head of customer proposition at insurers Bluefin, said: “Workplace stress is often thought of as an HR and legal issue but there can be important insurance implications to consider. The good news is that in most cases, incidents of stress can be resolved without the need for the affected employee to resort to legal action but it is very important that businesses keep their insurance companies informed during complaints of workplace stress to avoid potential claims in the future.
“Stress is an increasing feature of many workplaces and it is essential that businesses don’t bury their heads in the sand, but instead take action to tackle stress before it’s too late.”
Most businesses are required by law to take out employers’ liability insurance which enables them to meet the costs of damages and legal fees for employees who are injured, made ill or suffer psychiatric harm at work through the fault of the employer. However Bluefin says businesses must notify their insurance company in the event of an absence attributed to work related stress.
This is to comply with employers’ liability policies and to give insurers the opportunity to offer guidance and support that could prevent employees from suffering further harm.
Bluefin says there are four requirements that must all be established before a court will find an employer liable to pay compensation for workplace stress:
> The employee’s work posed a real risk of causing psychiatric illness and the employer knew (or ought to have known) that the employee was exposed to that risk
> The employer failed to take reasonable steps to prevent a foreseeable injury
> A recognisable psychiatric injury or illness occurred as a result of stress
> The employee must be able to show that the illness is most likely to have been caused by stress at work and not by other factors.
If a business can show that it has taken reasonable steps to prevent stress from causing a medically diagnosed ‘psychiatric injury’ such as offering alternative roles or counselling, then it is unlikely they will be in breach of their employers’ liability policies, says Bluefin.