Still stressed about stress?

Rob Towner, Partner and Andrew Scott-Howman, Partner | May 2005

There was a lot of fuss about workplace stress in 2003.

There had been the trilogy of successful employment claims for stress-related harm - the cases of Gilbert, Brickell and Benge.

There had also been the change to health and safety legislation, which expressly acknowledges workplace stress as a hazard.

But since that time, there has been a conspicuous silence from the Courts.  Where have all the stress claims gone? 

Stress flares up again

That period of silence has now passed.  With something of a spectacular flurry, recent weeks have provided us with something of an answer.

First, and perhaps most significantly, the District Court handed down the first prosecution for workplace stress under the Health and Safety in Employment Act. 

The decision is Department of Labour v Nalder & Biddle (Nelson) Limited (13 April 2005).  It concerns an employee hired by a Nelson company to assist in its accounts department. 

Unfortunately for all concerned, almost immediately after this new employee started work, her two co-workers resigned.  Inevitably, the responsibilities placed on her were greater than had been expected. 

Regrettably, however, she did not cope well with this additional burden.  She complained that she was suffering from stress, and (presumably with the support of some medical information) informed her chief executive that she was suffering from chest pains related to it. 

The company did take some steps in an attempt to alleviate the employee's burdens (by hiring additional staff).  Those steps were not, however, enough to solve the employee's problems. 

Her chest pains continued and, only a few short months after commencing work, she was forced to resign from her employment.  She subsequently raised an employment problem, which was settled on a confidential basis.  The Department of Labour did, however, proceed with a prosecution.

The District Court found that the prosecution had been made out.  It ordered Nalder & Biddle to pay a fine of $8,000, and to pay reparation to the employee of $1,300.

Are the floodgates opening?

All things considered, the decision in Nalder & Biddle is perhaps more significant for what it is not, rather than what it is.

Despite fears that there would be a veritable flood of stress prosecutions, this is the first such claim in almost two years of the amended legislation. 

Further, the fine imposed in this case is hardly at the high end of the scale.  Against the potential maximum fine of $250,000, it is a penalty at the low end.

There have been two other recent decisions in cases involving claims brought by employees against their employers for compensation for harm suffered as a consequence of workplace stress. 

In the first of these cases, Whelan v A-G in respect of Children & Young Person Service (Employment Court, Auckland, 21 December 2004), the employee succeeded in her claim. 

The employee had previously suffered from a cardiac condition which her doctor thought could have been related to workplace stress.  She returned to the workforce, however, and took up a similar role. 

Unfortunately, she suffered a burgeoning workload - and was asked to take on more and more work.  She made complaints to her employer which apparently went unheeded.  Finally, things came to a head when she collapsed twice in her office.

In this case, the Court found that the employer knew (or ought to have known) about this employee's problems, and the adverse effects she was suffering. 

The employer could have taken steps to avoid harm but, instead, the employee suffered a breakdown which resulted in her medical retirement.  The employee's claim was allowed, and it was left to the parties to attempt to negotiate a payment of appropriate compensation.

The employee in Nilson-Reid v Attorney-General in respect of the Director-General of the Department of Conservation (Employment Court, Christchurch, 7 March 2005) did not succeed in her claim. 

She suffered negative consequences that were related to workplace stress.  The Court concentrated, however, on an analysis of when these negative effects should have become obvious to the employer. 

It concluded that a reasonable realisation would have occurred late in the piece - and, in fact, only at the time that the employee resigned. 

As a result, the Court found that the employer had not been given an opportunity to address the employee's negative health consequences, and that the employer could not be reasonably held liable for the harm suffered by her (even though it was accepted that the harm had been caused at least partially by workplace stress).

Conclusion

These three recent decisions - one involving a prosecution and two involving employment claims - represent the first real activity in this area for a number of years. 

Far from being the source of boundless litigation (as some may have feared), it appears that workplace stress is, in reality, the origin of only a limited amount of workplace litigation - at least so far.

Advice and information

Bell Gully's Employment Team can advise on all areas of employment law, including stress in the workplace.  Contact the team at the numbers below for more information.

For further information, please contact:

AUCKLAND

Rob Towner
Partner

WELLINGTON

Andrew Scott-Howman
Partner