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December 2002

Workplace Stress - A Growth Industry?

There has been much discussion recently about the concept of occupational stress and the suggestion that it is to become the "next growth area" in employment litigation.

Reasons for Stress

There is a combination of reasons why this issue has come to prominence:

  • An increasing incidence of workplace "burnout";
  • Development of the understanding of occupational stress;
  • Abolition of ACC coverage for stress-related claims;
  • Heightened public awareness brought about by proposed changes to Health and Safety in Employment legislation;
  • Two recent Court decisions where employees whose careers had ended due to stress-related illness were awarded damages exceeding several hundred thousand dollars against their employer.

The word "stress" in an employment context does not denote any particular clinical condition. It refers to the effect of the pressures of the workplace on the individual worker. This, in itself, gives rise to a difficulty – each individual has a different level of tolerance to pressures in the workplace. In addition, every person has different pressures, both from the workplace and from their private life, which blur the boundaries between work-related stress and the stress of every day life.

The Courts have said that stress must be discernibly linked to a clinically recognised disorder – mere anxiety, distress and frustration are not enough.

A Recent Decision

In the case of G v Attorney General , Mr G was an overworked employee of the Probation Service who required stress-related sick leave and hospitalisation for "vital exhaustion" or burn out manifesting itself as chest pains and later accepted as contributing to the development of heart disease. The Court awarded him lost remuneration representing the 15 or so years of possible employment which remained after his forced resignation in 1996 at the age of 50, general compensatory damages of $75,000, as well as reimbursement of medical expenses of $14,000.

While Mr G’s case is extreme, the message is clear: employers need to be proactive, take assertions of stress seriously and take all practicable steps to identify, eliminate or minimise anything that might allow sufficient stress to cause harm.


Communication is a key – both from the perspective of an employee who is suffering from stress, and from the employer who needs to respond appropriately when stress is reported. It is certainly not advisable for an employer to wait until someone actually has a nervous breakdown before they take any action. Nor should a highly stressed employee attempt to conceal his or her stress to avoid a potential backlash from his or her employer.

All Practicable Steps

What actually constitutes "all practicable steps" or whether a particular situation can give rise to an action can be difficult to ascertain. We would suggest that you consult with a member of our Employment Law team if a situation involving workplace stress arises in your workplace – whether as an employee or an employer. Often early intervention and mediation can resolve matters without the need for further legal involvement.