Stress and Settlement Agreements

Settlement agreements are often used after allegations of workplace stress have been made.

What is stress?

The Health and Safety Executive (HSE) defines stress as the “adverse reaction people have to excessive pressures or other types of demand placed on them”. Whilst in itself stress is not an illness per se, it may rise from or lead to other illnesses such as depression, anxiety or heart disease.

Employers have a number of legal obligations in relation to stress in the workplace which arise from various legal sources including healthy and safety legislation, disability discrimination laws, a common law duty of care, restrictions on working hours and in relation to unfair dismissal. The fact that there is no single piece of legalisation which deals with stress related absence makes it quite a complex area for employers and often they are not sure what they should and should not do when an employee is off sick with stress.

Stress can be a risky area for employers as it can give rise to a number of potential issues and/or claims if not handled correctly. For example an employee could have a claim under/for:


  • Health and safety legislation (every employer has a duty to ensure, so far as possible, the health, safety and welfare at work of all of their employees);

  • Breach of common law duty (which could relate to bullying or an excessive workload);

  • Protection from Harassment Act under which an employer can be held liable for actions of another of their employees (‘vicarious liability’);

  • Breach of the Working Time Regulations 1998 which deal with daily and weekly breaks etc;

  • Unfair dismissal.

  • Disability discrimination under the Equality Act 2010 arising from a stress-related condition which could include:


    • Direct Discrimination

    • Indirect Discrimination

    • Discrimination arising from disability

    • Failure to make reasonable adjustments

    • Harassment

    • Victimisation

Stress during disciplinary proceedings

It is not uncommon for employees to go off sick with ‘stress’ during disciplinary proceedings. Employers must then balance the need to deal with the disciplinary proceedings swiftly and the health and wellbeing of the employee being disciplined. The employee may well be too ill to attend a hearing. Employers must also carefully consider whether stress may have actually been the reason for the employee’s conduct giving rise to disciplinary proceedings.

Contact during stress related leave

A period of absence related to stress will be treated as a period of sickness absence under a company’s sickness absence reporting procedures. It is standard for such policies or contractual clauses to reference the need for regular contact during any periods of absence.

If you find yourself in a situation where you are signed off work with stress and have been presented with a Settlement Agreement please do contact a member of the team who would be delighted to help you through any queries that you may have. As is clear from this article, there are many issues to consider and you should certainly ensure that you understand all of your options before signing any settlement agreement. digg stumbleupon buzzup BlinkList mixx myspace linkedin facebook google yahoo