In today’s go-go world of business, employers and employees alike are placed under an immense amount of pressure. As such, it is no wonder that stress claims (or psychiatric injury claims if you want to get technical about it) are on the rise. Unrealistic expectations, heavy workloads and workplace harassment issues may all give rise to a stress claim or psychiatric injury. However, just because a worker has succumbed to such an injury, does not automatically result in the employer becoming liable for the same. Accordingly, it is of vital importance that employers are well aware of their liability, if any, when it comes to stress claims. Nothing is worse than accepting legal responsibility for a situation that, in retrospect, you consented to because you didn’t know any better.

Get ready, I’m about to hit you with some truth!

The three limbs of a psychiatric injury claim

The short answer is that an employer will be liable where an employee suffers a psychiatric injury. The proviso is that an employer’s liability will be enlivened if, and only if, the injury arose as a result of the employee’s work activity. At the outset, this means that a causal connection must be shown to exist between the injury and the employee’s work efforts. An employee cannot attribute personal misfortune outside of work to the employer.

But what about injury arising as a direct consequence of an employee’s work activities? Essentially, for an employee to put forth a valid stress claim and make and seek damages, they must satisfy three pre-conditions:

  • The employee must show that they have suffered a recognised psychiatric illness, i.e. post traumatic stress syndrome. It is not sufficient if the employee merely feels distressed, anxious or overwhelmed. However, just because an employee may have a special susceptibility to a psychiatric illness does not prevent them from recovering damages. An employer always takes the employee as they find them.
  • The employee must show that the employer should have reasonably foreseen that the employee in question would eventually fall victim to the psychiatric injury. This is to be determined according to the nature and extent of the work activity and ultimately requires the employee to show either:
    • that there was a sudden traumatic work event, or
    • that there were visible signs of trauma over a defined period of time, pointing to the onset of a psychiatric illness. Mere complaints of feeling stressed or overworked are not enough and it is necessary that there exist clear signs of a psychiatric illness. A claim is unlikely to be substantiated where an employee suffers in silence.
  • The employee must show that his or her employer fails to take reasonable steps to avoid or diminish the risk of psychiatric injury, having regard to the nature of the work. This last limb ultimately requires an employer to look forward into the future and take preventative measures to minimise the risk of injury.

Duties under the contract of employment

It is important to note that an employer will not be liable for an employee’s psychiatric injury if it is brought about as a result of the employee performing tasks that were expressly contracted for under the terms of their employment contract. Nevertheless, an employer may be liable in circumstances where:

  • they vary an employee’s duties under the contract of employment; or
  • terms are implied into the employment relationship under statute or the common law.

Bullying, harassment and excessive workloads

Two notable situations arise, under which a psychiatric injury claim may be substantiated.

  • Workplace bullying and harassment: All employers are under a contractual duty to provide a safe place of work for their employees. This, amongst other things, involves providing an environment that is free from bullying, intimidation and/or vilification. Accordingly, if bullying and/or harassment give rise to a psychiatric injury, the employer may be liable. What amounts to bullying and harassment will depend on the circumstances, but it may include:
    • intimidation tactics;
    • verbal abuse or threats;
    • ridicule;
    • exclusion and isolation tactics; and
    • unjustified criticism.
  • Excessive workloads: This is a grey area at best. The courts have yet to lay down definitive principles as to whether an excessive workload can give rise to a recognised psychiatric injury. To date, the courts have demonstrated a general unwillingness to allow recovery for a purported psychiatric injury in such instances. Ultimately, the courts are of the opinion that all work is inherently stressful and thus for an employee to recover under this head of action, he or she would need to fall within the three limb test (discussed above).


It is imperative that all business owners know their liability when it comes to psychiatric injury claims. If you have a worker who has put forth a stress claim or would like more information on this particular area of the law. Our dedicated and experienced staff of LegalVision employment lawyers would be happy to assist you.

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