While the majority of worker stress claims are genuine and reasonable, these claims can also be used to hinder performance management processes and prevent termination of employment.

How do you minimise the risk of legitimate claims being made, as well as ensure that an unwarranted claim is rejected?

When a stress claim can be rejected

An employer must be able to prove one or more of the following:

• the psychological injury did not arise from work;
• the complainant hasn’t sustained an actual psychological injury; and/or
• the employer took ‘reasonable management action’ (irrespective of whether the management caused the psychological injury).

How to reduce the risk of genuine stress claims

1. Supervision

Supervisors have a legal duty to identify hazards, including psychosocial hazards that can lead to psychological injury.

Once a supervisor has identified a hazard, they must then determine the level of risk linked with that hazard and implement a control to provide a safe working environment for the affected staff and monitor their health.

Employers have an obligation to ensure their supervisors can identify if a worker is struggling mentally and deal with them in a reasonable manner that adheres to both health and safety law and employment law.

An intervention process must then be carried out to decrease the likelihood of the stressed employee developing a psychological injury.

2. Intervention

When initiating an intervention process, the supervisor should maintain a relationship of trust with the worker and manage their performance fairly.

The supervisor will need to work with the employee alongside skilled interveners, such as HR specialists and medical practitioners, to conduct a health plan to keep them safely at work.

A correctly administered intervention plan will ensure no further harm is caused to the employee through their work and will provide evidence that reasonable management action has been taken if a claim reaches court.

3. Policies and processes

These form the backbone of worker management.

Organisations must implement a range of legally compliant workplace policies and outline a code of conduct.

It is essential that poor performance and misconduct are always managed consistently.

All employees should clearly understand what the policies and processes are and that a failure to comply with them can lead to disciplinary action or even termination of employment.

As long as supervisors and management adhere to their policies and processes, behave reasonably towards their employees and correctly document their actions, it’s unlikely that a stress claim will be successful.

Managing employees who may make a stress claim during a performance management process

If it appears an employee will make a stress claim you must do the following:

1. Alert the worker’s manager to explain what you are doing and gain their support.
2. If you have an enterprise agreement, examine the relevant policies and list what to do.
3. If a disciplinary meeting is required and is part of your company policy or enterprise agreement, invite the employee to have a support person present and meet away from other staff to ensure privacy. If only counselling is necessary, you should meet alone.
4. Explain the issue clearly and encourage the employee to respond.
5. Take a break from the meeting, consider the employee’s response and then reconvene to advise them of the outcome.

Remember, if a complaint of bullying is made about the process, the defence is ‘reasonable management action’. Any complaint should be investigated quickly and once it is determined that the employee was subject to reasonable management action, proceed with the performance management.

If an employee makes a stress claim based on your performance management process, you should engage with your insurer to seek to have the claim rejected. By following the five steps above, the rejection of such a claim is much more likely.