STRESS and depression caused or exacerbated by work are now the biggest occupational health problems in the UK, affecting all sectors of business and industry.

And, with the Health and Safety Executive recently warning employers that it intends to adopt a much tougher stance, the need for employers to carefully monitor the level of stress to which employees are subjected is clear.

Not only are the costs to a business in the number of working days lost to absenteeism staggering, but failure by employers to take action to alleviate the often tell-tale signs of stress could lead not only to prosecution under health and safety legislation but also to claims by employees for damages at common law.

It has long been accepted that employers are liable at common law for physical injury which employees suffer in the workplace. However, it is only since 1995 that the courts have clarified the law in relation to employers' liability for mental or psychological injury, such as stress, in the workplace. The employer's duty of care at common law, therefore, encompasses both the physical and mental health of employees.

If, for example, an employee, who has suffered a mental breakdown due to workplace stress, is able to prove to a court that there has been a breach of this duty of care and that the injury suffered was foreseeable, then the employer may be liable to pay substantial damages to the employee.

Although there is no statute which deals specifically with employers' liability for stress, provisions are included in the 1974 Health and Safety at Work Act, which puts the onus on the employers to protect employees - as far as is reasonably practicable - from both physical and mental injury.

In addition, under the terms of the Management of Health & Safety at Work Regulations 1992, employers are obliged to assess the risks to occupational health in order to take appropriate preventative and protective steps. Employers should also be aware that they may be in breach of the implied term in a contract of employment that the employer will take reasonable care of an employee's health and safety in the workplace.

If an employer exposes an employee to high levels of stress through heavy workload or fails to take steps to minimise stress in the workplace, that employee could claim constructive dismissal.

Employers are also at risk of constructive dismissal claims where failure to protect employees from stress could be construed as a breach of an employer's duty of trust and confidence.

It is possible there will be an increase in such claims, particularly in view of the recent speculation in the press that the Government will raise the unfair dismissal compensation cap to #50,000.

A recent Trades Union Congress survey found that one of the main causes of stress was long hours. All employers should now be aware of the Working Time Regulations which became effective on 1 October, 1998 and should take note of the additional rights that certain employees have if they are required to work excessively long hours. Employers clearly have a responsibility for encouraging among all employees an understanding of what stress is and how it can manifest itself. The onus is on the employee to notify the employer of his heavy work load or other demands on him, but the employer must then identify which actions are to be taken to ease these pressures.

Many employers now have in-house counselling teams or access to professional assistance for their employees.

One of the difficulties for employers is that we all react in different ways to pressure. Some positively thrive on it and others collapse under the strain. Assistance, therefore should be given to employees on an individual basis.

Employers should also bear in mind that in the long run it will be more cost effective to deal with problems of stress rather than ignore them. Employers who ignore stress in the workplace do so at their peril.

q Kara Imray is a solicitor

specialising in employment law with Shepherd & Wedderburn.