Employee burnout: How far does an employer’s duty of care extend?

In this article we explore:

  • The detrimental impact burnout has on employees, the workplace, and the expense it can cost an organisation when mismanaged.

  • Burnout has been classified by the World Health Organisation as a medical health disease.

  • Now that burnout is a recognised medical diagnosis and a potential mechanism of workplace injury, Lockton is observing a surge in workers’ compensation claims for this type of condition.

  • In some scenarios, burnout has been a feature in high court cases where the employer was unable to prove that they took the appropriate action, despite the employee having no prior symptoms or records of complaints against the employer.

Recognising burnout

Whilst it is difficult to measure each individual’s threshold when it comes to stress, it’s important that executive teams have an open dialogue about mental health with people leaders in the workplace.

People leaders need to be aware of employee signs that burnout is creeping in. The following are just some of the behaviours to look out for:

  • Frequent absences: employees who have more regular short absences might be experiencing burnout and intervention can occur pre-claim. Read Lockton’s Waking Up to Absence Report (opens a new window) for more information.

  • Regular sickness: burnout and stress lead to exhaustion, which can lead to physical sickness and injury. If an employee is sick regularly, it might be caused by burnout.

  • Working overtime: employees who are overworked and are clocking in too much overtime could be pushing themselves to their limit, which can lead to burnout.

  • Disengagement: when burnout has started to set in, an individual’s morale might be lower than previously due to exhaustion and feelings of anxiety.

  • Decrease in attention to detail and work efficiency: fatigue from burnout can result in a lack of focus and the ability to work to a high level.

In an article by Human Resources Director, they highlight findings from the Microsoft Work Trend Index which shows that 62% of Australian workers reported being burned out at work, and 66% of Australian People Leaders have also suffered from burnout.

Evolving duty of care: a new understanding of burnout

Given its WHO classification, employees are well within their rights to make workers’ compensation claims based on burnout.

Lockton is increasingly observing events where the employee has accused their employer of not taking the necessary means to prevent or address burnout.

Whilst it might seem difficult to prove that an employee is experiencing burnout, at the end of the day it’s an employers’ duty of care to not only recognise the symptoms but to take action to prevent and manage burnout.

Employers might be surprised to learn that if they’re unable to produce evidence to show that they took necessary measures to combat an employee’s burnout, they could face a workers’ compensation claim, that if contested, may not hold any grounds in a courtroom.

Wake up call for employers: employee wins overwork case in 2022 High Court Decision

A lawyer suffered psychiatric injury from overwork and overexposure to trauma. This all began after the claimant’s employer placed additional work on current staff after resignations were announced in her department. The employee experienced stress and trauma as she continued to work overtime. The employer failed to check in on her before she reached breaking point, and despite not having any prior burnout symptoms or a record of complaints, she won the case.

The High Court stated: “The circumstances of a particular type of employment may be such that the work to be performed by the employee is inherently and obviously dangerous to the psychiatric health of the employee (just as other kinds of work are inherently and obviously dangerous to the physical health of the employee). In any such case, the employer is duty-bound to be proactive in the provision of measures to enable the work to be performed safely by the employee. The present was such a case.”

Spiraling workers’ compensation and insurance claims

The cost of mental health claims can be 2.5 times that of a physical injury. It is widely acknowledged that mental health injuries are on the rise and now that burnout is a recognised medical diagnosis, Lockton is already seeing more workers’ compensation claims being received and, in some cases, accepted, for this type of condition. Executives need to be aware of this and foster a culture of care right throughout the organisation.

Four actions employers can take

1. Diagnostic tools and data

It’s important that organisations can show they have measures in place to care for their employees and address burnout.

Through data and analysis, organisations can identify burnout trends and areas that require the most attention from which a health strategy can be designed, implemented, and measured. Once in place, understanding the impact of this burnout intervention program on all absence drivers will better inform employers.

2. Open dialogue on burnout and mental health

Employers should communicate openly about burnout to promote an accepting and understanding culture, whilst making employees aware of the tools that they can utilise before they reach that point. First steps are to establish an employee health and wellbeing engagement activity plan.

3. Physical and psychological injury management plans

A consistent, coordinated, and targeted approach to injury management is critical. Early intervention is critical for positive outcomes for both the individual and the organisation. According to Lockton data, on average, psychological claims cost 330% more than a physical claim.

4. Invest in corporate private health insurance/employee wellbeing programs

Health insurers are rapidly evolving as health partners and providing employers with preventative health programs and initiatives across mental, physical, social, and financial health to support employee and organisational health. Read Lockton’s Corporate Private Health Trends Report (opens a new window)for more information.

The future of burnout

Given the global economic instability and fast-paced technology advancements, it can be expected that burnout is only going to increase. However, it’s a condition that when identified and appropriately cared for, can be treated and managed. This allows people to continue working, and organisations to continue functioning with minimal absences, whilst limiting their workers’ compensation claims.

Burnout is something that anyone could suffer with, and most of us are likely to experience at some point during our lifetime, but by reading the signs and supporting each other through it, employers can help prevent further injury that could even save a life.

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Waking Up To Absence by Lockton Australia