In this article, Partner Merrill April, with assistance from Senior Associate Yulia Fedorenko, considers the legal rights and options available to senior executives when facing burnout.
Burnout is a common occurrence among senior leaders and managers and is a complex problem because those suffering from it are often also those responsible for tackling it amongst their direct reports, adding to their personal stress.
Whilst burnout is prevalent in many industries, the Tech industry has been particularly affected, one of the main drivers being the constant pressure to keep pace with evolving technology and not fall behind competitors whilst making effective use of AI and avoiding unacceptable risk. A recent survey from the Upwork Research Institute found that as many as 71% of full-time employees were reporting that they are burnt out.
The need to raise funds to innovate, to deliver a high-quality personal service, (which clients are starting to believe can be done just as well using new technology like generative AI) and to innovate and bring to market new bug-free products, before the competition do, are just some of the factors contributing to this dangerous level of exhaustion.
In its recent updates, Korn Ferry have identified an increasing need for C-Suite executives to make rapid decisions, as tariffs and other initiatives emanating from the US change daily. AI and technology are also advancing at a speed that is challenging to keep up with. Many speak of a “race against the clock” which creates immense personal pressure, to keep pushing on, whilst fighting a feeling that they are constantly behind. Pressure to create quick results before the technology becomes obsolete is intense. At the same time, budgets are under pressure and executives are trying to do more with fewer resources, creating a sense of insecurity (where seeking to stretch out of their comfort zone to fill gaps) and lack of control, which is understood to be a major contributor to burnout.
What can you do to negotiate protection on joining a high- pressured role?
Executives often do not take sufficient care to negotiate what are presented as “standard” terms on entering a new role. The focus historically has been on salary, bonus and short term and long-term equity incentives as well as on post termination covenants.
In the current era, other aspects of the deal are worth considering such as :
- Working from home/hybrid as a contractual right;
- Modification of the normal expectation that the working time regulations will be excluded because working hours are not readily measurable;
- Modification and constraint of the “standard” wide wording that can require a CEO or CFO to stretch into additional roles as the C-suite shrinks and executives may be asked to take on less for more and without adequate preparation or training;
- Paid Sabbaticals and mini sabbaticals on a flexible on-demand basis (with reasonable notice);
- Paid time off and payment for bespoke specific management training (for example a bank of time/budget to be used depending on the needs of the job, for example training on how to manage a neuro-diverse colleague, or on how to upskill on AI tools);
- Unpaid time off for any reason;
- Access to advanced general management programmes such as at Insead or Henley;
- Access to bespoke, paid for executive coaching, for example on how to navigate the competing pressures of investor expectation and employee exhaustion and overwork;
- In addition to private medical and dental, and employee assistance schemes, ask for wellness classes or individual sessions with a recognised wellness provider to be paid for by the company (e.g. private gyms/yoga/padel)
- Ability to put in place tailored corporate wellbeing solutions for your team;
- Job descriptions and KPIs for bonuses that recognise contribution to the health and culture of the Board, their key teams and the whole workforce, to include for example involvement in support groups and focus groups across the organisation or in pro bono initiatives;
- Recognition in the contract that the values of the organisation on joining are fundamental to the contractual bargain such that if those values are radically modified or abandoned (as we have seen in some quarters re DE & I) an agreed option to exit that honours the contract in full, rather than the executive having to raise constructive dismissal arguments and negotiate in a hostile environment, similar to the types of terms we are more familiar with in relation to change of corporate control.
What if an employer pressurises a burnt-out executive to leave?
Executives suffering burnout are often targeted on health or performance grounds and required to leave. Some feel forced to resign in order to give themselves time to recover and re-enter the workplace either in the same or a different career. Their focus in both cases, is to achieve a fair deal and adequate compensation that gives them space to take time out and enough money to tide them over until they can re-enter the jobs market.
Whilst burnout is not recognised as a medical condition, it is frequently linked to conditions such as anxiety and depression which can be disabilities under the UK Equality Act 2010. The disability test is complex, but key indicators of a disability are (a) the condition has lasted or is likely to last for a year and (b) it impacts the person’s ability to do normal day-to-day tasks, even if managed with medication.
It is important to note that other stressors and difficult events in an employee’s private life will always be taken into account by the employer and by the tribunal, on the principle that it must only award compensation for injury to feelings solely caused by unlawful discrimination. It is therefore important to keep a note of the impact of events and seek medical reports and other supportive evidence where an executive realises their health is being directly impacted by work and not by other factors, which they have learned to manage.
Whilst the largest head of claim in employment tribunals is future loss of earnings arising from a discriminatory or unfair dismissal, in discrimination claims, employees may also be able to recover injury to feelings awards and awards for psychiatric damage in appropriate cases.
Executives need to be realistic about the level of such awards, which many are surprised to discover are relatively low. In one case where a tribunal made a finding of unfavourable treatment arising from a disability (consisting of comments and actions by the directors that created a hostile and intimidating environment) and harassment, the award for injury to feelings was £24,000 despite the manager having felt forced to resign.
Personal Injury
Damages for psychiatric injury can be claimed as part of compensation for discrimination.
An employee who has suffered psychiatric personal injury arising from discrimination therefore has two options: they can either pursue a claim for personal injury in the civil courts in parallel with their discrimination claim in the employment tribunal (in which case they should specifically reserve the right to do so in the employment tribunal claim form). Alternatively, they can claim damages for personal injury in the employment tribunal as part of and in addition to the injury to feelings award for discrimination. However, there may be circumstances in which parallel proceedings for personal injury in the civil court are an abuse of process. It is therefore important to seek advice from appropriate specialists if the effect of burnout could give rise to a claim for psychiatric injury, noting that damages cannot be recovered twice for the same injury.
In situations where there has been long term disability and the employer wishes to exit the executive, rather than keep them on the books covered by a PHI scheme, it may be possible to ask the employer to approach the PHI insurer for a buyout offer and negotiate a settlement of employment claims, whilst also considering a free-standing personal injury claim (if the employer has caused the breakdown) which would likely be negotiated and paid out by different insurers. There are strict and short time scales for statutory employment claims and for PI claims, so early advice is advisable.
Conclusion
On your next move, consider carefully what could have helped you to stay or what would give you the protection and flexibility to thrive in the new company and seek bespoke contractual rights to support your goals for a productive and healthy work-life balance so as to lead by example and drive a profitable culture with reduced attrition from burnout and exhaustion. If you (or those close to you) realise you are starting to burnout, lose enthusiasm, have thin resilience and are exhausted despite taking breaks, seek medical help, therapy, exercise, medication. If it’s a problem that is affecting others too, especially if bullying and harassment are present, request an investigation. Consider taking holiday and/or a sabbatical and/or unpaid leave if able to do so, consider raising a grievance, or requesting a workplace mediation, and potentially taking legal advice before doing so, so as to gain a clear understanding of your rights and to devise a clear strategy.
If exit becomes the best option, it is helpful to have legal, tax and potentially PR advice before embarking on a negotiation an exit encompassing salary and other benefits, outplacement, counselling, managed announcements and communications and enhanced payments to reflect loss of statutory rights. If not possible, you will need to consider your tribunal and personal injury claim options in relevant circumstances.
If you are a Senior Executive and would like to discuss further, please contact Partner Merrill April, who specialises in employment and partnership law.
