The Appeal Court’s decision to overturn three stress-related compensation awards sparked a flurry of interest from the media last week.

Most newspapers concluded that the ruling would bring the “compensation culture” to an abrupt end. The Daily Mail welcomed what their home affairs correspondent called “an end to the gravy train”, while the Mirror headline screamed “Stress is out”.

But employment law experts have since played down the significance of the Appeal Court ruling.

“This is not a major change in the law,” said Rob McCreath, a partner with employment law specialists Eversheds. “I would still advise an employer not to put an employee into a situation where they were likely to face undue stress.”

The judgment saw two teachers and a factory worker stripped of awards totalling nearly pound;200,000. Leon Barber, head of maths at East Bridgewater school in Somerset, had been awarded more than pound;100,000. His claim centred on the depression that he said resulted from the very long hours he worked at the school.

Penelope Hatton’s award of more than pound;90,000 was also set aside. The languages teacher at St Thomas Becket high school on Merseyside retired on ill-health grounds in 1996, claiming to have suffered from work-related stress.

TUC figures reveal that work-related stress cases increased 12-fold over the past year with 6,428 cases in 2001, compared to 516 in 2000. Stress claims are a major part of the caseload for the unions and the high payouts - pound;300,000 in one case - are one reason why local authorities are facing higher-than-expected insurance premiums.

Experts see the Appeal Court judgment as a reining back, a reminder to lower courts of the principles established by the original legal precedent.

“This brings the situation back into line with the Walker case,” said Rob McCreath. “If it’s not foreseeable, the employer isn’t liable.”

John Walker was a social worker employed by Northumberland County Council. Over a 12-month period, work pressures triggered two nervous breakdowns. Before the breakdowns Mr Walker had complained about his workload.

After the first episode he was promised extra help by his employer which was not forthcoming. The second breakdown resulted, and the court case followed.

Mr Walker had first to demonstrate that he had suffered an “injury”. Medical evidence is necessary here; someone who simply says “I feel stressed” has no legal claim.

It must also be shown that the employer could have “reasonably foreseen” the psychological harm. Northumberland could not be held liable for Mr Walker’s first nervous breakdown, only the second.

John Walker also successfully showed his breakdowns to be the result of “workplace stress”. This can be difficult, given that there are pressures outside work.

In the Appeal Court last week those principles were re-asserted. The judges - Lady Justice Hale, Lord Justice Brooke and Lord Justice May - ruled that signs of stress must be plain enough for any reasonable employer to realise that something had to be done about it. Leon Barber lost his claim because he had not informed his employer about the symptoms of stress he was experiencing.

The ruling also made it clear that stress must arise from the workplace. Penelope Hatton lost her claim because the judges found no evidence that the stress she was suffering from originated in her job.

In the third case, a bakery worker’s claim was rejected when the judges ruled that there was nothing “unusual, excessive or unreasonable” about his work routine.

“Sadly he was unable to cope,” said Lady Justice Hale.

Headteachers’ associations welcomed the judgment. “We will have to dust down our existing guidance,” said David Hart, general secretary of the National Association of Head Teachers.

“The Appeal Court judgment will be welcome to heads as managers, because it brings home to people that they can’t simply say ‘I’m stressed’. If the employee doesn’t like the job because it is proving stressful they must shout or leave.”

But Mr Hart rejected the notion that the ruling would put an end to a “gravy train” of claims. In his view the gravy train never existed.

“Stress-related claims are already extremely difficult to prove,” he said. “We reject the vast majority of cases brought to us by heads, because we don’t think they are runners.”