Stress is always with us, and we need a little in our everyday lives. True, but we don't need too much, and your "good" stress, is my excessive stress. The H&S situation on this is fairly easy, stress is a hazard, like any other hazard. A manager (in civi life. call it what uyou like in the services) is responsible for the H&S of his employees (troops...get the picture) and thus is required by law to Risk Assess the tasks being udertaken. Where a risk exists, the employer (in our case the service) must take those steps which are reasonable to reduce the risk. The steps required must be comensurate with the risk. So small risks don't need much, but big risks need lots. When you look at a task, you need resourse to complete it. This will be people, time, training, tools, equipment...and so on. If a resourse is limited, you can't always do the job safely, and that will cause stress, itself a hazard to safety. Make sure your boss knows, as resourse is allocated by your boss (or his boss)
If anything goes wrong, and you as a manager have acted responsibly, and with "due dilligence" you are not responsible for any injury to your people. The finger moves tothe person above you who did not act reasonably. This may well be the person who knows you are under resoursed, but still expects the job to be done.