Navigating Dismissal amidst Mental Health Challenges

In recent cases reviewed by the Fair Work Commission (FWC), the complex dynamics at play when disciplining and dismissing staff with mental health issues are evident, highlighting the meticulous approach required by employers.

Workplace claims related to mental health issues are on the rise, accounting for 11 percent of serious claims in 2022-23, as reported by Safe Work Australia.

Termination due to underperformance often arises after a lengthy process involving feedback loops, performance improvement plans, and unmet expectations, creating an onerous situation for everyone involved. When an employee grappling with mental health issues is involved, these decisions become considerably more nuanced and demand extra care.

this includes balancing the requirement to uphold performance standards to ensure operational efficiency while implementing a performance management process that accommodates mental health considerations.

Recent rulings by the FWC note that if mishandled, these situations can lead to protracted legal battles, discrimination claims, and compensation should the dismissal process itself cause harm.

So, what does a fair dismissal process entail when mental health is a factor?

Navigating Performance Issues Tied to Mental Health

While mental health conditions do not absolve employees from meeting performance expectations, they necessitate that you proceed with added caution, especially when dismissal may ultimately be on the table.

Given that mental health difficulties could be fuelling performance problems, it’s beneficial to first address any psychological hazards or stressors present.

This includes taking reasonable adjustments to support employees in the workplace including remote work or altering schedules, either temporarily or permanently, where possible. Seeking guidance from an employee’s doctor (if permitted) will also ensure that you are taking all necessary steps to manage the employee in a safe and reasonable way.

Key Considerations When Dismissal Involves Mental Health Issues

1. Is mental health-based dismissal discriminatory?

• In accordance with the Disability Discrimination Act 1992, mental health conditions are typically regarded as disabilities. An employee could claim impairment due to a diagnosed condition and contend that insufficient accommodations led to their termination, potentially violating discrimination laws.
• An example involved a claim to the FWC, where an employee alleged her PTSD, depression, and anxiety contributed to performance shortcomings, with her dismissal linked to discrimination. In the circumstances, dismissal would be justified had the employer made reasonable adjustments to the role.

2. Can mental health issues extend deadlines for unfair dismissal claims?

• Employees typically have 21 days post-dismissal to file an unfair dismissal or general protections claim. But mental health conditions may hinder timely action.
• However in some cases, the FWC has granted an extension of time due to PTSD and depression, and will consider delays’ reasons, if an Applicant can identify mental health factors that impaired their ability to comply with the limitation period.

3. Can the dismissal process exacerbate mental health issues?

• Yes, a dismissal process can exacerbate a mental health issue.  Therefore, to minimise exposure to an employer, it is essential that all steps taken when managing employees are reasonable to ensure the employer mitigates the impact on the employee’s mental health.

If you need assistance managing employees, contact Cairns Employment Lawyers today.