Mental health issues can impact anyone throughout their lives, leaving them struggling to attend work and complete other daily tasks. This means employers need support to ensure employees can focus on their health without worrying about employment. However, there are times when poor performance, serious misconduct, or lengthy absences from work can interfere with the performance of your company or team. In these cases, termination can seem like the only option.
But can you terminate an employee with mental health issues? The answer is complex, with many moving pieces that must be considered to ensure fair dismissal. Our guide covers the factors that should be considered when terminating an employee and the best ways to support employees suffering from mental health issues.
What Are Mental Health Issues?
Mental health issues is a broad term used for a wide range of mental health conditions, including disorders that impact your thinking, mood, and behaviour. This includes anxiety disorders, depression, addictive behaviours, eating disorders, bipolar disorder, and schizophrenia.
These issues can vary in severity from person to person, with many treatment options available, including medication and therapy. Mental health issues can be incredibly complex, and their severity can change daily, which can result in those suffering being unable to carry out daily tasks, like housework or travelling to work.
Can You Terminate An Employee With Mental Health Issues?
You can terminate an employee with mental health issues, but many factors must be considered to ensure that the termination is fair. Employers have a duty of care to their employees, ensuring they are supported as much as possible. Employers also have Work Health and Safety (WHS) obligations, where they must prioritise workers' health and safety, including their mental health.
Below, we have detailed the steps you must take and the factors to consider when terminating an employee with mental health issues. As each case is different and mental health issues can be complex, we recommend seeking legal advice to ensure you act lawfully.
Consider Your WHS Obligations
When you are considering terminating an employee with mental health issues, you must ensure that you have done everything in your power to support them at work. It would be best to start by considering your WHS obligations, where you have a duty of care to your employees and their health and safety.
You should follow the same steps you would for other health risks. These steps will vary depending on your company and the role of your employee, but they might include:
Identifying the hazard
Conducting a risk assessment
Implementing control measures to manage the risks (like mindfulness tools, regular meetings with your employee, or an EAP program)
You should also consider the following factors:
The likelihood of the risk
The degree of harm that could result
The availability of ways to minimise or eliminate the risk
The cost of taking these steps
You should also consider how these WHS obligations extend to return-to-work plans if your employee has had periods of absence. You should consider your WHS obligations and do everything possible to create reasonable adjustments to allow your employees to continue working.
Consider Employees Leave Entitlements
Before considering termination, you should consider your employee's leave. Permanent, full-time employees can take 10 days of personal/carer's leave per year, with a pro-rata amount for part-time employees. These days can be carried over to the following year and can be used for mental health issues.
Should your employee use all of their leave and require more time off, unpaid leave could be negotiated. As an employer, you are within your right to ask for evidence from your employees, like a medical certificate, that will entitle them to their leave.
Ensure You Avoid Adverse Action
The Fair Work Regulations Act of 2009 protects employees from adverse action being taken against them while they are absent from work due to an illness or injury, including mental illness. Adverse action applies to the following:
Altering the employee's position to their prejudice or discrimination
Terminating of employment
This does not prevent you from managing employee performance, like taking action for a reason other than their illness or injury. This applies when their performance is separate from their mental health condition and can be complex. You must make sure that any termination is fair and should seek legal advice where needed.
Consider The 3 Month Express Prohibition
The Fair Work Act prevents you from dismissing an employee because of a temporary absence from an illness or injury, but an absence is no longer considered temporary when:
The employee's absence is longer than 3 months of unpaid absence
The total unpaid absence within 12 months is longer than 3 months
In these cases, a termination on grounds of absence could be considered, but again, you must make sure the termination is fair.
Consider The Risk Of Discrimination
Before terminating your employee, you need to ensure there is no risk of discrimination, which could land the company with an expensive lawsuit. As part of discrimination laws, it is unlawful to discriminate against an employee based on their disability or within a specific time after an injury. The time frame varies from state to state but usually lasts several months.
There is a way for employers to legally terminate on discriminatory grounds if the employee cannot meet the requirements of the role after the employer has made reasonable adjustments. Should the changes you implemented when your employee first made you aware of their mental health issues not be enough to allow them to complete their taste, there could be a valid reason for dismissal. There are still several risks to consider, and you should ensure that every avenue has been explored before dismissing them.
Managing Employees With Mental Health Issues
Before terminating an employee with mental health issues, you should do everything in your power to support them. You can do so by making reasonable adjustments, following your company's performance management process, and respecting your employee's space while they are off work. We have more details below to help you see how best to manage your employees' mental health.
Making Reasonable Adjustments
Reasonable adjustments is a broad term we uescribe any changes to your employees' roles that could help them return to work with their mental health issues. The reasonable adjustments will vary depending on your company and the employee's role, but we have some examples.
To make these reasonable adjustments, you should discuss them with your employee. They might be given guidance from their doctor about the necessary changes, and you must take their suggestions on board. These suggestions could include the following:
A reduction in working hours
A temporary hybrid or remote working agreement
Additional time to complete tasks
A decrease in workplace duties
A change of managers or teams
A flexible working pattern
A condensed working week (working four longer days instead of 5 standard days)
Additional equipment to help complete their tasks
This is not an exhaustive list, but it could help you support your employee suffering from mental illness. Reasonable adjustments can be made temporarily and should be reviewed frequently. Most employers understand that the adjustments will be revoked once their employer can work at full capacity again.
Following Your Company's Formal Performance Management Process
When your employee struggles with their mental health and workload, you can sometimes turn to your performance management process to assist them. It's worth noting that you should not place them on performance improvement plans if it adds to their mental health issues unless there is a serious concern about your employee's performance outside of their illness.
You might find that your company's performance management processes have tools that can help support your employees. This could include regular meetings where your employee can speak to someone they trust for support or get regular feedback about their work to help them with any improvements needed.
Respecting Your Employees Space
When your employee is off work on personal or unpaid leave, you must respect their space. Harassing employees while they are off work can impact your employee's mental health further and gives your employees grounds to make a formal complaint to your senior management or their union.
You must remain in contact to gain medical assessments or sick notes from your employees' doctor and carry out any welfare checks. Still, you should not message them daily asking about their return to work date or about work they were completing before their absence.
Final Thoughts
Terminating an employee with mental health issues in Australia is not a straightforward process. The Fair Work Act ensures that an employee's employment is not terminated unfairly and provides appropriate paths for you to terminate an employee when their absence is longer than three months or their absence impacts the performance of the business. Ensuring that you follow the necessary steps outlined above prevents an unfair dismissal claim and ensures that your employees' mental health condition does not deteriorate due to their employment.
Frequently Asked Questions
Do My Workplace Obligations Apply To Mental Health?
Yes, as an employer, your WHS obligations extend to mental health issues. This means you must ensure your workers' health and safety as far as possible. This means applying the exact steps you would to any other health risk, where you identify the hazard, perform a risk assessment, and implement measures to help manage your employer's health.
What Do I Do If An Employee Has Mental Health Issues?
The first step is to talk to your employees and ask them to offer as much support as possible. Not all employees will want to discuss their mental health issues with you, so signpost them to others in your company, their doctor, or local mental health services. Where possible, you should discuss how work impacts mental health and what reasonable adjustments could be made to help improve your employee's mental health.
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