Mental Health Issues in the Workplace

Mental health issues are becoming more frequent in the workplace and can affect an employee’s capacity to perform their role. Further, they can be the most costly type of workplace injury as they often require longer periods of absence and compensation claims can be significantly higher.

Safe Work Australia's 2024 statistics reveal a continued rise in workplace claims related to mental health conditions during 2022–23, with such claims accounting for 10.5% (14,600) of all serious claims. This represents a 19.2% increase from 2021–22 and a staggering 97.3% increase compared to 10 years ago.

Anti-Discrimination Legislation recognise mental health conditions as a disability and therefore the employee with mental health issues is protected from discrimination.

As with any disability in the workplace an employer is obliged to make reasonable adjustments to the role. Mental health conditions are generally recognised as disabilities under anti-discrimination laws, which prohibit discrimination against an employee on the basis of their disability. As with any disability if the employee can show that their performance in the workplace was affected by the disability and the employer used the poor performance as a reason for termination, not only can the termination be found to be unlawful, there can also be penalties imposed under discrimination laws.

In recent case in the Fair Work Commission an employee was able to prove that her mental health issues contributed to her poor performance and that the employer knew about the issues and the ensuing limitations, and knowing of the issues the employer than failed to make reasonable adjustments to her role. This included adjustment to her hours of work and allowing her to work from home to minimise stresses. The employee was dismissed for not fulfilling her duties.

Section 5(2) of the Disability Discrimination Act 1992 'in general terms, creates a positive obligation' on employers to make reasonable adjustments that enable an employee with a disability to perform the requirements of the role, except where such adjustments would impose an 'unjustifiable hardship'.

It is essential that employers carefully assess the risk of potential discrimination claims, before dismissing an employee who is dealing with mental health challenges. Given the complexity associated with the termination of an employee with mental health issues it is recommended you seek advice specifically tailored to your situation and business.