Managing employee performance is a critical aspect of running a successful business. However, when mental health conditions are involved, the process becomes more complex and requires a nuanced approach. In Australia, employers have legal obligations to provide a safe and healthy workplace, which includes supporting employees with mental health conditions.
This article is written by our experienced lawyers to explores how Australian employers can effectively and lawfully manage the performance of employees with mental health issues while fostering a supportive and inclusive workplace.
Key Takeaways
Comply with Work Health and Safety (WHS) laws to manage psychological risks.
Avoid discrimination under the Disability Discrimination Act 1992 (Cth).
Make reasonable adjustments unless they create unjustifiable hardship.
Use an empathetic and lawful performance management plan.
Only terminate employment as a last resort.
Legal Framework: Mental Health and Workplace Law in Australia
1. Work Health and Safety (WHS) Obligations
Under Australian WHS laws, employers are required to manage psychosocial risks in the workplace.
This include:
Excessive workloads
Lack of control over work
Poor workplace support
Failing to manage these risks can lead to legal liability and employee harm.
2. Anti-Discrimination Laws
Employers must avoid both direct discrimination (e.g. dismissing an employee due to their mental illness) and indirect discrimination (e.g. enforcing policies that disproportionately affect employees with mental health conditions).
3. Reasonable Adjustments
Employers are legally obligated to make reasonable adjustments to support employees with mental health conditions. Examples of reasonable adjustments include:
- Flexible working hours
- Modifying job duties
- Altering the work environment
These adjustments must be implemented unless they impose an unjustifiable hardship on the business.
Steps to Lawfully Manage Employees with Mental Health Conditions
Provide Regular, Constructive Feedback
Before initiating a formal performance management process, ensure the employee has received regular, casual feedback. This helps avoid surprises and allows the employee to address performance issues early.
Identify Inherent Job Requirements
Clearly define the essential tasks of the employee’s role. This ensures that performance discussions are focused on objective job requirements rather than subjective opinions.
Assess the Impact of Mental Health
If an employee’s mental health condition is affecting their performance, consider how it impacts their ability to meet the inherent requirements of their role. Employers may request medical evidence if necessary but must handle this sensitively.
Implement Reasonable Adjustments
Work collaboratively with the employee to identify and implement reasonable adjustments that can help them perform their role effectively. Examples include:
- Adjusting start times for employees affected by medication
- Providing additional training or support
- Allowing remote work arrangements
Develop a Performance Management Plan
Create a performance management plan using the SMART framework:
- Specific: Clearly outline performance expectations
- Measurable: Define how success will be measured
- Attainable: Ensure goals are realistic
- Relevant: Align goals with the employee’s role
- Time-based: Set clear deadlines for achieving goals
Monitor Progress and Provide Support
Regularly check in with the employee to monitor their progress and provide additional support as needed. This demonstrates empathy and helps build trust.
Conduct Formal Meetings
If performance issues persist, arrange formal meetings to discuss concerns. Allow the employee to bring a support person and ensure meeting notes are accurately recorded.
Consider Termination as a Last Resort
If all reasonable adjustments have been made and the employee is still unable to meet the inherent requirements of their role, termination may be considered lawful. However, this decision must be made carefully to avoid legal risks.
Creating a Mentally Healthy Workplace
Proactively promoting a mentally healthy workplace benefits both employees and employers. Key strategies include:
- Fostering a positive workplace culture where mental health is openly discussed
- Identifying and mitigating psychosocial risks, including training of managers on these
- Providing resources and support for employees facing mental health challenges, such as Employee Assistance Programs (EAPs)
- Encourage work-life balance
By implementing these strategies, employers can improve productivity, reduce absenteeism, and enhance employee satisfaction.
Legal Risks of Mishandling Mental Health in the Workplace
Employers who fail to appropriately manage employees with mental health conditions may face significant legal risks, including:
- Breaching WHS laws by failing to provide a safe work environment
- Violating anti-discrimination laws at both state and federal levels
- Facing unfair dismissal claims under the Fair Work Act 2009 (Cth)
- Breaching employment contract terms
- Engaging in misleading or deceptive conduct under the Competition and Consumer Act 2010 (Cth)
Frequently Asked Questions (FAQs)
What are reasonable adjustments for employees with mental health conditions?
Reasonable adjustments may include flexible working hours, modifying job duties, or providing additional training and support.
Can an employer ask about an employee’s mental health condition?
Employers can inquire about an employee’s mental health only if it directly relates to their job performance or safety.
What should employers do if an employee refuses to disclose their mental health condition?
Employers should focus on addressing performance issues objectively and encourage open communication without pressuring the employee to disclose personal information.
When is termination of employment lawful for an employee with a mental health condition?
Termination is lawful if the employee cannot meet the inherent requirements of their role despite reasonable adjustments being made.
How can employers minimise legal risks when managing employees with mental health conditions
Employers can minimise legal risks by complying with WHS and anti-discrimination laws, providing reasonable adjustments, and following a fair and empathetic performance management process.
If you’re unsure how to navigate mental health and performance management, we’re here to help – reach out to Prosper Law today for a free consultation.
