Performance and Conduct Issues for Employees Raising Mental Illness


By Nikita Barsby, Special Counsel 

Mental Health and Performance Management

Around 45% of Australians aged between 16 and 85 will experience a mental illness in their lifetime, and 1 in 5 Australian adults will experience a mental illness in any given year.[1]  Therefore, it is very likely that from time to time an employer will need to performance manage an employee who is experiencing a mental illness.

What is mental illness?

Mental illness is a health issue that affects how a person feels, thinks, behaves and interacts with others.[2]  It is important to note that the definition of  “disability” in state and federal anti-discrimination legislation includes both permanent and temporary mental illness.[3]

There are many factors that increase the likelihood of mental illness in a workplace, including poor management, unreasonable performance demands, poor communication, unclear roles or responsibilities and bullying.[4]

Risks arising from failing to appropriately performance manage an employee experiencing mental illness.

Failing to appropriately manage an employee experiencing mental illness can give rise to claims that an employer has:

  • breached occupational health and safety legislation, under which employers are obligated to provide employees with a safe workplace;
  • breached State and Federal anti-discrimination legislation;
  • breached an employees general protections under the Fair Work Act 2009 (Cth) if adverse action is taken against an employee who discloses a mental illness, because of that disclosure, or because they take personal leave;
  • unfairly dismissed an employee by failing to account for the impact an employee’s mental illness may have been having on their performance or conduct[5]; and/or
  • breached an employee’s employment contract /or breached the Competition and Consumer Act 2010 (Cth), if representations are made in an employment contract or an employer’s policies/procedures regarding the provision of a safe workplace etc.[6]

Employers do not have to avoid performance managing an employee with a mental illness, but should adopt appropriate, fair and lawful strategies for doing so.

Fitness to participate in a performance management process

Before commencing any performance management process with an employee who is experiencing mental illness, an assessment should be made about whether the employee is fit to participate in the performance management process.

The appropriate way to manage concerns regarding an employee’s fitness to participate is for the employee to undergo a fitness for work assessment including, where appropriate, a psychiatric assessment.

Employers can direct an employee to undergo a medical assessment to confirm their current and/or future fitness for work (or engagement in a performance management process) where:

  • there is a genuine indication of a need for it, for example where the employee claims they are unfit for work or to participate in performance management process, or where the employer has a reasonable basis for a concern that being at work, or engaging in a performance management process, may pose a risk to the employee’s or others’ health and safety; and
  • the medical assessment is relevant to the inherent requirements of an employee’s role.

Once an employee is deemed fit to participate, or fit to participate with reasonable adjustments, the performance management process should continue.

Any reasonable adjustments identified by the fitness assessment should be strictly adhered to (e.g. time limits to meetings to discuss performance concerns, presence of support person etc.).

Performance management processes

A tailored performance management process should be developed to suit each individual circumstance but, generally, should include the following steps:

  • an initial meeting with the employee to outline the performance concern and hear the employee’s response;
  • the development and implementation of a performance improvement plan, which includes specific steps to be actioned and measures to be adopted over a specific period to assess improvements in performance;
  • monitoring and follow up meetings with the employee to consider and assess progress; and
  • final meetings to close out the process.

Where mental illness is the cause of underperformance, consideration should be given to what reasonable adjustments can be made to support the employee.  These may include allowing the employee to work flexibly for a period of time, altering the type of work the employee is required to perform for a period of time, or offering the employee a buddy or mentor.

Potentially suicidal or self-harming employees

There may be occasions where an employee either directly or indirectly indicates that they are at risk of harming themselves.

SANE Australia identifies four basic steps to assist in helping a potentially suicidal or self-harming employee.

In summary, SANE advises to:

  • tell the person that you are concerned and are there to help;
  • ask the person if they are thinking about suicide or self-harm and if they have made any action plans to do so;
  • take action to get help; and
  • take care of yourself.

Practical tips

Useful tips for managing performance issues are:

  • make use of Employee Assistance Programs or equivalent outside professional advice;
  • document performance management and other relevant processes thoroughly;
  • enquire whether the employee has a health issue that may be affecting their performance;
  • acknowledge the impact that an employee’s illness may be having on other employees and, while respecting the privacy of the unwell employee, provide counselling and support to impacted employees as appropriate;
  • where there are interpersonal issues at play – if appropriate introduce some different people to the process; and
  • take a common sense and empathetic approach.

Undergoing a process of performance management either as an employee or employer when mental health issues are at play is difficult and should be approached sensitively and with care.  For assistance, contact MDC Legal’s team of experienced employment lawyers on 9288 4000.

[1] Australian Bureau of Statistics National Survey of Mental Health and Wellbeing: Summary of Results 2007

[2] Australian Human Rights Commission Workers with Mental Illness: a Practical Guide for Managers 2010

[3] See for example Equal Opportunity Act 1984 (WA) s4. definition of “impairment”

[4] Hor, Joydeep, Managing Workplace Behaviour: A Best Practice Guide, Chapter 3: Discrimination, 2012

[5] For example, see: Burke v Suncorp Group Pty Ltd [2015] FWC 3357 and Vernham v Jayco Corporation Pty Ltd [2015] FWC 8185

[6] For example, see: Goldman Sachs JBWere Services PTY Ltd v Nikolich (2007) 163 FCR 62; [2007] FCAFC 120