Terminating psychologically injured workers – challenges


If an employer is relying on a medical assessment of a worker’s capacity to work, they must ensure that the medical advice is current, and that the distinction between current capacity and future capacity is understood and explored with the medical treater(s).

Terminating workers suffering from mental illness – challenges

psych-injury-and-stigmaEmployers must balance various considerations and avoid assumptions, speculation and urban myth, when dealing with a psychologically injured worker.

A fairly recent decision (Applicant v Respondent [2013] FWC 7421) of the Fair Work Commission (FWC) has highlighted that there are significant challenges and risks for employers when they seek to terminate psychologically injured workers.

In this case, the FWC found that a public hospital had unfairly dismissed a worker from his audio-typist position on the basis of his (alleged) mental illness/psychological injury.

When a worker’s conduct causes concern

Following repeated complaints by other workers (colleagues) about what they described as the psychologically injured worker ( the Applicant) “weird’’ and “disturbing” emails, the hospital’s Employee Relations Manager met with the Applicant on 16 March 2013.

The injured worker was asked by the hospital’s employee relations manager whether he would be willing to undertake a psychiatric assessment. This would determine what, if any, condition he suffered from, his capacity for work, and what steps, if any, the manager (hospital) could take to safely return him to the workplace. The psychologically injured worker agreed.

Ten days later the Hospital (employer) received a copy of the independent medical report prepared by Associate Professor Doherty, which said the worker had a disorder of the mind – namely  paranoid schizophrenia – for which he was neither seeing a psychiatrist nor taking medication.

According to this professor, the worker had no current capacity for work, would be an unreliable and inconsistent worker and engage co-workers in mistaken beliefs about himself, and had a strong potential to be disruptive in the workplace.

“In my opinion, your employee needs to be in psychiatric treatment… In my opinion your employee should provide a certificate by a treating psychiatrist certifying that he is fit to return to work before he so returns to work.”

Two days later the Hospital (employer) terminated the worker’s employment on the basis of the psychiatric report and his alleged inappropriate emails to colleagues.

Was the psychologically injured worker’s termination harsh, unjust or unreasonable?

The Fair Work Commission said that the worker’s termination was harsh, unjust and unreasonable, and -importantly-that there was no valid reason to sack the worker.

FW Commissioner (Ryan) fond that the diagnosis in the psychiatric report did not provide a sound reason for the termination of the worker. Ryan also found that the employer (hospital) had taken the comments of Associate Professor Doherty out of context and ignored the fact that his report had “pointed to how the ongoing employment relationship could be maintained”. Also the employer (hospital) had not explored the length of time that the worker may be incapacitated for work so the “mere existence of a current level of incapacity” was an inadequate reason for the termination.

The FWC Commissioner (Ryan)  found that the employer (Hospital) on its own evidence ignored Associate Professor Doherty’s advice on the alleged psychologically injured worker’s return to work:

“Associate Professor Peter J Doherty did not say that the (worker) had a permanent incapacity to perform work for the (hospital/employer).

Rather, Associate Professor Peter J Doherty described the (worker) as not having a current capacity to work.”

Similarly, the FW Commissioner rejected the employer’s contention that the worker’s inappropriate conduct was a valid reason for the termination.

The worker’s alleged weird and disturbing emails were not a valid reason for dismissal either, as they were sent before the Hospital (employer) asked the worker be psychiatrically assessed. There was also no evidence they affected the health and safety of other employees:

“It would appear to be indefensible to dismiss an employee who has a mental disorder for conduct which occurred when the employee was unaware that he had a mental disorder and for which he had not yet received any treatment.”

The Commissioner was also critical of the employer’s failure to provide the worker with an opportunity to respond to the reasons for his dismissal prior to the decision being made to terminate his employment. The evidence of the employer was clear that the decision to terminate the worker’s employment had been made prior to the meeting at which he was advised of the reasons for his termination.

So what happens now to the psychologically injured worker?

The FWC ordered the worker be reinstated with continuity of service and lost earnings.

FW Commissioner Ryan did stress that, while reinstatement restored the employment relationship, it did not automatically mean that the Applicant immediately returned to the workplace.

Both the worker (applicant) and the hospital (respondent) agreed that he suffered from a mental disorder (although not on what it actually was, with the worker contending it was Autism Spectrum Disorder, not paranoid schizophrenia).

FW Commissioner Ryan as such required the worker to get a clearance from a treating psychologist and a treating psychiatrist that he was fit to return to work before he could go back to the hospital and his job.

The challenge for employers with psychologically injured workers

Managing workers with any illness or injury is often a complex issue for employers, with competing considerations to be balanced, such as discrimination, adverse action or unfair dismissal.

Mental illness / psychological injury adds another layer of complexity. Not only is it a distressing and challenging medical problem which is often poorly understood, but it can be a difficult legal issue for employers, especially if its symptoms pose a perceived or actual risk to the health and safety of fellow workers, or the sufferer him/herself.

Employers must balance various considerations and avoid assumptions, speculation and urban myth, when dealing with a psychologically injured worker.

  • a current diagnosis is important but by no means determinative;
  • general “capacity assessments” will almost invariably not be enough;
  • an expert prognosis, particularly one that specifically assesses the employee’s future capacity to perform the inherent requirements of his or her position, is an important foundation upon which to base decisions on the management of the employee; and
  • workers must be given a reasonable time for treatment and their condition to improve.
If the worker’s illness does not improve upon treatment, or the worker refuses to seek or continue treatment, then an employer can take steps that might lead to termination. Likewise, if an employee’s behaviour raises a genuine risk or threat to others’ welfare, then an employer must take steps to protect them, which could include termination. In taking any of these steps, however, the employer must not lose sight of the importance of making decisions based on evidence, not speculation or assumptions.


Article based on ‘Managing a mentally ill employee brings its own unique challenges‘  By Michael Byrnes | Clayton Utz

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