Mental illness and dismissal

headinhands250Employers are often faced with the difficulty of managing a psychiatrically ill employee who is not fit for their duties.  


They have compassion; they try to accommodate the employee – they counsel all their staff to work with the employee. But still the employee is not fit for work, has used up all his or her sick leave, and now three months have passed. What can you do?


The Workplace Relations act acknowledges it is a valid reason to terminate an employee who has used up all their sick leave and three months later remain unfit for pre-injury duties.


For the purposes of the act, the sick leave/absence can be aggregated over a year – it need not be continuous.


What do you do?

  • You are entitled to require the employee to undergo psychiatric examination to determine if they are fit for their pre-injury duties.
  • You must afford the employee procedural fairness – explain your concerns, provide a copy of the report you receive from the psychiatrist, allow them the opportunity to respond to both the report and your view that their employment may be terminated, and permit them to have someone present to support them.
  • Ensure during this process they are safe. Refer them to the employee assistance program or work with those close.
  • Be open and empathetic about why.


There are risks to an employer in future unfair/unlawful dismissal claims and discrimination claims. As long as your treatment is fair, the person is not fit for pre-injury duties after the time described above, and you have carefully documented and managed the situation, you have very little legal risk.


The risk is all human. So be open, honest and don’t put it off too long.



Andrew Douglas is the founder, principal lawyer and managing director of Douglas Workplace & Litigation Lawyers. Andrew is an experienced commercial litigation and workplace lawyer, who acts both as a solicitor and advocate.

 Andrew Douglas, Douglas Workplace & Litigation Lawyers


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