Company loses unfair dismissal case after terminating worker diagnosed with paranoid schizophrenia

An unidentified business has lost an unfair dismissal case after it terminated an employee following a report from a psychiatrist in which the staff member was diagnosed with paranoid schizophrenia.

The Fair Work Commission found the company misinterpreted the remarks given by the psychiatrist, which said that although the employee wasn’t fit for work at that time, he could be in the future if he sought appropriate treatment.

The case is yet another example of how business owners can find themselves in trouble by failing to satisfy all avenues of employment law.

TressCox Lawyers partner Nick Duggal told SmartCompany this morning the case highlights interesting rules regarding what an employer can or cannot request a staff member do with regard to medical testing and evaluations.

For instance – an employer is well within their right to request a psychiatric evaluation.

“If there were sufficient grounds on the basis of behaviour the employee had exhibited, there may be a right to seek some form of independent medical advice,” he says.

Both the employee and company involved in the Fair Work case have been left anonymous, due to the private nature of the matter.

The Fair Work Commission heard the applicant had been assessed by a psychiatrist in relation to his current workload. That doctor diagnosed the employee with paranoid schizophrenia, and said he didn’t have a current capacity for work.

However, after receiving the report, the company fired the employee – and this was a mistake. The Commission said the report argued the employee could have received treatment and continued to work.

“It is clear from the report of Associate Professor Peter J Doherty that the mental disorder of the Applicant was treatable through psychiatric treatment and medication, and that the Applicant could return to work once cleared by a treating psychiatrist,” it found.

The company also referenced some emails sent by the applicant that had caused trouble in the office, but the Fair Work Commission said these couldn’t come into play.

“It appears to me that the existence of “weird” and “disturbing” emails and even emails falsely representing what occurred together with other interpersonal communications initiated by the Applicant does not provide a valid reason for dismissal.”

“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.”

Nick Duggal says if a medical evaluation finds that an employee is fit to work, but only after treatment has been received, the employer cannot terminate the work contract.

“If a doctor gives advice that an employee would be fit for work duties provided they underwent appropriate treatment, it would in my assessment be difficult to sustain an argument they could not fulfil the inherent requirements of the position,” he says.

“The only exception would be if the employee refused.”


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