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CCIWA Mental Health Kit: Part 3 – The legislative framework

By CCIWA Editor 

Occupational Safety and Health Legislation
The Occupational Safety and Health Act 1984 (OSH Act) and regulations place a duty to provide a safe and healthy workplace and to take action to prevent or minimise risks to the health and safety of employees.

Other duties include:

  • not exposing employees (and others) to hazards;
  • conducting risk assessments;
  • providing information, instruction and training;
  • investigating hazards or injuries that have been reported by employees; and
  • notifying WorkSafe of reportable injuries.

Although “mental health” is not explicitly referenced in the OSH Act, ‘health’ covers both the physical and psychological health of employees.

How you can meet your OSH obligations

1. Not exposing employees to hazards

Employers are required to provide and maintain a working environment and safe systems of work whereby employees are not exposed to hazards.

The OSH Act defines ‘hazard’ as anything that may result in injury to a person or harm to the health of the person. When the legislation refers to not exposing employees to hazards, this also encompasses psychological or psychosocial hazards.

2. Conducting Risk Assessments

The same risk management approach used for physical hazards should be applied to psychosocial risk i.e. Identify, Assess, Control and Review.

3. Providing information, instruction and training

Employers are required to provide information, instruction and training to employees so they can perform their work in such a manner that they are not exposed to hazards.

In relation to psychosocial hazards or risk factors, information, instruction and training may include:

  • bullying, harassment and violence policy, procedure and related training;
  • fatigue management policy, procedure and related training;
  • drug and alcohol policy and procedure;
  • grievance policy and procedure;
  • code of conduct;
  • incident/hazard report process that covers reporting psychosocial hazards; and
  • mental health awareness and management training.

4. Investigating hazards or injuries that have been reported to employers by employees

Psychosocial hazards or incidents (i.e. a bullying incident, work overload, under resourcing) that have been identified or reported should be investigated.

The OSH Act requires employers to: investigate matters reported to them by employees, determine the action to be taken (if any) and notify the employee who made the report of the action to be taken.

Fair work legislation

Fair work legislation

In Australia, the vast majority of employers operate in the federal industrial relations system primarily governed by the Fair Work Act 2009 (FW Act).

All States and Territories (except WA) have referred their industrial relations power to the Commonwealth. Some businesses in WA may still be operating within the State system.

Employees who have their employment terminated for their illness or injury could potentially make a general protections claim and receive uncapped compensation.

In addition, the business can face a fine of up to $54,000, as well as individual fines of up to $10,800.

TIP: It is worth noting the risk of a claim doesn’t end just because an employee has been absent for more than three months. An employee who is terminated after a long absence from work still has access to the usual claims any terminated employee can make. For example, an unfair dismissal claim.

Unfair dismissal

Most employees who are terminated can seek a review of their termination by a tribunal, this includes circumstances where an employee is terminated due to a mental health illness. Unfair dismissal provisions in the FW Act also require that employers do not act in a manner that is harsh, unjust or unreasonable.

Procedural fairness encompasses the following factors:

  • the employee was notified of the reason for dismissal;
  • the employee was given an opportunity to respond;
  • the employee was given an opportunity to have a support person present;
  • if the dismissal related to unsatisfactory performance, the employee had been warned about that unsatisfactory performance before the dismissal; a
  • the degree to which the size of the employer’s business or the absence of human resource specialists would be likely to impact on the procedures followed in effecting the dismissal; and
  • any other matters the tribunal considers.

The Fair Work Commission (FWC) deals with unfair dismissal claims and considers the reasons for dismissal and whether the employee has been fairly dealt with by the employer before dismissal. FWC will examine whether:

  • there was a valid reason for the termination; and
  • the employee was afforded procedural fairness prior to making a decision to terminate.

Reinstatement is the primary remedy unless it can be demonstrated it is inappropriate or impractical. If reinstatement (or re-employment) is not practical, the FWC may order an amount to be paid as compensation (capped at six months remuneration).

The FWC may combine an order for reinstatement/re-employment with an order for back pay of remuneration lost, or likely to have been lost, because of the dismissal.


Adverse action

Employers under the FW Act must not take adverse action against an employee or prospective employee because of mental illness.

It is unlawful for any employer to terminate an employee’s employment because of a mental illness.

The FW Act contains a ‘general protections’ provisions that protects workplace rights, such as sick leave, and provides protection from workplace discrimination.

Under these provisions, an employer must not take adverse action against an employee if they have: a workplace right; exercised that right; or intend to exercise that right.


What is a workplace right?

A ‘workplace right’ is an entitlement a person has under an award, agreement or law such as the entitlement to take paid sick leave.

Workplace rights include the ability to initiate, or participate in a process or proceeding, such as making a request for reduced hours under the flexible working arrangements division of the FW Act due to mental illness.

In addition, workplace rights also include the ability to make an inquiry or complaint, such as complaining they are being bullied due to their mental health illness.

Refer to part 9 on avoiding a successful general protections adverse action claim.


What is an adverse action and who can take adverse action?

‘Adverse action’ includes dismissing or refusing to employ someone, discriminating against someone or injuring someone in their employment, for example, by demoting them.

An example of adverse action between an employer and employee includes an employer dismissing an employee or altering an employee’s position to the employee’s disadvantage, or threatens to do so.


No dismissing an employee due to temporary absence

An employer must not dismiss an employee if the employee is temporarily absent from work due to an illness or injury. For example an employer cannot dismiss an employee because they were away from work for two weeks on sick leave due to mental ill health.

Sections 352 and 772(1)(a) of the FW Act, prohibit an employer dismissing an employee if they are temporarily absent from work because of an illness or injury of a kind prescribed by the regulations.

Regulation 3.01(5) of the Fair Work Regulations 2009 (Cth) provides an illness or injury is not a prescribed kind of illness or injury if an employee’s absence extends for more than three months; or total absences over a 12 month period have been more than three months and the employee is not on paid personal/carer’s leave for the duration of this period.

Refer to part 9 of this guide for more information on the risks associated with termination.

There will be circumstances where an employee fails to return from their personal leave absence or fails to provide further evidence following the expiry of a medical certificate.

Such incidents cannot lead you to assume that the employee has resigned or that you can intimate a termination of employment process immediately.

Where the employee continues to remain away from the workplace, but fails to communicate with the employer and fails to provide any evidence for the reason of their absence, the employee may be deemed to have abandoned their employment.

In dealing with such cases, it is recommended that you follow the steps outlined in part six.

If an employer is aware of the details of the employee’s treating doctor, it is advisable to contact the doctor to ascertain if the employee is capable of making contact.

Disability discrimination legislation
The Disability Discrimination Act 1992 (Cth) makes it unlawful to discriminate against, harass or victimise people with disabilities, including in employment. Equivalent State and Territory legislation also makes it unlawful to discriminate against people with disabilities.

In Western Australia, the Equal Opportunity Act 1984 (WA) governs discrimination on the grounds of impairment, including mental impairment.

The definition of ‘disability’ under the Disability Discrimination Act is broadly defined and encompasses mental illness whether permanent or temporary, past, present or future and actual or attributed.

Discrimination can be direct or indirect. Direct discrimination is where a person is treated less favourably because of their disability. Indirect discrimination, on the other hand, may not be deliberate but has the effect of disadvantaging a person with a disability. For example it may be indirect discrimination to require an employee with a mental illness to meet the general policy to start work at 7am, when their medication means they aren’t alert at 7am.

Failure to make reasonable adjustments for an employee with a disability (including mental disability) may constitute discrimination.


Legislative exceptions

In some cases it may be lawful to discriminate if such actions would impose an unjustifiable hardship or where the person cannot perform the inherent requirements of the position.


Unjustifiable hardship

It may be lawful to discriminate against a person with a disability where the provision of required special services and/or facilities impose an unjustifiable hardship. In assessing whether a requirement to provide special services or equipment is an unjustifiable hardship, it is not simply a case of calculating the cost of provision. The overall resources of the employer will be examined together with the respective benefits and detriment for other employees, potential employees, customers, clients and members of the public.

When considering unjustifiable hardship, the costs and benefits would need to be considered. These would include the financial costs to the employer, the ability of the employer to meet the costs of the adjustments and the benefits or detriments for other employees, potential employees or customers.


Inherent requirements of the position

The inherent requirements of a job include the terms of the contract and the functions performed. It may be lawful to discriminate against a person if that person has a particular attribute preventing them from performing the inherent requirements of the job. (Note: not all requirements of a job are ‘inherent’.)

The employer’s view of the job’s inherent requirements is central. If, however, there is an argument about the inherent requirements, the following factors are relevant to consider:

  • the work required of an employee in the position and comparable positions;
  • requirements during emergencies or periods of peak work load;
  • to what extent is a job requirement about achieving a result rather than a means to achieving a result;
  • under what circumstances is the job performed;
  • what relevance does the industrial award or agreement have;
  • what does the position description say;
  • are there any mandatory requirements imposed by other laws e.g. safety; and
  • what are the market, customer and industrial requirements.


Reasonable adjustments

Employers must consider whether, by implementing a change, the person with the disability could perform the job. Reasonable adjustments are not meant to change the essential requirements of the job or to create a new and different job.

Refer to part 7 on injury management and reasonable adjustments.

An adjustment will not be 'reasonable' if it:

  • would impose an unjustifiable hardship on the employer to implement or provide it;
  • cannot be implemented or provided within a reasonable time having regard for the work requirements;
  • it is required primarily for non-employment related use; and
  • it amounts to changing the essential requirements of the job or creating a new or different job or transferring the person to another job (unless this
  • is part of a training or rehabilitation program reasonable likely to enable the person to perform the job within a reasonable time).

Privacy and disclosure
The Privacy Act 1988 (Cth) (Privacy Act) regulates privacy. The aim of the Privacy Act protects personal information held or handled by large businesses and some small businesses.

The Privacy Act is a federal legislative instrument and has application nationally, regardless of which State or Territory a business is operating in. Federal coverage ensures national consistency in how organisations handle personal information.

The Privacy Act applies to private and public sector organisations as well as those trading for a profit and not-for-profit organisations with an annual turnover of more than three million dollars. Some organisations with a lower annual turnover that are health service providers are also bound by the Privacy Act.



If an employee chooses to disclose that they have a mental illness, this information should generally not be disclosed to others without their consent. Even then, you can usually only use this information for the purpose they disclosed it to you (e.g. to seek some adjustments to their work to deal with their mental illness).

There may be exceptions including, for example, where:

  • the organisation reasonably believes that disclosure is required to reduce or prevent the likelihood of serious risk or threat to the health and safety of the individual or another person(s); and
  • use of the information is required or authorised by law.



Some organisations are exempt from having to comply with the legislation by being excluded from the definition of ‘organisation’. These include small business operators, defined as a business with an annual turnover of

$3 million or less (small businesses that hold health information will not be exempt because the personal information they hold needs to be given a higher level of protection).

Also, the employment records of private sector employers are exempt from the Privacy Act.

The Privacy Act covers the following types of information:

  • personal information;
  • sensitive information;
  • tax file numbers; and
  • credit information.

Worker's Compensation legislation
Each State and Territory as well as the Commonwealth in Australia has separate workers’ compensation legislation.

Workers’ compensation is a statutory, no-fault compensation system for injuries arising out of, or in the course of employment. In Western Australia, employers duties will most likely be governed by the Workers’ Compensation and Injury Management Act 1981 (WA) (WCIM Act), regulations and codes.

Workers’ compensation compliance

  • you must have workers’ compensation insurance for anyone defined by the WCIM Act as a ‘worker’.
  • all employers are required to establish an injury management An injury management system is a written description of the steps to be followed when there is an injury in the workplace.
  • a return to work program is an integral part of any injury management.
  • you are required to develop a written return to work program for the injured worker as soon as practicable when the medical practitioner:
    -advises you in writing that a return to work program should be established for the employee;
    -signs a Certificate of Capacity indicating that the worker has partial capacity to return to work; and
    -signs a Certificate of Capacity indicating that the worker has total capacity to return to work, but for some reason is not able to return to the position held immediately prior to injury.
  • employers must keep an injured employee’s position available (where reasonably practicable) for 12 months from the day the worker is entitled to receive weekly payments.

Under the WCIM Act, injury encompasses both a personal injury or disease arising out of, or in the course of the employment as well as an aggravation of a pre-existing disease.
WCIM Act qualifies the meaning of ‘disease’ to include any “physical or mental ailment, disorder, defect, or morbid condition whether of sudden or gradual development”.
Every claim will turn on its own facts, however psychological injuries or mental stress claims are by nature more complex and of longer duration than physical injury claims.

TIP: SafeWork NSW Tip Sheet 2 and Worksafe WA Fact Sheet ‘A risk management approach to work-related stress’ outline the risk management process in greater detail.

TIP: You (the manager) receive a medical certificate from an employee that states “…unfit for work from 17/5/16 to the 25/5/16 due to work-related stress.” There is no indication a workers’ compensation claim may be pursued. Since the medical certificate has flagged work-related stress, as the employer, you should investigate this further to identify the root cause of the stress; whether it is likely to affect other employees; and how the risk may be controlled.

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All of the following could be considered a workers’ compensation claim:

Scenario 1:

A worker is diagnosed with Post-Traumatic Stress Disorder (PTSD) after surviving a traumatic car accident whilst driving for work purposes.

Scenario 2:

A worker suffers from “stress and anxiety” after being exposed to various work pressures.

Scenario 3:

A worker is known to suffer from depression. Their depression has flared up and they are experiencing an acute episode after being bullied in the workplace.

For advice and guidance on work, health and safety matters contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or email [email protected].

There are various Commonwealth and State legislative instruments applicable to workplace mental health issues.

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