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Mental health in the workplace

By CCIWA Editor

A health issue that can significantly affect how a person feels, thinks, behaves and interacts with other people. This may include mood, anxiety or psychotic disorders.

According to the Australian Human Rights Commission:

  • Mental illness is one of Australia’s biggest health problems – surpassed only by heart disease and cancer.
  • Around 45 per cent of Australians aged between 16 and 85 will experience a mental illness at some point in their life
  • 1 in 5 Australian adults experience mental health problems at some point in their life.
  • Nearly half of all senior managers do not believe their workers will be affected.
  • 1 in 5 workers take time off each year for stress.
  • Stress-related worker’s compensation claims have doubled in recent years and cost over $10 billion each year.
  • Many people who have a mental illness and are being treated recover well or even completely.

Employers are legally obliged to provide a safe and healthy workplace that does not cause or aggravate illness or discriminate against people with disabilities.

Employers must be prepared to make ‘reasonable adjustments’ to assist workers who suffer from a mental illness and to ensure information about an employee’s mental health is not disclosed to others without their consent.

What is mental illness?

The Mental Health Act 1996 defines mental illness as a disturbance of thought, mood, volition, perception, orientation or memory that impairs a person’s judgment or behaviour to a significant extent.

Legal obligations

Employers and employees must meet their legal obligations under the Occupational Safety and Health Act 1984 and Regulations 2009 in relation to safety and health at work.

Although the provisions of this legislation do not explicitly refer to employee exposure to work-related mental illness, employers have a general duty, as far as practicable, to provide safe systems of work, information, instruction, training and supervision to enable employees to perform their work so that employees are not exposed to hazards.

Employees also have a general duty of care to ensure their own safety and health and to avoid adversely affecting the safety and health of others.

Developing mental health strategies for the workplace

Workers may develop mental illness prior to or during employment. An ‘unhealthy’ work environment or workplace incident may contribute to or exacerbate the development of mental illness. While many workers may successfully manage their illness without it impacting on their work, some may require support during a certain period or ongoing workplace strategies.

Developing a mental heath strategy is one way to ensure that employers meet their obligations and take appropriate steps to identify and minimize or eliminate workplace practices, actions or incidents which may cause or contribute to mental illness, support workers with mental health problems and build a safe working environment.

These strategies should be integrated into a broader occupational health and safety policy.

Developing a strategy which seeks to improve employee health and develop a safe and healthy workplace may in turn:

  • reduce the costs of absenteeism and high turnover
  • encourage staff loyalty
  • minimise stress and improve morale
  • meet legal obligations in terms of health and safety laws
  • ensure personal information about a worker’s mental health status is not disclosed without the worker’s consent;
  • avoid discrimination and workers’ compensation claims
  • avoid industrial disputes.

Performance management

An employee may perform poorly for various reasons. One reason for poor performance may be that the employee is suffering from a mental illness. In this instance, if the poor performance is not addressed promptly, it may become more serious over time and affect the productivity and performance of the entire workplace.

Underperformance or poor performance may include:

  • Unsatisfactory work performance – failure to perform inherent duties or requirements of the position or a failure to perform these duties at the standard required.
  • Non-compliance with workplace policies, rules or procedures.
  • Unacceptable behaviour in the workplace.
  • Disruptive or negative behaviour that impacts on co-workers.

Note: Underperformance is not the same as misconduct. Misconduct is poor behaviour that can be minor or very serious such as theft, fraud or assault which may warrant instant dismissal. In the case of serious misconduct employers should seek further advice from CCI before taking action.

Performance managing an employee who may be suffering from a mental illness

There is no legal obligation for an employee to disclose information about a mental illness. However, in situations where it is evident that an employee is not coping, an employer may consider ways to assist the individual in improving their performance. It is important that employers remain solutions focused, rather than focusing on the problem, when seeking to improve the employee’s performance.

An employer is entitled to apply standard performance management procedures where there is a legitimate concern about the employee’s performance. When issues concerning underperformance are not addressed and not managed both appropriately and sensitively it may lead to unhealthy and unproductive outcomes that could affect the entire workplace.

Performance management: what if the employee discloses that they have a mental health issue?

When a mental health issue is disclosed, an employer may consider ceasing the performance management process and dealing with the issue in a more supportive and sensitive manner.

It may be appropriate to discuss with the employee how they see their illness affecting their work and performance. This may include seeking information from a medical practitioner to determine if their illness has reduced their capacity to work and/or if their illness is impacting their performance. The employer may then consider and explore work adjustments that may be made without compromising the core responsibilities of the position. It may also be appropriate to warn an employee that if their performance issues cannot be resolved or reasonable adjustments made or that these adjustments do not work, then the issue will be revisited as a performance concern.

In developing a solution or reasonable adjustment an employer should objectively assess:

  • the inherent requirements of the employee’s role
  • the employee’s skills and abilities – where possible consider medical advice or recommendations
  • consult with the employee.

Reasonable adjustments

When an employer is looking to introduce an adjustment for an employee who may be suffering from a mental illness, employers should consider what adjustments or changes may be made to the working environment to enable the employee to perform their duties more effectively. These may often be simple, low cost adjustments.

A reasonable adjustment should not cause an employer ‘unjustifiable hardship’ – in determining if the adjustment is reasonable an employer should consider:

  • the benefit or detriment to the employee
  • any benefit or detriment to others affected by the adjustment
  • the effect of the mental illness
  • the cost of the adjustment and the employer’s financial position
  • the availability of financial or other assistance to the employer in making the adjustment.

Adjustments should ideally be tailored to each individual to meet the particular needs or issues of the employee. Examples of a reasonable adjustment may include:

  • Offering flexible work arrangements. For example, job share or job rotation, flexible start and finish times.
  • Changing some aspects of the job or work tasks. For example this may include exchanging a single demanding project for a job consisting of a number of smaller tasks.
  • Changing the workplace or the employee’s work area. This may include moving the employee to a quieter work area.
  • Purchasing or modifying equipment. For example, suggesting the use of a personal diary to keep track of tasks or deadlines.

Minimising mental health issues at work

There are number of tips employers may engage to minimize the incidence and effect of mental illness in the workplace.

  • Train staff to recognize signs and symptoms of work-related stress or mental health problems.
  • Counsel employees if their work performance is being negatively affected by work-related incidences or external sources of stress or anxiety.
  • Encourage employees to express their feelings about factors that may be impeding their job performance.
  • Respond quickly to employees experiencing work-related mental health problems.
  • Encourage employees to seek further advice and assistance from either the company’s Employee Assistance Program (EAP) counsellor or a private counsellor specialising in mental health or work-related stress.
  • Support employees expressing a wish to visit their general practitioner for advice and treatment.

Employee assistance programs

As suggested above, employee assistance programs (EAP) may be useful in the management of staff that may be suffering from a mental illness. EAPs are the first point of contact for employers wishing to refer employees with problems arising from work-related and external sources of stress and anxiety. EAPs generally offer confidential counselling, advice and assistance (usually funded by the employer) for work-related stress, mental health, alcohol and other drugs and bereavement issues.

EAPs may also offer additional services, such as assisting employers in introducing stress management training or stress intervention programs. These stress management training programs may include, but are not limited to, improving stress recognition skills, skills training in time management, assertiveness, problem solving and coping and even personal or group counselling sessions and healthy lifestyle information workshops and/or programs.

Further information regarding EAPs and particular providers in your area may be found at the website of the Employee Assistance Professionals Association of Australia at

Workers compensation

Although the number of work-related mental illness claims is relatively small, the average cost and duration of claims is extremely high. Employees can seek workers’ compensation for work-related mental illness if an employee incurs medical expenses or requires time off work due to an illness or injury sustained through work.

However, stress claims are generally not admissible if the stress has arisen wholly or predominantly from industrial matters such as dismissal, retrenchment, demotion, disciplinary action, transfer, redeployment or not being promoted, reclassification or being granted leave of absence, or any other benefit in relation to employment. Stress claims based on industrial matters may be successful if the employer’s actions were determined as unreasonable and harsh. Given the complexity of mental illness claims, employers should consult closely with their insurer regarding liability for industrial-related stress claims.


An employer must not terminate or take other adverse action against an employee because of that employee’s mental disability. This is due to the fact that employees are protected from discrimination under the Fair Work Act 2009. Employers should be careful when managing an employee with a mental illness and avoiding opening themselves up to potential general protection claims.

General Protections claims can result in uncapped penalties being awarded to the employee and potential fines for employers of up $63,000 and for individuals of up to $12,600 for breaching the Fair Work Act 2009.

Our Employee Relations Advice Centre can provide information and advice to members relating to managing employees who may be suffering from a mental illness. Contact  (08) 9365 7660 or email [email protected].

A health issue that can significantly affect how a person feels, thinks, behaves and interacts with other people. This may include mood, anxiety or psychotic disorders.

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