01 Nov 2013

Unfair dismissal for mental illness

by Michael Byrnes

The management of employees with illness or injury is often a vexed issue for employers, with a range of competing considerations that need to be balanced.

A recent decision of the Fair Work Commission has highlighted the significant challenges and risks facing employers when seeking to terminate employees suffering from mental illness.

In Applicant v Respondent [2013] FWC 7421, Commissioner Ryan of the Fair Work Commission found that a public health institution had unfairly dismissed an employee from his audio-typist position on the basis of his mental illness.

Given the particular circumstances of the proceedings, including the discussion as to the Applicant’s mental capacity to work, Commissioner Ryan determined that the identity of the Applicant and the Respondent would not be made public.


Following repeated complaints received from other employees in relation to what they described as “weird’’ and “disturbing” emails sent by the Applicant, the Respondent's Employee Relations Manager met with the Applicant on 16 March 2013.

The Applicant was asked whether he would be willing to undertake a psychiatric assessment to determine what, if any, condition he suffered from, what capacity he had for work and what steps, if any, he could take to safely return him to the workplace. The Applicant agreed.

On 26 March 2013 the Respondent received a copy of the independent medical report prepared by Associate Professor Peter J Doherty, consultant psychiatrist at the Melbourne Clinic. Associate Professor Doherty concluded that the Applicant had a disorder of the mind, being paranoid schizophrenia, and that he was not attending a psychiatrist and was not taking medication for the condition.

Associate Professor Doherty further stated that the Applicant did not have a current capacity for work and that he would be an unreliable and inconsistent worker, engage co-workers in mistaken beliefs about himself, and there was a strong potential that he would be disruptive in the workplace.

Significantly, in answering the third question of his brief: "should any conditions be imposed on the worker to facilitate his return to work?", Associate Professor Doherty stated:

"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.”

On 28 March 2013 the Respondent met with the Applicant and advised him that his employment was being terminated on the basis of the psychiatric report and his previous conduct regarding the Applicant's sending of inappropriate emails to co-workers.

On 3 April 2013 the Respondent wrote and delivered a letter to the Applicant which identified the outcome of this meeting as follows:

“In the most recent meeting of the 28th March 2013 and following your visit to the psychiatrist, a copy of the report prepared by the psychiatrist was provided to you. Given the information in the report, and your repeated assertion that key managers were ‘‘lying to you” together with your lack of insight/understanding concerning the damaging nature of your behaviour and communications within the organisation, it was felt that (the Respondent) had no option but to terminate your employment.”

Reason for Dismissal

Both the Applicant and the Respondent agreed that the Applicant suffered from a mental disorder but disagreed on the nature of that mental disorder. The Applicant contended that he suffered from Autism Spectrum Disorder and the Respondent contended that he suffered from paranoid schizophrenia.

In a written Outline of Argument filed on 1 August 2013 the Respondent identified its reason for dismissal as:

“The Doherty Report confirmed (the Applicant) had no capacity for work based on the Diagnosis. Moreover, and consistent with the Diagnosis, (the Applicant) had engaged in misconduct in the workplace that caused apprehended or actual harm to work colleagues.”

Was the termination harsh, unjust or unreasonable?

In assessing whether the termination was harsh, unjust or unreasonable, Commissioner Ryan had regard to s 387 of the Fair Work Act 2009.

The Respondent's Employee Relations Manager identified in his oral evidence that it was the report from Associate Professor Doherty that triggered the decision of the Respondent to dismiss the Applicant:

“That report came back with some issues that we felt were so strong that we could no longer keep him employed in the workplace. The report said he was unemployable and he has got some belief structures that we believe we can’t support in the hospital. You know, an environment where he’s close to patients and close to fellow employees."

Commissioner Ryan was satisfied that the decision to terminate the Applicant was triggered by the Report of Associate Professor Doherty and that such decision was made prior to the meeting of 28 March 2013 with the purpose of that meeting being to simply to advise the Applicant that his employment had been terminated.

Crucially, Commissioner Ryan found that the reason for dismissal relating to the Applicant’s mental disorder and capacity to work did not accord with the opinion of Associate Professor Doherty in that:

"Associate Professor Peter J Doherty did not say that the Applicant had a permanent incapacity to perform work for the Respondent.

Rather, Associate Professor Peter J Doherty described the Applicant as not having a current capacity to work. "

Commissioner Ryan found that the Respondent on its own evidence ignored the advice given by Associate Professor Doherty on the return to work of the Applicant.

In respect of the “weird” and “disturbing” emails allegedly distributed by the Applicant, Commissioner Ryan found that such emails did not disclose a valid reason for dismissal as such behaviour occurred before the Respondent requested that the Applicant be psychiatrically assessed.

Despite the Respondent’s position that the very fact of the inappropriate communications and behaviour constitute a valid reason for dismissal regardless of any underlying condition, Commissioner Ryan noted the lack of any general deleterious effect on the health and safety of other employees arising from the conduct of the Applicant and stated:

"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."

Having considered both of the reasons relied upon by the Respondent and considering all of the relevant criteria, the Commissioner was satisfied that there was no valid reason to dismiss the Applicant and further that the dismissal was harsh, unjust or unreasonable.


The Applicant sought reinstatement with continuity of service and payment of an appropriate sum reflecting lost earnings.

Interestingly, in considering the appropriateness or inappropriateness of reinstatement as a remedy, Commissioner Ryan had regard to the general protection provided to all employees through section 351 of the Fair Work Act 2009 in respect of adverse action.

Commissioner Ryan held that a" fair go all round" supported reinstatement as the appropriate remedy.

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

Commissioner Ryan accordingly required the Applicant to produce to the Respondent a clearance from both a treating psychologist and a treating psychiatrist that he was fit to return to work prior to his return to his employment.

The challenge for employers

The management of employees with illness or injury is often a vexed issue for employers, with a range of competing considerations that need to be balanced. This can particularly be so when mental illness is involved and the symptoms of that mental illness pose a perceived or actual risk to the health and safety of fellow employees.

Employers need to be make sound decisions based on cogent evidence and avoid assumptions, speculation and urban myth. A current diagnosis is important but by no means determinative.

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. General "capacity assessments" will almost invariably not suffice. A bespoke approach needs to be taken, fashioned to the circumstances of the individual case.

This article was first published in the Law Society Journal, November 2013.

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