Mismanaging employees who are stressed or suffering mental impairment could leave employers open to legal action.
Stress is now among the most challenging legal issues for employers and missteps can easily result in a discrimination or unfair dismissal claim. Stress-related issues are difficult for employers to manage because stress itself is not easily identified. For example, employees can’t simply have a blood test to prove they are stressed out.
Most employers prefer to handle illnesses and injuries that are black and white, like a broken arm. When the problem is obvious, accommodating the injury is straightforward. Stress impairments, on the other hand, are open to interpretation. We often see varying assessments from psychologists or psychiatrists who may disagree on an individual’s mental condition.
Stress and the law
It’s little wonder that stress features prominently in many unfair dismissal and discrimination claims. Other legal avenues can also be explored in relation to stress based cases such as common law damages (for example, claiming the injury was caused by negligence) and via adverse action. But unfair dismissal and discrimination pose the greatest risks for employers regarding stress impairments.
It’s not impossible for employers to dismiss an employee due to a stress impairment, but it is riskier. Any flaw in your policies and procedures around managing stressed employees will be tested. Generally, employers who are fair-minded, who do everything they can to look after and accommodate the employee, as well as follow the right steps, will be well positioned if and when they face legal claims.
Follow these steps to help protect employees and minimise stress-related legal claims:
1. Identify the “inherent requirements” of a role
These should be set out in employment contracts, often as a job description. Be careful about avoiding generic descriptions – they need to be specific and detailed. This is important when evaluating whether an employee can fulfil a job’s inherent requirements, and where employers need to defend a claim.
2. Obtain information about the condition
Employers need as much information as possible about the condition the employee is suffering. If an employee has presented you with a vague, one-line certificate from a doctor, it’s not unreasonable to ask for more information. As an employer, you have a duty of care to ensure the health and safety of that employee as well as others working alongside them.
3. Consider reasonable adjustments
Are there any adjustments that can be made to an employee’s job that will accommodate their impairment and allow them to continue performing in their role? If the adjustment is “reasonable” (which may involve a cost benefit analysis), then it should be made. However, if it will impose an unjustifiable hardship on the employer, then it doesn’t need to be made.
For example, an employee suffering from stress may request flexible working arrangements, perhaps asking to work from home two days a week. That may well be a reasonable adjustment if the organisation caters for a remote and mobile workforce. But if that same employee is the Chief Executive Officer, whose ‘client facing’ duties are an inherent requirement of their role, then it’s arguable that such an adjustment would not be reasonable.
4. Consultation and good communication is a critical step
Employers should consult widely, not just with the employee, but also with any rehabilitation providers and medical experts, including the union where applicable. Employers may also need to notify their insurer.
5. Consider leave entitlements
Employers need to beware of the “temporary absence” laws in the Fair Work Act, which prohibit the termination of an employee who is off sick from work but still has some paid sick leave left up their sleeve. Any decision to terminate should wait until the employee has exhausted all of their paid sick leave, and if your workplace has a policy for unpaid leave, then that should also be considered before any termination occurs.
Felicity Clarke is a special counsel at Hall & Wilcox.
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