The need for sound decisions – Unfair dismissal and mental illness

A recent decision of the FWC found that a public health organisation had unfairly dismissed an audio-typist based on his mental illness. The case highlights the need for employers to make informed decisions based on rational evidence when dealing with employees who may be affected by a mental illness.

The Facts

The employer received numerous complaints from other employees regarding emails described as “weird” and “disturbing” by the employee. The employee agreed with the organisation’s relations manager to undergo a psychiatric evaluation. The organisation received an independent medical report which diagnosed the employee with paranoid schizophrenia and advised that he did not have a current capacity for work. The employee was terminated on the basis of the report and inappropriate conduct.

What the Commission held

The Commissioner found that the employee’s dismissal was unfair. Commissioner Ryan held that the psychiatric report was not sufficient to terminate the employee because the doctor had not stated that the employee was permanently incapacitated. He further stated that the organisation had ignored the expert evidence on the possibility of the employee returning to work at some stage and failed to explore these options.

In regards to the inappropriate emails, the Commissioner held this was an insufficient reason to terminate the employee because the conduct had occurred prior to the medical assessment and when the employee was unaware of his illness. It was also not serious enough to warrant dismissal.

It was ordered that the employee be reinstated provided that he produced medical evidence that he was fit to return to work.

Lessons to be learnt

The case shows that generally a basic capacity assessment will not be enough to validate a termination. It also serves a reminder that misconduct must be of such a nature as to amount to dismissal.

Making sound decisions

Employers need to make sure they obtain independent evidence and carefully assess situations involving employees that may be affected by mental illness. To ensure sound decisions are being made employers should:

  1. Obtain independent medical reports or assessments;
  2. Thoroughly assess any other conduct by the employee that may be of concern and the independent evidence obtained;
  3. Avoid assumptions and speculation;
  4. Seek further consultation, either internally or externally, if necessary
  5. Assess any potential risks to the health and safety of other employees.


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