Australia: Why mental health is a serious issue for an employer

Why Mental Health is an Employer's Issue

Awareness of mental health has been growing and expanding in recent years, with good reason. Last year the Australian Bureau of Statistics reported that around 45% of Australian's between the ages of 16 and 85 will experience a mental health condition at some point in their lives. These statistics mean almost everyone in today's society will either be directly or indirectly affected by a mental health condition, making it a serious problem. But is it an employer's problem?

The answer is an overwhelming yes, mental health in the workplace is an employer's problem and it is a critical part of managing a modern workforce. Not only are employers legally required to ensure the mental health and wellbeing of their employees, but there are also clear economic benefits in doing so.

The Law

Whilst it is well accepted that employers are required to provide a safe, healthy and productive workplace for their employees, what generally springs to mind regarding this is the requirement to ensure the physical wellbeing of their employees. However, the same requirements apply in relation to the psychological wellbeing of employees.

Employers around Australia are required by workplace health and safety (WHS) legislation to ensure, as far as reasonably practicable, that the work carried on by the business does not put the health and safety of workers, or others, at risk. In WHS legislation, 'health' is defined to mean both physical and psychological health.

At common law, employers owe a duty of care to their employees to take reasonable care to avoid any conduct that could be reasonably foreseen to cause harm or injury to the employee. It has been accepted that the employer has a duty towards their employees regarding psychological injuries and this requires employers to take reasonably practicable steps not to cause risk to an employee's mental health.

Mental illness is also classified as a disability under the Anti-Discrimination Act 1977 (NSW) and Disability Discrimination Act 1992 (Cth). Employers are required to make reasonable adjustments in the workplace to accommodate mental illness or else be liable for discrimination.

Failure by the employer to adequately manage and respond to mental health concerns in the workplace can lead to a range of claims by employees including workers compensation claims, claims for damages and disability discrimination claims.

Managing and Promoting Mental Health in the Workplace

Positive mental health is now recognised as affecting more than just our mood, but also impacting our productivity and success. It is no surprise then that mental illness in the workplace is associated with higher levels of presenteeism, absenteeism, and lower productivity. Research suggests there are clear economic and other benefits for employers to promote positive mental health in the workplace as a means of increasing the performance of all staff.

A report published by PWC, Beyond Blue, the National Mental Health Commission and the Mentally Healthy Workplace Alliance, found that on average every $1 used to implement successful mental health action benefits an organisation by $2.30. This was due to the reduced costs associated with high staff turnover, reduced sick leave absences, avoidance of litigation and fines for breaches of WHS laws and greater staff loyalty leading to a higher return on training investment. Also reducing mental health related presenteeism, absenteeism and workers compensation claims, results in more productive hours per year for employees with mental health conditions.

Though this demonstrates the economic benefit of investing in mental health action, the question employers are sometimes faced with is whether it would be quicker, easier and more efficient to just dismiss employees that are perceived to be underperforming, irrespective of the reasons that may underlie these perceptions.

It is important to note that employees may only be terminated from employment if the employee cannot perform the inherent requirements of the role. This consideration is made after any 'reasonable adjustments' are made to assist the employee. An adjustment is only unreasonable if it causes 'unjustifiable hardship' to the employer.

Employers should recognise, therefore, that there is a baseline obligation to support employees that are going through mental issues at work. In any case, it is good business to do so. Apart from being unlawful under the Fair Work Act 2009 (Cth) to terminate someone because of their mental health, and opening the employer up to a disability discrimination claim, the cost of performance managing employees with mental health conditions, advertising the role, and then training the new employee would likely far outweigh the cost of promoting a mentally healthy workplace, particularly given how many people suffer from mental health conditions.

Closing Thoughts

No two employees are the same and supporting their mental wellbeing can be a challenge for some managers and employers. It is essential that employers understand the scope of their duty and legal obligations and to ensure that the tools and support that are necessary to meet these obligations are in place.

When promoting positive mental health, workplace culture really does matter. In addition to complying with their legal obligations, there are clear benefits for employers in promoting a mentally healthy workplace. If employers can provide healthy workplaces and assist in addressing this issue, employers will have a happier more productive workplace, employees will be better equipped to manage their mental health, and society as a whole will likely be better off.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.