When can you dismiss an employee who has a mental illness?

John Hilton
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An employer can terminate an employee who has a mental illness when the illness is impacting their ability or their capacity to do their job, and when they’ve found that it’s apparent the situation will not likely to improve, according to Sherridan Cook, partner at Buddle Findlay.

Cook told HRD that it’s similar to a medical incapacity termination which is usually based on a physical incapacity to be able to do the job, the prognosis for which is showing they’re not going to be back at work and are unable to complete their full duties in the near future.

“With mental illness it’s less likely to be as clear cut because the illness may affect them in different ways,” said Cook.

“It could be at the extreme end, when they’re not at work for a prolonged period of time because of the mental illness and they are not likely to return in the near future and so you could terminate at that point.

“But often with mental illness it is more intermittent and may affect them sometimes and other times they may be fine.”

Cook added that employers need to be talking to the employee about what the concerns are, including how the mental illness is impacting their ability to turn up to work and do their job, what medical evidence there is or reports about their prognosis, and how it can be managed.

Moreover, it’s important to look at how you as an employer can change the way they do their duties or put them in another role which allows them to better manage their mental illness.

“You also need to be mindful of whether the mental illness constitutes any form of disability, such that you may be discriminating against them under the Human Rights Act or the Employment Relations Act,” said Cook.

“So, there is a significant process that you would need to go through in order to reach the position to terminate.”


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