Fiona McMillan, Partner at Lane Neave discusses what the golden standard is to managing mental health in the workplace. She explores recent case law form the Employment Relations Authority, including Ellish v Network Service Providers Limited [2020] NZERA 255, FGH v RST [2018] NZEmpC 60 and more.
The Health and Safety at Work Act 2015 states that a “person conducting a business or undertaking” (i.e. the employer) has a duty of care to ensure (among other things), so far as is reasonably practicable, the health and safety of its workers. The key phrase to note is “so far as is reasonably practicable”.
Recent case law from the Employment Relations Authority (Authority) has reflected an increasing recognition that, when it comes to health, the mental is just as important as the physical. The Authority has been directing employers to commit to high standards when working with employees who are experiencing struggles with their mental health, and those who fail to pass this test will be hit with hefty costs.
Termination in a mental health context is ripe with risk. As the cases below demonstrate, there is a right way to do it – but plenty of wrong ways too.
The Right Way
Ellish v Network Service Providers Limited [2020] NZERA 255
Mr Ellish was not meeting his required sales targets. The prospect of performance management was discussed with his employer, but in light of Mr Ellish suffering high amounts of stress from his underperformance, the parties decided performance management would be too much – Mr Ellish preferred to leave by choice.
The employer went above and beyond in providing Mr Ellish with extra benefits towards the end of his employment: he was permitted to take annual leave in advance, seek alternative work during the remainder of his employment and his termination date was set beyond his original contractual period.
The Authority deemed the employment relationship ended by way of mutual consent as a result of good faith negotiation, and Mr Ellish’s application for unjustified dismissal was accordingly denied.
The Wrong Way
FGH v RST [2018] NZEmpC 60
Ms H successfully established a disadvantage grievance on the basis that her employer RST had used a performance management process, and then a disciplinary process to control what they viewed to be ‘poor behaviour’, when her behaviour was in fact due to her known mental health conditions.
Early in the performance management process, Ms H advised RST that she had an attention-deficient disorder and an anxiety disorder. In response, RST implemented additional support measures during the performance management process, including EAP assistance, time off to attend the gym, a desk move and support from RST’s business coaches.
The Court recognised that RST held the genuine belief that it was providing Ms H with a safe workplace and mitigating any stress caused by the performance management process. However, these measures were insufficient, as Ms H’s anxiety had only worsened as a result of the ongoing process.
HST v KAG [2020] NZERA 33
HST suffered from anxiety and depression. Her conditions were exacerbated by:
- Her employer KAG’s management style, which was aggressive and confrontational;
- HST’s role being changed several times over six months; and
- an inconsistency in expectations, caused by a disconnect between her manager and the CEO.
HST eventually resigned and raised a personal grievance for constructive dismissal.
The Authority determined that it was reasonably foreseeable that an employee might resign in response to aggressive and intimidating performance management, particularly where the employee was suffering from anxiety: “…there appeared to be no thought of how HST, suffering from anxiety and performing poorly at work, might respond to receiving two rather blunt and somewhat threatening emails from management… the CEO being critical of HST’s billing and budget performance when work had been removed from her to help her cope with anxiety and provide her with more time to understand how to manage her files is inexplicable.”
The constructive dismissal claim failed only because HST did not cite poor management as a reason for her resignation.
Lessons Learnt
- Maintain confidentiality. The Authority will not look kindly on employers who divulge sensitive information about employees who are experiencing an illness.
- If the employer knows, or the employee has explained that they are underperforming due to underlying mental health problems, do not treat it as a performance or disciplinary issue, or attempt to remove an employee for non-genuine reasons such as a redundancy.
- Be proactive and communicative. Check in on a regular basis and ask how you can help – don’t make the mistake of presuming you know the solution and unilaterally imposing changes. Make sure these communications are well documented.
- Remind your employees that they can access employee assistance programmes at any time. If you can, offer to subsidise extra sessions.
- Accommodate the employee’s needs to the best of the business’ abilities. This could look like flexible scheduling, permitting the employee to work from home or adjusting the employee’s duties with their consent.
- Review your workplace policies and processes. Eliminate hazards such as lack of role clarity, workplace disconnect and unrealistic targets. Be aware that performance management processes may worsen an employee’s mental health condition, and that this is not necessarily counteracted by additional support measures.
Fiona McMillan is a Partner of the employment law team and commenced her career with Lane Neave in 2007. Fiona specialises in assisting employers with all employment law related advice including collective bargaining, independent external investigations and human rights commission matters.
Fiona has built strong relationships with a number of different industries, including corporate, tourism, the bus and coach industry and manufacturing. Fiona has a hands on style of practice which involves working in a business as opposed to working alongside it.
Fiona regularly presents seminars to clients, industry bodies and at conferences.
