Can an employer terminate an employee for mental health issues?

The answer is yes. But it comes with a lot of safeguarding regulations against abusive dismissal and discrimination.
As always, when we explore topics that have to do with the law, we can only advise that each employer apply the regulations of the country they are in and do the proper research to make sure they are following the right protocol, as this is such a sensitive subject.
This is also a situation that demands a lot of empathy and sensitivity from the employer’s perspective.

How to try and avoid dismissal for mental health issues

The key is to be able to identify the issue as early as possible for the best chance of avoiding dismissal. If we do not see or ignore the problem for lack of knowledge, empathy, time, or any other reason, it will be harder to come up with a solution in the future. Mental health issues symptoms are numerous and can vary greatly from person to person, but changes in behaviors, withdrawal, unusual repeated absences, or tardiness should send warning signs.
Ideally, with this in mind, a company would provide:
  • a safe environment in which team members would feel welcome to share personal struggles 
  • trained managers who are not only able to identify mental health issues in their team members but are also prepared to have those conversations and know where to direct them
  • Mental health support services and tools for the whole company to de-stigmatize mental health issues and play a preventive role.

When can you dismiss an employee for mental health issues?

A few specific situations can justify a dismissal for mental health issues:
  • in case of safety concerns or breach of company policy
  • the duties are heavily impacted or cannot be performed at all 
  • if the employee fails to engage in the process to try and accommodate them 
In any case, as an employer, you have to prove that you exhausted all attempts to find solutions together with the employee. 

Employee’s rights and obligations 

Employees have clear rights regarding their mental health.
It is important to understand that they have no obligation to disclose their mental health issues at work. Employers are usually not allowed to ask about the health of potential employees during the interview process. So it is up to the employee to share this information, whether later on or as they emerge.
If they do decide to open up to their managers or HR, they should not be discriminated against because of it and be able to benefit from medical leave and reasonable adaptation (time, work setup, etc.).
A certain level of confidentiality should also be respected. However, a manager may need to share the information with HR to best address the situation and support the employee. In this case, the manager should always speak with the team members first before sharing any sensitive information about their mental health.

Best practices for employers in terminating for mental health reasons

As we saw above, it is a very sensitive situation, and the employer should follow strict rules to avoid any litigation, as we’ll explore below.
To be able to prove that all options have been explored and no satisfying solution has been found the employee needs to be able to show that they have:
  • sat down with the employee to better assess the situation
  • asked to investigate the condition with the help of a health specialist 
  • offered accommodation and reasonable adjustment, that they have assessed and investigated the condition 
  • kept the position open for the employee as long as possible during their leave 
In general, only when all of this has been attempted can HR start contemplating a termination.

Legal risks in case of unfair dismissal for mental health issues 

If employers fail to prove they have respected the anti-discrimination law or other regulations in their dismissal of an employee with mental health issues, they can face several claims.
  1. Discrimination claims. The employee will try to prove they have been treated unfairly due to their condition. 
  2. Retaliation claims. That occurs when the employee voiced to management that they felt treated unfairly and suffered retaliation from such a claim afterward (intimidation, demotion, etc.)
  3. Wrongful termination claims 
  4. Legal costs and damages
All very costly and lengthy processes that also deviate focus and can cast a shadow on the reputation of the company. 
Dismissal for mental health issues can go on for several months and should not be rushed.
They are complex and emotionally draining cases for both parties and the rest of the team.
That is why prevention through open communication, management training, and support services should be at the top of the priority list for HR in particular and companies in general.