Employer's obligations for mental health and wellbeing

Unsurprisingly, mental health and wellbeing across our workforces have been (and will continue to be) affected after three years of the COVID-19 pandemic. Sianatu Lotoaso explores the critical role employers play when it comes to mental health and wellbeing.

While COVID-19 is a relatively new phenomenon, what is not new is our courts have recognised that employers have a duty of care to provide employees with a safe work environment. As such, employers should understand the critical role they play, as an employer, when mental health and wellbeing issues arise in the workplace.

Specifically, when mental health issues arise in the workplace, an employer is obliged to investigate, identify the issues and risks, and look to eliminate or at least minimise these. This is a proactive obligation. Employers have a responsibility to take notice of potential hazards in the workplace and act to address them, rather than working until damage actually occurs. Failing to do so could result in expensive legal claims for unjustified disadvantage, breach of contract and/or constructive dismissal.

Case law

Attorney-General v Gilbert remains the leading decision regarding mental health issues in the workplace and specifically work-related stress. Gilbert was a probation officer who was required to take on a disproportionately substantial number of difficult cases, and had an excessive workload, including the supervision of serious criminals. He became increasingly exhausted, despondent, unwell, suffered severe cardiac problems, and was found to be significantly disabled because of his employer’s actions.

Gilbert resigned on medical grounds. He successfully raised breach of contract and personal grievance (constructive dismissal) claims in the Employment Court. The Court ordered his employer to pay $297,966 in lost wages from the period of his dismissal to the date of the hearing, lost wages for the rest of his working life, and $50,000 in exemplary damages.

On appeal, the Court of Appeal confirmed that “harm” and “illness” are not limited to “recognisable psychiatric injury”, and it would be contrary to the objects of the Act if an employer was not required to take steps reasonably practicable for it to take to avoid causing psychological harm.

Critically, the Court held that employers are required to take “all reasonable steps to prevent harm to an employee which foresaw or reasonably foresaw or ought to have reasonably foreseen at the time”; and this duty is now implied in common law into employment contracts, in recognition of their special nature.

The Court also noted that an “employer does not guarantee to cocoon employees from stress and upset”, and their obligations will vary according to the circumstances. Further, the “contractual obligation requires reasonable steps which are proportionate to known and avoidable risks”.

Case law confirmed

More recently, in 2019, the Employment Court in FGH v RST confirmed the Gilbert decision. H worked for a government department, and throughout her employment there were performance concerns. Over the years, she informed RST she was suffering from anxiety, and was diagnosed with attention deficit disorder. In October 2015, RST put H on a performance management plan after various concerns arose. By December 2015, H’s behaviour had started to drastically change, including having outbursts and behaving aggressively towards RST. Following another outburst by H, RST commenced a disciplinary process against her.

H successfully raised an unjustified disadvantage personal grievance on the grounds that RST had failed to provide a safe work environment when dealing with her performance issues, which subjected her to unwarranted stress.

The Court held that, because the process was causing H mental distress, RST had a responsibility to seek further medical advice about the appropriateness of continuing with the performance process, given it was aware of H’s medical conditions. In applying Gilbert, the Court held it was entirely foreseeable that continuing with formal performance and disciplinary processes, following H’s outbursts, would result in negative reactions because of her known mental health conditions.

While employers are not expected to ‘cocoon’ employees, or wrap them in cotton wool, once put on notice that an employee is struggling, an employer should not carry on business as usual. Even if the employer did not see it coming, if an employee does suffer from a heightened emotional response or breakdown, it should not be ignored.

Sianatu Lotoaso is an Associate at Dundas Street Employment Lawyers. Sianatu provides advice on all aspects of employment law and the employment relationship. Sianatu regularly provides advice to a range of clients in the public and private sectors.