Monday, 24 July 2017

Handle with Care: Managing (and terminating) employees with mental health issues

Case Study: Finnegan v Komatsu Forklift Australia Pty Ltd [2017] FWC 2433

Mr Finnegan was a customer service supervisor for Komatsu. In March 2016, he commenced a period of sick leave due to a mental health condition. From March to October 2016, Mr Finnegan provided medical certificates to Komatsu stating he was not fit to perform any work. Komatsu could no longer hold Mr Finnegan’s position indefinitely and provided Mr Finnegan with multiple opportunities to demonstrate his fitness for work. Mr Finnegan failed to provide the requested medical evidence of his fitness for work and did not return to work. Ultimately, Komatsu terminated his employment in November 2016.

Mr Finnegan made an unfair dismissal application. The Commission held that the dismissal was unfair despite finding that Mr Finnegan was unable to return to work due to his mental health condition.

The Commission criticised Komatsu for not receiving information from the employee’s medical practitioners and for not meeting with the employee in person to discuss the possibility of his return to work. The Commission commented that the reason for the termination was therefore not clear and noted that dismissal via email of an employee suffering from mental illness was inappropriate.

In the decision, the Commission provided guidance for employers and stated, “Employees are not like other resources that an employer utilises in the operation of its business. Employees are human beings, they can be easily damaged, and when faulty they should be handled with more care than machines.” The Commission recommended that employers “provide fundamental support and understanding for an employee experiencing mental health difficulties”.

Despite making this finding, the employee was only awarded 1 week compensation – due to his evident incapacity to perform the role.

Lessons for Employers

When employers are considering terminating an employee’s employment, they should keep comprehensive notes of reasons for the decision and any steps taken in managing the process.

Employers should ensure that an employee’s employment is terminated for a valid reason and that reason is clearly communicated to employees. Further, employers should ensure that employees are afforded procedural fairness by being given genuine opportunities to demonstrate their fitness for work.

In this specific instance, the Commission considered it would have been appropriate for the employer to proactively seek the requested medical evidence. However, this will not always be the case.

HR Legal frequently works with employers to develop strategies to manage challenging employees and the risks associated with termination of their employment. Please contact us if you would like assistance in relation to these areas.


This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.

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