Each state jurisdiction in Australia has regulations in effect governing the management of psychological hazards in the workplace (such as bullying, work demands, poor workplace support, harassment and workplace conflict and violence). These regulations have been made under state work health and safety legislation which imposes a broad positive duty  to ensure, so far as is reasonably practicable, the health and safety of workers in the workplace, which includes psychological health.  Each state  jurisdiction’s regulations require psychosocial hazards in the workplace to be identified, assessed and managed through the implementation of control measures which seek to eliminate or, if that is not possible, minimise those risks, in each case so far as reasonably practicable. Several states also have  enforceable Codes of Practice on managing psychosocial hazards which provide more detailed guidance on managing psychological risks. While there is generally no statutory requirement to maintain a standalone mental health policy, the implementation of  relevant policies is one of a range of expected control measures for psychological risks.

Employees who are not fit for work as a result of a mental health condition may access paid personal/carer's leave under the Fair Work Act 2009 (Cth) (full time employees accrue 10 days per year and unused personal/carer’s leave accumulates from year to year)  Additional unpaid leave may be available under enterprise agreements or company policy.

If the mental health condition was acquired or exacerbated in the course of employment, an employee may also be supported through workers' compensation insurance schemes under which employees may be supported for long periods of time.

An employer may direct an employee to cease work or take leave where there is a reasonable and lawful basis, such as a genuine safety concern for that employee or other employees or if the employee is unable to perform the inherent requirements of the role. The direction must be lawful, reasonable and proportionate.  Where there is only a suspicion, the employer will generally need to initially stand down the employee with pay while they obtain medical evidence to determine the employee’s capacity to work. Decisions in the absence of medical evidence will involve a risk of unlawful disability discrimination, breach of contract or unfair dismissal.  

An employer may direct an employee to attend an independent medical examination where there is a lawful and reasonable basis to do so — for example, a genuine concern about the employee's fitness to safely perform the role. The scope of the examination should be confined to the employee's capacity to perform the inherent requirements of their role.

Australia operates a universal public healthcare system (Medicare) which provides subsidised access to doctors and allied mental health professionals such as psychologists.  Additional coverage for some mental health related services may be covered by  private health insurance. All Australian employers are required to have workers compensation insurance in accordance with statutory requirements. This insurance may pay for treatment and provide lost income compensation where the mental health condition is work-related and not otherwise excluded.

Mental health conditions can be classified as work-related injuries or diseases under workers' compensation insurance. To succeed in a claim, the employment must generally be a "significant contributing factor" to the condition. Claims may be excluded if they arise from reasonable management action taken in a reasonable manner (e.g. performance management, disciplinary action conducted in a reasonable manner).

Mental health conditions are recognised as a "disability" under the Disability Discrimination Act 1992 (Cth) and equivalent state/territory legislation.  Employees may therefore be entitled to protection from discrimination and may qualify for disability-related benefits. Employees with mental health conditions may also access the Disability Support Pension or the National Disability Insurance Scheme in certain circumstances.

(i) An employer may terminate the employment of an employee with a mental health condition if the employee cannot return to work because the employee is unable to perform the inherent requirements of the role and there is no reasonable adjustment the employer could make that would enable them to do so if all applicable protection periods have elapsed. An employer is prohibited from terminating the employment of an employee who is temporarily absent as a result or illness (including mental illness), being  for a period of up to 12 weeks (or a series of periods which total 12 weeks over a 12 month period) or such longer period as they remain on paid personal/carer’s leave.  State workers’ compensation legislation also prohibits termination of employment of an employee with a work related illness because of that illness within specified protection periods ranging from 6 to 12 months .

(ii) An employer may  terminate the employment of an employee with a mental health condition for performance or conduct reasons or because the role is no longer required provided that the decision does not amount to direct or indirect discrimination on the basis of the employee’s mental health condition and, to the extent that the employee has unfair dismissal rights, the reason for termination is valid and a fair process is followed prior to termination. 

Legal risks in either case include claims under Commonwealth or state/territory Anti-Discrimination legislation, the General Protections provisions of the Fair Work Act 2009 (Cth) (concerning temporary absence and disability discrimination).  the protection provisions of state/territory workers compensation legislation and, in respect of some employees, the unfair dismissal jurisdiction in the Fair Work Act 2009 (Cth).

Employers must keep employee medical information confidential and restrict access to those with a genuine need to know. The Privacy Act 1988 (Cth) employee records exemption exempts private sector employers from complying with certain privacy obligations in relation to employee records where the act or practice is directly related to the employment relationship. However, employers remain subject to state/territory health records legislation, duties of confidentiality implied into the employment relationship, and practical obligations arising from anti-discrimination and WHS laws. Records should be stored securely with restricted access.

Yes. Under the Disability Discrimination Act 1992 (Cth) and equivalent state/territory legislation, employers must make reasonable adjustments for employees with a disability (including mental health conditions) unless doing so would impose an unjustifiable hardship on the employer. Examples include: flexible working hours, modified duties, additional breaks, remote work arrangements, or phased return-to-work plans.

Mental health conditions are protected under disability discrimination laws at both Commonwealth and state/territory level. Discrimination includes: less favourable treatment because of the condition (for example a decision not to promote, to pay less or to dismiss) ; failure to make reasonable adjustments; harassment; and adverse action (under the Fair Work Act 2009 (Cth)) taken because of the employee's physical or mental disability. Both direct and indirect discrimination are prohibited.