Mental Health and Employee Dismissal: A Guide for Employers
Supporting employees with mental health issues is one of the most important – and often challenging – responsibilities for today’s employers. As mental health awareness grows, so too does the need for clear, practical guidance on how to handle sensitive situations, especially when they may lead to disciplinary action or dismissal. This guide is designed to help UK business owners and managers navigate the complexities of employment law, employee wellbeing, and fair process when mental health concerns arise in the workplace. We’ll walk you through your legal obligations, best practices, and actionable steps to ensure you support your team while protecting your business.
Key Takeaways
- Mental health is treated equally to physical health under UK law; discrimination is prohibited and reasonable adjustments are required.
- Early, empathetic intervention and clear documentation reduce legal and reputational risks.
- A fair capability process involves investigation, supportive meetings, review periods before considering whether dismissing an employee.
The Legal Framework
Equality Act 2010
Under the Equality Act, a mental health condition counts as a disability if it has a substantial, long-term effect on daily activities. Employers must not discriminate and must make reasonable adjustments, such as flexible working or amended duties.
Employers must not discriminate against employees whose mental health conditions qualify as disabilities – meaning the condition has a substantial, long-term impact on daily life. In these circumstances, employers are required to make reasonable adjustments to support them at work.
Employer Duties Under the Equality Act
Employers must not discriminate against employees with qualifying mental health conditions. This includes:
- Direct Discrimination: Treating someone less favourably because of their mental health.
- Indirect Discrimination: Applying policies or practices that disadvantage those with mental health disabilities, unless justified.
- Failure to Make Reasonable Adjustments: Employers are legally required to make reasonable adjustments to remove or reduce workplace disadvantages for disabled employees. Examples include:
- Flexible working hours
- Adjusted duties or workload
- Additional breaks
- Remote or hybrid working options
- Access to mental health support or quiet spaces
Adjustments should be tailored to the individual’s needs and reviewed regularly. Employers cannot charge employees for these adjustments, and refusal is only permitted if the adjustment is not reasonable (e.g. due to excessive cost or operational impact).
Employment Rights Act 1996
“Capability” due to ill health is a statutory fair reason for dismissal. A long-term mental health illness may qualify under capability if no adjustments can restore performance.
The Employment Rights Act 1996 allows dismissal on the grounds of capability due to ill health, but only after all reasonable adjustments have been explored and a fair, well-documented process has been followed. Dismissal should always be a last resort, ensuring both legal compliance and compassionate treatment of the employee.
Employer Procedure Under The Employment Rights Act
The Employment Rights Act 1996 allows for dismissal on the grounds of “capability,” which includes situations where an employee is unable to perform their job due to ill health, including mental health conditions. However, strict procedures must be followed:
- Investigation: Employers must gather evidence, which may include medical evidence such as GP or occupational health reports, to understand the employee’s condition and prognosis.
- Consultation and Support: The employee should be consulted about their health, possible adjustments, and given time to improve with support in place.
- Reasonable Adjustments: Reasonable adjustments must be explored and implemented before considering dismissal.
- Fair Process: A fair and transparent process must be followed, including clear communication, review periods, and the opportunity for the employee to respond.
Dismissal is only considered fair if, after all reasonable adjustments and support, the employee remains incapable of fulfilling their role due to a long-term mental health illness. Employers must also consider whether the mental health condition qualifies as a disability under the Equality Act, as failure to make reasonable adjustments or discriminatory dismissal can lead to legal claims.
Employer Responsibilities
Duty of Care and Early Support
You have a duty of care to spot signs – sickness absence, lateness, mood changes – and initiate supportive dialogue promptly. Regular wellbeing check-ins foster openness and trust. You could also signpost to support services like EAPs or mental health charities.
Reasonable Adjustments
Reasonable adjustments can include flexible hours, workload modifications, rest breaks, remote working, equipment provision and phased returns. Adjustments should be bespoke, cost-practical, and regularly reviewed.
Structured Capability Process
- Gather Evidence
Request GP fit notes or occupational health reports with consent to assess capability and reasonable adjustments. - Consultation Meetings
Hold informal discussions to explore support needs, then formal meetings outlining concerns, evidence, and proposed adjustments. - Review Period
Agree clear targets and timeframes for improvement, with regular reviews to assess progress. - Final Hearing
Consider whether all reasonable adjustments and support have been exhausted before conducting a final hearing and deciding whether dismissal is a necessary course of action.
Dismissal and Aftercare
Notice and Communication
Provide written notification of dismissal and give the employee the opportunity to appeal your decision.
Risks and Mitigation
- Unfair Dismissal Claims: Currently employees with over two years’ service can claim if procedures aren’t fair or documented.
- Disability Discrimination: Automatic unfair dismissal is a day one employment right if poor mental health qualifies as a disability, with uncapped compensation potential.
- Duty of Care Breach: Failure to support may lead to personal injury claims or negligence.
- Reputation: Mishandling can damage employer brand and morale – transparent, compassionate processes protect trust of your remaining team and future hires.
If you need bespoke guidance on managing mental health and dismissal processes, contact us at Norton Loxley. Let us help you protect your business and support your people.
FAQs for Employers on Dismissing Employees with Mental Health Issues
Can I dismiss an employee because of mental health issues?
Yes, but only if the employee is genuinely unable to perform their role after you have made all reasonable adjustments. You must follow a fair process and ensure that dismissal is a last resort.
Is it possible to dismiss someone who is absent from work due to a mental health illness?
Dismissal during mental health-related absence is possible, but you should obtain medical evidence, consult with the employee, consider all reasonable adjustments, and follow a fair and documented procedure.
Could dismissing an employee for stress or poor mental health be considered discrimination?
Yes, if the employee’s condition qualifies as a disability under the Equality Act 2010, dismissing them without making reasonable adjustments or following fair process could be discriminatory and lead to legal claims.
What are examples of reasonable adjustments I should consider?
Reasonable adjustments might include flexible working hours, changes to workload or duties, additional breaks, remote working and providing access to mental health support. Adjustments should be tailored to the employee’s needs and reviewed regularly.
How should I manage mental health-related sickness absence?
Treat mental health absence the same as physical health absence. Maintain regular, supportive contact, obtain appropriate medical advice, explore adjustments to facilitate a return to work, and document all steps taken.
What risks do I face if I don’t follow the correct process?
Failing to follow fair procedures or make reasonable adjustments can expose your business to claims of unfair dismissal, disability discrimination, and reputational damage.
How can I support employees who may be using mental health as an excuse?
Approach the situation with sensitivity. Seek medical evidence, have open discussions with the employee, and consider occupational health assessments. Avoid making assumptions and ensure all concerns are handled consistently and fairly.
Is it discrimination to fire someone for stress?
Stress alone is not protected unless it amounts to a disability. If it does, dismissal without adjustments can be discriminatory.
How does mental health leave work in the UK?
There’s no statutory “mental health leave” separate from sickness absence. Employees use standard sick leave and SSP.
Where can I get further support or advice?
If you’re unsure about the right steps, seek guidance from employment law specialists or HR consultants, such as Norton Loxley, to ensure you meet your legal obligations and support your employees effectively.
