Could you be discriminating against employees and job seekers who have a mental illness?

It is illegal for employers to discriminate against workers or job seekers on the basis of mental illness or mental disability. However, evidence suggests that such discrimination is not uncommon.

Over half of job seekers with mental illness report experiencing discrimination

It is against workplace laws to discriminate against people with a mental illness, but a national survey of 1,386 people with a diagnosed mental illness, conducted by the Centre for Mental Health at the University of Melbourne, found that more than half of those with a mental illness who were looking for work believe they were rejected because of their mental health problem. The survey was published by the Australian & New Zealand Journal of Psychiatry.

One person told researchers he would have been better off telling job interviewers he’d just been released from prison: “Sometimes I think it’s worse than telling them you have been in jail. Once you mention it their face changes and their body language changes and you know you won’t get the job”.

Length of period of unemployment proportional to decline in mental health

Research conducted by Deakin University and published by the journal Occupational & Environmental Medicine also found that the mental health of people who are unemployed deteriorates in proportion to the length of time they do not have a job and this becomes a further obstacle to finding work.

In effect, a person with a mental illness who is unemployed can be caught in a vicious cycle of discrimination by potential employers which leads to a further deterioration of their mental health, which in turn further decreases their chances of finding employment.

Unemployment, mental illness and suicide

It is a sobering fact that suicide rates are higher among people who are unemployed than among those who are employed. These rates rise even higher during a recession.

A study published in the International Journal of Epidemiology revealed that suicide rates among unemployed men in Australia increased by 22% during the global financial crisis. The suicide rate for unemployed women rose by 19% over the same period.

Laws prohibiting discrimination against people with mental illness

Around three per cent of Australians – 600,000 people – are diagnosed with a severe mental disorder. More than three million Australians have had a mild to moderate condition. It is far more common than most people believe.

Section 351(1) of the Fair Work Act 2009 states: “An employer must not take adverse action against a person who is an employee, or prospective employee, of the employer because of the person’s… mental disability.”

There are similar provisions in the Disability Discrimination Act 1992 and the Australian Human Rights Commission Act 1986.

Unfortunately, it is difficult to apply laws that protect against workplace discrimination to people rejected when applying for a job unless there is proof that they were discriminated against. What usually happens is that the applicant simply does not get the job and is not given a reason.

Alternatively, the applicant who has revealed a mental illness during the application or interview process is just told that they didn’t quite fit the requirements or that another applicant had better qualifications. It is relatively rare for an employer to say: “We don’t want you because you have a mental illness”. If this happens, the job applicant can bring a discrimination claim against the employer.

Employers have a legal obligation to avoid discrimination

Employers would be wise to get legal advice to be sure they are complying with the law, as penalties can be severe. Employers have legal obligations to avoid discrimination, ensure privacy, avoid adverse actions and make sure the workplace fulfils health and safety regulations.

While there may be safety reasons why a person with a mental illness cannot do certain work, the employer needs to be able to demonstrate that alternatives were offered. It is worth bearing in mind that unfair dismissal claims can be costly for employers.

On a positive note, the survey did find that 24 per cent of employees with a mental illness reported positive treatment at work. However, 11 per cent said they were avoided by colleagues, and 14 per cent felt they were discriminated against.

While there is still stigma and ignorance surrounding mental health, employers are becoming more aware that mental illness is fairly common. Two thirds of people with a reported mental illness are employed.


Nathan Luke is an employment lawyer at Stacks Law Firm. Nathan is Director of Stacks Law Firm, Ballina/Byron Bay. He has over 20 years’ experience in employment and industrial law, litigation, workers compensation and work health and safety matters for workers, employers and insurers. He also provides general strategic business advice for his many fast-growing employer clients. Nathan has a unique set of skills and is known for his pragmatic approach and for his lateral thinking problem solving in urgent and difficult workplace and commercial matters.


Employment Law Matters’ Managing Workplace Mental Health Workshop will be held in Melbourne (5 December) and Sydney (6 December). The workshop will take an in-depth and practical look at legal obligations, how to approach and identify the issue with an employee, how to deal with risks related to performance and absenteeism, as well as return to work considerations. Find out more about our workshop.