Managing employee performance compassionately

Nearly half of New Zealanders will live with mental illness and/or addiction at some point during their lifetime.

Maintaining a supportive workplace environment for people who have mental health concerns is too important to ignore, and conversations around how we do this are becoming more common. Employers have a legal obligation to manage risks to mental health as they do any other health and safety risk and employers need to consider that performance and disciplinary management are high-stress situations for any employee and can be harmful to someone with a medical health condition if not handled with appropriate care.

A New Zealand employment case, FGH v RST [2018] NZEmpC 60, has shone a spotlight on this issue in New Zealand employment law. The decision, in this case, has changed how an employer must proceed with discipline and performance management matters, in certain circumstances.

It found that effectively, where an employee is known to have, or has disclosed, any medical condition which can affect their conduct or performance in the workplace, or their capacity to engage with the employer in dealing with their conduct or performance, then you should exercise significant care in dealing with the matter. This is an important responsibility triggered by any awareness you may have of your employee’s condition. As an employer, you shouldn’t rely on procedural compliance to guarantee that you’ve met your duty of care towards your employee in this situation.

The Employment Court has provided guidance for these difficult situations and for taking all reasonably practicable steps to prevent harm to their employee. But before we look at how to manage performance in the context of a medical health condition, let’s take a quick look at the case.

FGH v RST [2018] NZ Employment Court 60: the facts

FGH was an employee with a known and disclosed anxiety issue, who had raised various workplace matters with her employer. The timeline of events was extensive (from mid-2013 to August 2016) and complex but chiefly included:

• FGH had been subjected, previously, to two Performance Improvement Plans (PIPs) for performance issues and attendance issues.
• She disclosed having attention deficit disorder (ADD), which contributed to her not managing her workload well.
• She sought a transfer to a different team owing to the stress of being closely supervised.
• Her employer kept detailed and extensive notes on her performance and day-to-day behaviour – without her knowledge.
• FGH took time off for anxiety and stress, and her condition was certified by a doctor and recorded in the PIP.
• There were a series of close-together events relating to managing her performance that caused her to feel stressed, bullied and “trapped.”
• Meetings were held with her and her representatives, where the health and safety of her work environment was raised; and
• A final PIP was implemented.

The Employment Court decided there was a legitimate grievance

The court’s decision recognised these factors:

1. A healthy and safe working environment wasn’t provided.
2. An incorrectly instituted and wrongly decided disciplinary action disadvantaged FGH.
3. There was adverse conduct by continuing and maintaining the disciplinary action after she returned to work.

The decision noted that robust, or “tenacious” performance management is not in and of itself unfair (where the manager is professional and courteous in implementing it). However, in the context of an employee’s known or even suspected medical conditions especially in a 2022 workplace environment, there is an expectation that a manager will “dial back” on the robustness of their approach to account for the condition.

Lesson learned: employers need to carefully check if an employee has a diagnosable mental health challenge

Before commencing any process to discipline or manage an employee, the employer should specifically take care to find out if there is a possible or known medical condition contributing to that behaviour or performance.

If there isn’t, an employer should proceed as normal with the usual duty of care and good faith towards its employees and follow established performance management processes. If there is, then an employer may need to rethink established performance management processes to approach the situation delicately, showing sufficient good faith and duty of care to that employee.

What should you do when dealing with an employee who may have a medical condition impacting their performance?

While each situation will be unique and should be approached as such, there are six general points you should cover as part of your process:

1. Objectively consider the possibility of such a condition being a contributor to your employee’s conduct or performance. There’s no need for you to “invent” or imagine these concerns, but it is wise not to ignore any indication that such a condition may exist.
2. Where such a condition is known, stop and seek legal or expert advice about the best way to proceed. Phoning Citation HR is a great start.
3. When you begin a performance management process where a mental health or behaviour condition is possible (but not definitely known), do so with respect for privacy. A good way to start is with an open discussion that is not threatening or demanding of the individual. Rather than tackling the issue bluntly, start wide and gradually narrow the focus ensuring you demonstrate empathy, strong listening skills and that you take care to pick up on any cues.
4. Be prepared at every stage to pause proceedings to re-evaluate your approach.
5. Explore possibilities respectfully, without demanding or expecting your employee to disclose what may be embarrassing or compromising information. Communicate with them that the more context you’re made aware of, the more you can deal with the matter appropriately (of course, if there is clearly no good faith basis, or trust and integrity, this may not be wise or even possible).
6. You may request medical information in seeking to better understand the impact of the condition on performance, conduct and/or the employee’s capacity to be put through a performance management process (this may be subject to privacy constraints and may need to be approached cautiously and with a view to an agreement, not compliance).

Be proactive about reducing risk to your employee’s health and to your business

If a medical condition is confirmed, legal advice is the best way to help you choose the right path forward. This will minimise the risk of unfairness while still achieving the best outcome for you as well as your employee. Remember that discipline and performance management processes are designed to correct performance and behaviour and return it to acceptable levels. Ask yourself whether the process itself may cause harm to an employee, especially if a medical health condition is recognised, and take proactive steps to reduce this risk. Your goal is a constructive outcome, that is good for your business and that doesn’t compromise the health of your employee.

If this article has raised any questions or concerns or you’d like to learn more about how we can help your business, please reach out to our workplace relations experts via our 24/7 HR Advice Line.