In a significant decision which will give comfort to employers, the Full Court of the Federal Court has reversed an order for reinstatement of a lawyer who was dismissed while suffering from a mental illness.

First decision

In February 2014, the Federal Circuit Court found that Victoria’s Office of Public Prosecutions had taken unlawful adverse action against an employee when it stood him down then dismissed him for misconduct that ‘arose wholly’ from his anxiety and depression.

The employee was a lawyer who had been absent from work in early 2012 due to a long term anxiety condition complicated by excessive consumption of alcohol and bouts of depression.  The lawyer was frequently absent from work which impacted on court cases for which he was responsible.  This was a matter of significant concern for his employer and as a result, he was stood down for a period pending investigation.  His employer also required him to obtain a ‘detailed medical report’ on his condition and its effect on his ability to perform his duties. 

The employer’s investigation concluded that on at least four occasions the lawyer was guilty of misconduct relating to instances of disobedience of lawful directions.  Although the lawyer produced a medical report that recommended he return to work in early March 2012, he was subsequently dismissed for misconduct.

The lawyer argued that his employer was aware of his medical condition and it influenced the decision to terminate his employment.  At first instance, the court agreed and found that his employer had contravened s 351(1) of the Fair Work Act 2009 (Cth) (Act) because the instances of misconduct were ‘wholly’ attributable to his mental disability and it was therefore utterly impossible to ‘disaggregate’ the employee’s conduct from his mental illness.

The decision maker gave evidence that the only reason that he had dismissed the employee was his misconduct.  He denied that the mental disability played any part in the decision.  While finding that the decision maker gave honest evidence, the trial judge found that there was ‘a measure of unconscious reconstruction in his position’ which made his evidence unreliable.  The trial judge then said that it was obvious that the employee’s ill health played a part in the dismissal decision.


The Full Court re-emphasised the principle first espoused by the High Court in its decision in Board of Bendigo Regional Institute of TAFE v Barclay that if the evidence of the decision maker as to the reason for their decision is accepted, the court cannot find that the decision was actually taken for a different reason (such as, in this case, the employee’s mental illness). 

The Court found that the evidence (importantly the evidence of the decision maker) did not support the primary judge’s ‘unqualified finding’ that the lawyer’s ‘conduct arose wholly out of his medical condition’.  Further, there was ‘nothing in the [medical] report that which attributed the four acts of misconduct’ to the lawyer’s mental condition.  The evidence linking the lawyer’s misconduct with his medical condition was ‘incomplete’, with the lawyer’s own doctor failing to determine that each of the issues was linked to the state of the lawyer’s mental health.

The Full Court found that it is possible for there to be ‘close association between the proscribed reason and the conduct which gives rise to adverse action’ without the proscribed reason forming the reason for the decision to take adverse action.  As a result, it was wrong to rule that it was impossible to ‘disaggregate’ the lawyer’s conduct from his illness.

Key lessons for employers

It is now clear that the existence of a ‘close association’ between the reason adverse action is taken by an employer (such as misconduct justifying dismissal of an employee) and a prohibited reason (the employee’s illness) does not necessarily mean that the action will be found to have occurred because of the prohibited reason. 

This case serves as a timely reminder that the decision maker’s evidence about the reason for the adverse action taken will be central to the success or failure of the defence of an adverse action claim.

Employers must still proceed cautiously when taking adverse action against employees.  When employers are aware that an employee has an illness or disability, such as depression, it must ensure that the illness or disability is not a reason for the adverse action.