When an employee discloses a mental health condition in the context of underperformance discussions, employers often ask question: “Do we now have to change the role?” 

The legal answer is more nuanced — and far more practical — than many realise. 

Australian employment law does not require employers to change the essential (or inherent) requirements of a role. What it does require is that employers genuinely consider reasonable adjustments and avoid rigid, “all-or-nothing” approaches to capacity. 

Understanding inherent requirements 

Inherent requirements are the essential duties of a role — not what is merely convenient or historically expected. Identifying them correctly is critical when medical capacity is in issue. 

Employers must: 

• identify what is genuinely essential to the role 

• consult with the employee 

• consider medical evidence from a functional standpoint – what can they do and what can’t they do 

• assess whether adjustments are available and reasonable 

• document why options are accepted or rejected 

An assumption that an employee must be either “fully fit” or “unfit” is rarely defensible. 

Unjustifiable hardship 

The duty to make reasonable adjustments is not unlimited. An employer is not required to make an adjustment if doing so would impose an unjustifiable hardship on the business. 

This is an important — and often misunderstood — qualifier. 

Whether a proposed adjustment amounts to unjustifiable hardship requires a balanced, evidence-based assessment, not a gut reaction. Relevant factors include: 

• the nature and cost of the adjustment 

• the financial circumstances and size of the business 

• the impact on productivity, safety and operational viability 

• the effect on other employees, including workload redistribution 

• whether alternative, less onerous adjustments are available 

Importantly, inconvenience, discomfort, or a preference for the status quo will not meet the threshold. Nor will vague assertions that an adjustment is “too hard” or “sets a precedent”. 

Employers should also be cautious about assuming hardship too early. An adjustment that appears unreasonable in theory may be workable on a trial or temporary basis, particularly where medical evidence suggests capacity may fluctuate or improve. 

A failure to properly assess unjustifiable hardship — or to document why an adjustment was not feasible — is a common reason employers lose discrimination and unfair dismissal claims. 

The takeaway 

Mental illness does not require compromising on reasonable performance standards. But it does change the legal lens through which decisions are assessed. Employers who approach capacity flexibly, document their reasoning and prioritise fair process place themselves in the strongest position — legally and culturally.