The insurance Council of Australia recently confirmed that more than 55% of claims are currently Mental Health and Stress related and growing rapidly.  For those living with a mental illness they need to be able to better access support to create more mentally healthy workplaces.  In its new draft report on mental health, the Productivity Commission estimates that mental ill-health and suicide is costing the Australian economy between $43-$51 billion per year. Lower economic participation and lost productivity makes up $10-$18 billion of that.

A further $130 billion is the estimated cost to individuals with mental ill-health due to diminished health and well being.

It is distasteful to view mental health through the prism of finance, but it is an effective way to get at the scope of the problem. If you combine the cost to individuals and losses due to lower economic participation and lost productivity, you get a figure that’s about eight per cent of the Australian economy.

For HR, the key things of interest in the report are the sections on income and employment support and mentally healthy workplaces.

Income and employment support
According to the report, Australia lags behind OECD leaders when it comes to labour market outcomes for people living with mental illness. Most of these Australians can “manage their lives without a negative impact on their employment” but are still underrepresented in the workforce, even though they would like to work and joblessness lowers mental wellbeing.

There is evidence that a mental illness can diminish the ability to work. This can come from the illness itself (lowered motivation due to depression, for example), or the side-effects of new or increased medication (lightheadedness, etc). But crucially, as the report points out:

“While on average, mental illness affects work performance, this does not mean that this effect is true for any given individual or any given mental illness.”

This gets to discrimination, and the Productivity Commission has neatly presented the numerous barriers facing those with mental health issues in the workforce.

Explicit bias, where people will not hire or promote someone because they have a mental illness, without assessing their actual ability.

  • Fear of discrimination prevents people from entering the workforce.
  • Fear of discrimination prevents current workers from disclosing a mental illness, which can mean they don’t ask for accomodations that will be good for their health and productivity – which can lead to poor career prospects and maybe even dismissal.
  • Low expectations of people living with mental illness can be self-fulfilling.

The recommendations to come from this section obviously focus on reviewing, rethinking and reshaping how government can support workers and job seekers with mental illness. This is not as relevant to HR but includes making Disability Employment Services and Jobactive assessment tools more relevant to job seekers with mental illness.

More pertinently for employers, the report found the Individual Placement and Support (IPS) model of employment to be robust and effective. This where employment specialists work alongside the participants’ clinical team pre and post-employment to get them and keep them in mainstream labour markets. So they would be provided with ongoing support upon being hired (job coaching, career development or negotiating pay rises).   The report recommends IPS “should be extended beyond its current limited application through a staged rollout to (potentially) all State and Territory Government community mental health services, involving co-location of IPS employment support services.”

Mentally healthy workplaces
In an introduction that will surprise very few HR professionals, the report says, “There is limited evidence of what actually constitutes a ‘good’ workplace or a ‘good’ job in terms of mental health, but there are a number of recognised risk factors or stressors that are specific to the workplace that can undermine the mental health of those in the workplace.”

Collating information from a few sources, the report outlines various psychological risks, and the factors that contribute to a mentally healthy workplace. It’s definitely worth its own article, but the report itself makes reference to Safe Work NSW’s guide.

There were a few key findings in this section.
When a mental health issue derives from cultural issues, or personal conflict, it is harder for staff to return to work for smaller businesses – particularly because there is often only a single location to return to.
Workers compensation arrangements should focus on early intervention, early treatment and successful return to work.

Employee assistance programs (EAPs) are highly valued by some, but to facilitate their reliability and reputation, EAP providers should develop mechanisms for individual businesses to evaluate outcomes and invest in research to improve “external evaluation and benchmarking” of best practice.

The report contains five recommendations in this section.
Psychological health and safety should be given the same importance in workplace health and safety (WHS) laws as physical health and safety. This would mean updating some of Australia’s WHS legislation and regulation. This should happen in the next two years.

Codes of practice on employer’s duty of care should be developed by different WHS authorities and Safe Work Australia to help employers meet their duty of care. It should take into account the different risk profiles of different industries and occupations. This should happen in the next two years. 

Workers compensation schemes should provide lower premiums for employers who have initiatives and programs that their WHS authority considers “highly likely to reduce the risks of workplace related psychological injury and mental illness for that specific workplace”. This should happen over the next two-five years.

Workers compensation schemes should be amended to provide treatment for workers making mental health claims, regardless of liability, until the person returns to work or after six months. This should happen in the next two years. The Productivity Commission is seeking information on how this should be funded.

WHS agencies should assess employer initiated interventions to create mentally healthy workplaces then advise other employers about what is effective. This should happen over the next two to five years.
The Commission is also asking for further information on whether designating some existing personal leave days as ‘personal care’ would help employees actually take time off to attend to their wellbeing. Would it improve information on absenteeism due to mental health reasons? If so, how would this change be made effective?

  • Its last information request in this section is on whether there are barriers for employers (in industries with higher risk) from purchasing income protection insurance on a group basis so employees could access it at a lower cost.
  • If any readers have thoughts on any of the above, we encourage them to discuss in the comments and/or get in touch with the Productivity Commission.
  • Written submissions are requested by 23 January 2020.
  • Go to the website for more information for testing and assessments: