How to manage the employee with mental illness?

Shortly after Mr. Q joined Company X, he suffered from melancholia. Company X was worried that Mr. Q’s illness might affect his work and other colleagues, so it terminated the labor contract with Mr. Q after he had been diagnosed. In addition, Company X paid the payment in lieu of notification and economic compensation. However, Mr. Q refused to accept Company X’s decision, and the dispute was brought to the arbitration committee and then the court, finally, the court made the judgment, which required Company X to resume the labor relation and arrange the payment for sick leave to Mr. Q.

Then how to deal with the employee with mental illness? We have ananzyed what the employers can do based on the Chinese Laws and Regulations
Firstly, the mental illness belongs to the illness, so the employer can deal with such employee’s labor contract in accordance with the relevant provisions on the medical period. For the duration of a labor contract, according to “Opinions on Issues Concerning the Implementation of Labor Contract”, Article 34, if the labor contract is expired during the medical period, the expiry date of the labor contract shall be postponed automatically to the expiry date of the medical period. In view of this, the expiry date of the labor contract for such employee shall be the expiry date of labor contract or the medical period, whichever is later. For the termination of a labor contract, according to “Labor Contract Law” Article 40, the employee is unable to take up his original work or any new work arranged by the employer upon the expiry of the medical period, the employer shall be entitled to terminate the labor contract.

To summarize, if the employer wants to terminate the labor contract with the employee with mental illness, there are 2 requirements should be met: 1) time requirement, which shall be upon the expiry of the medical period; 2) procedure requirement, which says that the employee is unable to take up his original work or any new work arranged by the employer. In this case, Company X lost the lawsuit, because it failed to terminate the labor contract in accordance with Article 40 of “Labor Contract Law”. There is a special circumstance, according to “Reply to the Issues about the Medical Period of the Employees with Mental Illness”, if the employer has specified that the person with mental illness shall be disqualified in the requirement of employment (such as the recruitment notice, the labor contract or the job description), then the employer shall be entitled to terminate the labor contract during the probation period. But for this circumstance, in order to avoid being deemed as employment discrimination, the employer shall pay attention to the specific wording for the requirement of employment.

Secondly, the employer shall be extreme caution of the resign application of the employee with mental illness. Because the person with mental illness has the period of onset, during this period, he might not have the capacity for civil conduct, we suggest the employer to negotiate and sign the relevant documents with him and his guardians, otherwise, such resign application may be deemed as invalid. Shanghai Jing’an people’s court has once decided that the resign application made by the employee during the period of onset was invalid, and required the employer to resume the labor contract.

Last but not least, since the mental illness is special, and the employer cannot force an employee to conduct a psychiatric assessment or diagnosis. If the employee has special actions related to the mental illness, but he refused to diagnose, it would be better for the employer to contact his family, tell them the possible consequences, and urge such employee to diagnose as soon as possible.