Firing someone with mental health issues in Canada isn’t just tricky – it’s a legal minefield that can explode in your face if you don’t know what you’re doing.

The good news? You can navigate this situation without getting sued or making someone’s mental health worse. The bad news? It takes more work than a regular termination.

Let’s break down everything you need to know about letting go of an employee with mental health challenges while staying on the right side of Canadian law (and basic human decency).

The Legal Landscape: What You Need to Know

First things first – mental health conditions are protected disabilities under Canadian human rights laws. That means you can’t just fire someone because they have anxiety, depression, or any other mental health condition.

But that doesn’t mean you can never terminate an employee with mental health issues. It just means you need to follow the proper process.

Canadian law establishes mental disabilities as conditions that are:

• Ongoing
• Outside the person’s control
• Seriously impair their ability to do their job

The protection extends beyond diagnosed conditions to even perceived disabilities and past conditions like addiction. So if you think someone has a mental health issue and treat them differently because of it, you could still be liable.

Your Duty to Accommodate (And Its Limits)

Before you even think about termination, you need to understand your duty to accommodate employees with mental health conditions.

This means you have to work with them to find reasonable adjustments that help them succeed at work. These might include:

• Flexible work hours
• Modified job duties
• Quieter workspace options
• Regular breaks
• Assistive technologies
• Remote work options

But here’s the important part – this duty isn’t infinite. You only need to accommodate up to the point of “undue hardship” on your business.

What counts as undue hardship? It depends on:

• The size of your company
• Your financial resources
• Safety considerations
• Substantial impact on operations

When Performance Issues Arise

Let’s say you have an employee whose performance is dropping. They’re missing deadlines, their quality of work is declining, or they’re calling in sick constantly.

Don’t jump straight to termination!

Here’s what to do instead:

1. Have a private, compassionate conversation about the performance issues
2. Ask if there’s anything affecting their work (opening the door for them to disclose mental health concerns)
3. If they disclose a mental health condition, discuss potential accommodations
4. Document everything (conversations, accommodation attempts, performance issues)
5. Use progressive discipline (verbal warnings → written warnings → final notice)

Remember – if their performance issues are directly related to their mental health condition and you haven’t properly accommodated them, terminating them could be discrimination.

The Accommodation Process

The accommodation process should be interactive and ongoing. It’s not a one-and-done conversation.

Ask questions like:

• “What aspects of your job are most challenging right now?”
• “What adjustments might help you perform your core duties?”
• “How can we support you while meeting our business needs?”

Document all accommodation requests and your responses. If you deny a request, document why it would cause undue hardship.

Termination: When and How to Do It Legally

Sometimes, despite your best efforts, termination becomes necessary. Maybe you’ve provided all reasonable accommodations and performance still isn’t improving. Or perhaps your business is downsizing and the position needs to be eliminated.

You can still terminate an employee with mental health issues, but the reason cannot be related to their disability.

Legal Grounds for Termination

Valid reasons for termination might include:

• Legitimate performance issues unrelated to their mental health condition
• Position elimination due to restructuring
• Redundancy
• Business closure
• Serious misconduct unrelated to their condition

Remember that Canadian employment law requires proper notice or pay in lieu of notice in most cases, even for employees with mental health conditions.

The Termination Process

When you do move forward with termination, follow these steps:

1. Prepare thoroughly – Review all documentation of performance issues, accommodation attempts, and progressive discipline
2. Choose the right time and place – Private, end of day, with enough time for questions
3. Be direct but compassionate – Don’t sugarcoat but avoid being harsh
4. Provide clear information about final pay, benefits continuation, and references
5. Document the meeting with notes on what was discussed
6. Offer support resources like Employee Assistance Programs or mental health resources
7. Follow up in writing with termination details

The way you handle the termination can significantly impact whether the employee pursues legal action. Being respectful and compassionate goes a long way.

Legal Compliance Checklist

Make sure you’re following all applicable laws:

• Provide proper notice according to the Canada Labour Code or provincial employment standards
• Calculate and pay any severance owed
• Process final pay correctly
• Provide record of employment
• Continue benefits as required by law
• Return the employee’s belongings
• Secure the return of company property

Avoiding Legal Pitfalls

The biggest risks when terminating employees with mental health issues are discrimination claims and constructive dismissal claims.

Discrimination Claims

To avoid discrimination claims:

• Never cite mental health as a reason for termination
• Ensure you’ve explored all reasonable accommodations
• Document all performance issues separately from health discussions
• Apply the same standards to all employees
• Make termination decisions based on objective criteria

Constructive Dismissal

Constructive dismissal happens when working conditions become so intolerable that an employee is essentially forced to quit. This can include:

• Drastically changing job duties without consent
• Cutting pay significantly
• Creating a hostile work environment
• Failing to address harassment
• Refusing reasonable accommodations

If a court finds constructive dismissal occurred, it’s treated the same as wrongful termination.

Privacy Concerns

Mental health information is highly sensitive. Only share it on a strict need-to-know basis.

Even HR shouldn’t have access to specific diagnosis details – they just need to know what accommodations are required. Managers need even less information – just guidance on implementing accommodations.

Practical Tips for Employers

Here are some best practices to keep in mind:

• Train managers on mental health awareness and accommodation
• Document everything – conversations, accommodation attempts, performance issues
• Be consistent in how you handle similar situations
• Consult legal counsel before terminating an employee with known mental health issues
• Maintain confidentiality of all health information
• Focus on job performance, not health status
• Consider a severance package even when not legally required (it can prevent costly litigation)

Remember that supporting mental health in the workplace benefits everyone – reducing turnover, increasing productivity, and creating a more positive work environment.

When to Seek Professional Help

Don’t try to navigate complex terminations alone. Consider consulting:

• Employment lawyers
• HR specialists
• Occupational health professionals
• Mental health experts

The cost of professional guidance is far less than a discrimination lawsuit or human rights complaint.

Final Thoughts

Terminating an employee with mental health issues in Canada requires balancing legal obligations, business needs, and compassion. Done correctly, you can make necessary business decisions while treating people with dignity and staying compliant with the law.

Remember that how you handle these situations affects not just the employee being terminated, but your entire workplace culture and your company’s reputation.

By following the proper process, documenting thoroughly, and approaching the situation with empathy, you can minimize legal risks while maintaining your organization’s integrity and the employee’s dignity during a difficult transition.