Absences due to mental health issues
Absences due to mental health issues – employer’s rights and obligations
Mental health-related sick leave has been on a long-term upward trend in Finland. According to statistics, mental health disorders overtook musculoskeletal diseases as the leading ground for sickness allowance in 2020 and have since remained the most common cause of longer sickness allowance periods. A significant proportion of disability pensions are also granted on the basis of mental health conditions. According to the latest data from the Finnish Centre for Pensions, almost four fifths of new disability pensions granted to those under the age of 35 are for mental health reasons. Retirement on mental health grounds occurs at a notably young age, on average at just 44 years old. This is no longer a marginal phenomenon, but a reality that affects many employers in one way or another.
The issue is also increasingly arising in legal contexts. From the employer’s perspective, mental health-related sick leave involves a substantial range of obligations and risks that must be recognized — whether the issue concerns early support models, sick pay obligations, the processing of sensitive health data, or the management of prolonged incapacity for work. Mental health-related situations are particularly challenging also because the boundary between medicine and law is not always clear: a diagnosed illness and a life situation leading to incapacity for work can in practice become intertwined in a way that complicates the assessment of the employer’s obligations and rights.
In this article, we cover the employer’s preventative obligations, the conditions governing the sick pay obligation, the requirements relating to the processing of employees’ health data as personal data, and the conditions under which an employment contract may ultimately be terminated.
The employer’s obligations begin with prevention
The employer’s obligations are not limited to situations where an employee has already taken sick leave for mental health reasons. Occupational safety and health legislation requires employers to take an active and proactive approach to ensuring health and safety at work. This obligation also covers psychosocial workload factors, referring to factors relating to the nature of work and work arrangements as well as the social dynamics of the work community that may have a harmful impact on employees’ health.
The Occupational Safety and Health Act (738/2002) imposes on the employer a general duty to ensure the safety and health of employees at work, taking into account both work-related and environmental factors and the individual characteristics of employees. The employer must systematically identify, assess and, where necessary, eliminate risks to the health and safety of work.
A cornerstone of mental health promotion is occupational health cooperation in support of mental health, between the occupational health service, the employer and employees. The so-called early support model may be used to address the various challenging situations requiring occupational health cooperation. The purpose of early support measures is to promote work ability and prevent incapacity for work. The aim is to identify and intervene in declining work ability at the earliest possible stage — before the situation escalates into prolonged sick leave.
By agreeing on practices for supporting work ability, monitoring sickness absences, cooperating with the occupational health services and engaging in active discussions on work ability matters, the employer can prevent prolonged problems with an employee’s work ability. Prevention is not only a legal obligation but also a sound financial investment. Proactive measures can not only prevent a decline in work ability but also reduce the legal risks and costs that may otherwise arise for the employer at a later stage.
In more prolonged situations, the employer’s obligations may extend beyond early support measures: where a mental health disorder is chronic or recurrent in nature, the employer may be subject to a duty of reasonable accommodation under the Non-Discrimination Act, such as reviewing the employee’s job description or providing flexibility in working hours.
A particular legal risk arises where a mental health problem has developed or worsened as a result of the employer’s own failures — for example due to inappropriate treatment, excessive workload, or inadequate management. In such situations, the employer must first address the circumstances that have contributed to the situation. Where the employer seeks to terminate the employment contract in such circumstances, the termination is legally highly vulnerable to challenge. Careful documentation of all support and corrective measures is essential in this context as well.
The sick pay obligation – burnout as a special case
Absence due to mental health issues does not alter the basic principles of sick pay; the same provisions apply regardless of the diagnosis. Under the Employment Contracts Act (55/2001), an employee is entitled to sick pay if they are prevented from working due to illness or an accident and have not caused their incapacity for work intentionally or through gross negligence. The statutory minimum is as follows: if the employment relationship has lasted for at least one month, the employee is entitled to full pay for the day of falling ill and for the following nine weekdays. Where the employment relationship has lasted less than one month, the entitlement is to 50 per cent of pay for the same period. Collective agreements often provide the sick pay periods and conditions that go beyond the statutory minimum.
The employer is entitled to require a medical certificate of incapacity for work. Many workplaces operate a self-certification policy for short absences, after which a medical certificate is required. Furthermore, collective agreements may contain more detailed provisions. However, the content of medical certificates is subject to restrictions regarding the processing of sensitive health data, which are examined separately below.
One important special issue concerns occupational burnout. Under the official ICD-10 classification, burnout is classified as a problem related to life management rather than a disease in the medical sense. This corresponds with the legal starting point: sick leave must be based on a diagnosed illness or a reasonable clinical suspicion thereof, and a physician’s assessment that absence is warranted due to life circumstances or work-related stress alone does not give rise to sick pay. Where a medical certificate records only the diagnosis of burnout, this is insufficient in itself to establish the incapacity for work required to trigger an entitlement to sick pay.
In its case law, the Labour Court has emphasised that the employer is entitled to request further clarification from the employee to specify the diagnosis if the medical certificate merely states burnout as the diagnosis. Where the additional clarification demonstrates that the employee’s symptoms amount to an illness that has caused genuine incapacity for work, and the employer is unable to show that the medical certificate is incorrect or deficient, sick pay must be paid. According to the Labour Court’s ruling, burnout has not been categorically excluded from the grounds for sick pay: mere doubt as to the adequacy of the diagnosis does not constitute sufficient grounds for withholding sick pay, nor does a request for additional clarification automatically entitle the employer to refuse payment.
Termination of employment due to mental health issues
Prolonged incapacity for work due to mental health issues inevitably raises the question of when and how an employment contract may be terminated. This is a legally sensitive area in which errors can prove costly. Unjustified termination on the grounds of mental health problems may, in the worst case, fulfil the constituent elements of work discrimination, which is a criminal offence under the Criminal Code.
The general rule under the Employment Contracts Act is clear: an employee’s mental health condition is, as a rule, a prohibited ground for termination. Illness may only constitute grounds for termination where the employee’s work ability has been substantially and long-term reduced due to illness, such that the employer cannot reasonably be expected to continue the employment relationship. The assessment is always based on an overall consideration, taking into account factors such as the duration and prognosis of the incapacity for work, the employee’s duties, and the possibilities of continuing employment through, for example, workplace arrangements, reassignment or other support measures.
In the context of mental health issues, a key reason for the threshold for termination not being met is termination that occurs too early or without sufficient evidence of the substantiality and long-term nature of the incapacity for work. Case law has established a so-called one-year rule: if the incapacity for work has lasted for approximately one year and there is no prospect of recovery, the grounds for termination may be met. However, this is merely a guideline, and in cases involving mental health issues, the one-year rule must be applied with particular caution.
Mental disorders differ from many other illnesses in that recovery is often non-linear and the prognosis difficult to assess. For example, in the case of depression, the substantiality and long-term nature of the reduction in work ability may be hard to predict, and the employee may repeatedly attempt to return to work without success. In such situations, a medical certificate may carry significant evidential weight.
With termination considerations, a question may also arise as to whether the situation involves clinical illness in the true sense or a situational reaction linked to life circumstances without a proper diagnosis. The legal starting point is clear: protection against termination on grounds of illness requires the existence of an actual disease or disability, and the overall assessment may draw on medical certificates, treatment history and information concerning rehabilitation attempts. Cancellation of an employment contract is, in situations involving mental health, an exceptional measure and requires a particularly weighty reason. The threshold may be met on the basis of prolonged, effectively permanent incapacity for work, or where the illness is accompanied by particularly reprehensible conduct, such as violence.
Both cancellation and termination with immediate effect are subject to a hearing obligation: prior to terminating an employment contract on personal grounds, the employee must be given an adequate opportunity to be heard in respect of the grounds for termination relied upon by the employer. Failure to comply with the hearing obligation does not automatically render the dismissal unlawful, but it is taken into account in the overall assessment and may increase the employer’s liability for damages.
Situations involving the termination of mental health grounds are legally complex matters in which it is advisable to consult a specialist in employment law. While the criteria for assessing mental health problems as grounds for termination are in principle the same as for other illnesses, the inherently unpredictable nature of recovery from mental disorders, together with the additional features associated with such conditions, significantly complicates the assessment of whether the threshold for termination has been met in practice.
Processing of personal health data
Mental health-related sick leave inevitably involves sensitive personal data, the processing of which requires particular care.
The employer has the right to process data concerning an employee’s state of health if the data has been obtained from the employee themselves or from elsewhere with their written consent, and where the processing of the data is necessary for the payment of sick pay or other health-related benefits, or for assessing whether there is an acceptable reason for the employee’s absence. The processing of health data is also permitted if the employee expressly wishes their fitness for work to be assessed on the basis of such data.
The employer must designate the persons or define the duties that involve the processing of health data. Health data is confidential and must not be disclosed to third parties even after the employment relationship has ended. Furthermore, health data must be stored separately from other personal data, and the data must be deleted once there is no longer a basis for its processing.
To meet these requirements, it is essential for employers to ensure that HR processes are clearly defined: who has access to which data, how medical certificates are handled and stored, and how managers have been trained. Data protection breaches in matters relating to mental health are serious and can lead to significant administrative fines.
In conclusion
The legal questions associated with mental health-related sick leave cover the entire employment lifecycle, from prevention to potential termination, and managing the whole process requires both human sensitivity and legal precision from the employer. When handled correctly, the process supports both the employee and the employer.
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