Your ill and injured employees – Your obligations and rights

29 September 2016

It is an unfortunate reality when employers must terminate employment of workers who have been ill or injured for an extended period of time. At the best of times, effectively terminating an employee’s position can be difficult, much less when the termination is due to the fact that the employee can no longer perform their role due to injury and/or illness.

Recently, the Full Bench of the Fair Work Commission considered in some detail the principles that should guide employers in navigating the decision to terminate ill or injured employees in the matter of Lion Dairy and Drinks Milk Limited v Norman1.

Facts of the case

In the Lion Dairy matter, the employee was a maintenance technician, who had taken extended sick leave (of 14 months) while recovering from a non-work related accident. After 14 months, the employer commissioned an independent medical assessment (Assessment) in order to assess the employee’s ability to perform the inherent requirements of his position.

The Assessment deemed it unlikely that the employee would be able to perform the inherent duties of a maintenance technician, though reserved his prognosis of the employee. The employee, when provided with that report, produced a certificate from his treating surgeon, who certified that the Worker was fit to gradually return to work and perform the inherent requirements of his job.

The Employer than sought a supplementary assessment from their original doctor to provide to the employee. The Employee was asked to respond to the supplementary report in seven days (which was over the Easter break). The Applicant duly responded asserting that he was able to return to work (with the support of his treating surgeon).

By this stage the relationship between employer and employee was slightly strained, so when the employer sought to communicate directly with the employee’s treating surgeon directly to clarify the divergence of opinion, the employee granted permission on the proviso that the employee would act as a conduit between the employer and his treating surgeon. However, there was a miscommunication and the employer understood that permission to speak to the treating doctor had been denied by the employee.

In the face of conflicting medical reports, and the perceived inability to communicate directly with the employee’s surgeon, the employer terminated the employee’s employment of the basis of the Assessment.

In response the employee brought an unfair dismissal claim against the employer on the basis that the dismissal was harsh, unfair and unreasonable. The employee claimed that he had been denied procedural fairness on the basis that he had only been given a short period of time over Easter to respond to the Employer’s contentions about his abilities and the Employer based their opinions only on the Assessment. It was further argued by the employee that he could perform the inherent requirements of the position and accordingly, the employer had no valid reason for the dismissal.

In the first instance, it was found that just because the applicant potentially would have benefitted from a reintegration program, that he was unable to perform all the inherent requirements of his position. On that basis, the applicant could perform the requirements of his position and accordingly there was no valid reason for his dismissal. On appeal, the Employer was successful in defending the termination as the Full Bench found that the Employer had a valid reason to terminate the Worker’s employment. The Commission was satisfied that on the evidence before the Commission, at the date of his dismissal, the employee was not able to safely perform the inherent requirements of his position. The Commission was further satisfied that there was no reasonable accommodation that could have been made to enable him to perform the requirements safely.

Key takeaway points for Employers
The Employer must ensure they have a valid reason to dismiss

Employers seeking to terminate employees need to make sure that any supporting evidence is enough to provide a valid reason for an employee’s termination.

Any medical reports commissioned needs to, in explicit terms, seek the practitioner’s opinion as to whether the employee has the capacity to undertake the inherent requirement of a job. Inherent requirements of a role are the elements of a job that are essential and fundamental to a position. Any doctor assessing an employee should be made fully aware of what the inherent requirements of the employee’s position are.

The Commission accepts it is not in a position to substitute its own opinions as to whether an employee can perform their role, meaning that they will rely on the medical evidence at hand. On appeal, it was further compounded that it is not sufficient that the Employer believes there was a valid reason, that reason must be proved.

To the extent that a doctor makes recommendations that adjustments can be made to assist in a worker’s return to work, employers should seriously consider the reasonableness and ability to make those adjustments.

It is important to mitigate you risks that an employee who has been terminated cannot successfully claim that they have been discriminated against on the basis of disability. That is why any dismissal must address whether an employee can perform the most fundamental aspects of their role, so that any action is not considered discriminatory. If an employee returns to work but is not performing, consider performance managing the employee.

Take conflicting medical opinions seriously

The Commission explicitly stated: if there is conflict in medical opinions it is usually incumbent on employers to resolve that conflict. Choosing to ignore a specialist commissioned by the employee simply because it contradicts another report, is likely to result in a disputed termination, and the criticism of the Commission.

The steps an Employer should take in order to mitigate the risk of conflicting opinions depends on the nature of the contradiction. Options may include providing each specialist with the conflicting report and asking whether it changes their opinion in any way, commissioning a third party specialist or drawing conclusions based on both reports.

To the extent that an employer has taken all steps to resolve the conflicting opinions of specialists, the attempts made should be clearly recorded and the rationale behind relying on one doctor’s report made clear.

How long is long enough?

As an employer, it is important to be accommodating to your ill and injured employees. However, there is no hard and fast rule as to how long you should wait before making moves to terminate employment.

The Fair Work Act states that an employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury. ‘Temporary absence’ has been defined as three months consecutively or cumulatively in a twelve month period. However, it is important to note that just because the three month time period elapses, employers do not have a ‘free pass’ to terminate an employee.

In any event, an employer should wait until the employee’s condition has for the most part stabilised (i.e. don’t terminate an employee whilst they are being diagnosed, or shortly post-operative).

To the extent that it is no longer viable to have a position held for an employee who has been on extended sick leave the appropriate steps should be taken to terminate their employment. This includes (among other things) giving an employee notice that the employer is considering terminating their position, allowing them the opportunity to respond. This consultation with an employee should be genuine, and not just perfunctory.

Written by Tony Morgan, Partner and Clarissa Phillips, Solicitor. 

1[2016] FWCFB 4218

Subscribe to HWL Ebsworth Publications and Events

HWL Ebsworth regularly publishes articles and newsletters to keep our clients up to date on the latest legal developments and what this means for your business.

To receive these updates via email, please complete the subscription form and indicate which areas of law you would like to receive information on.

Contact us