The tribunal has shed light on employer obligations for termination based on capacity if an employee is medically unfit
A recent decision by the Fair Work Commission has shed light on an employer’s obligations when terminating an employee on the basis of capacity relating to injury.
Peter Norman, a maintenance fitter at Lion Dairy & Drinks, filed an unfair dismissal case with the FWC after the firm terminated his employment. Reasons given were that he was unfit for work due to medical reasons. Although the FWC initially ruled in favour of Norman, a later appeal ruled in favour of Lion and granted that the dismissal was reasonable.
Initial investigations
In February 2014, Norman was injured in a skydiving incident. A year later, Lion ordered Norman to undergo a medical assessment to determine whether he had the capacity to return to work.
The company’s occupational physician examined Norman – after being given details of the duties expected of his role – and determined that he was unfit to return to work.
In March 2015, Norman then provided Lion with a medical certificate from his own treating surgeon stating that he actually had the capacity to return to work.
Due to the conflicting evidence, Lion asked its occupational physician to gather more evidence on the matter. While he did not conduct a re-examination, the physician reaffirmed the initial decision that Norman was unfit to return to work.
When Norman was dismissed in April 2015, the case was brought before the FWC which granted that the dismissal was unfair. Lion then successfully appealed this decision.
Capacity versus conduct
The majority found that the role of the FWC in capacity-based cases was not to determine whether the commission would have terminated the employee, ie by examining whether the employee could have indeed performed his or her duties. Instead, the role was to determine whether there was a valid reason for termination at the time the decision is made.
This sets termination based on capacity apart from that based on conduct. In the latter, the FWC is required to determine whether the actual misconduct occurred.
Furthermore, the reason for terminating employment on the grounds of capacity must be sound, defensible and well-founded, the Commission found.
“What this means in a case such as this dealing with an employee's incapacity is that the employer has clear medical evidence that it can rely upon which shows that the employer is unable to perform the inherent requirements of the job and is unlikely to do so for a period of time,” Vince Rogers, partner at Ashurst, told HC.
“That evidence would then be the basis for the employer to make a decision to terminate the employee's employment.”
In the case of Lion versus Norman, the employer’s actions of accepting the occupational physician’s report were deemed sound, defensible and well-founded.
Final considerations
However, the decision does not mean that employers can simply dismiss employees after injury affects their capacity to work, Rogers said.
“The employer should also consider whether there are any reasonable adjustments that could be made taking into account the employee's impairment and/or work restrictions."
What is reasonable will depend on a number of issues such as the nature of the adjustments, the cost, the size of the employer, and the impact on the employer and its operations.
“In some instances the cost of the adjustment could rule it out especially if it is a small employer. In other situations it could be that the nature of the role may preclude accommodating that type of adjustment,” he said.
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Peter Norman, a maintenance fitter at Lion Dairy & Drinks, filed an unfair dismissal case with the FWC after the firm terminated his employment. Reasons given were that he was unfit for work due to medical reasons. Although the FWC initially ruled in favour of Norman, a later appeal ruled in favour of Lion and granted that the dismissal was reasonable.
Initial investigations
In February 2014, Norman was injured in a skydiving incident. A year later, Lion ordered Norman to undergo a medical assessment to determine whether he had the capacity to return to work.
The company’s occupational physician examined Norman – after being given details of the duties expected of his role – and determined that he was unfit to return to work.
In March 2015, Norman then provided Lion with a medical certificate from his own treating surgeon stating that he actually had the capacity to return to work.
Due to the conflicting evidence, Lion asked its occupational physician to gather more evidence on the matter. While he did not conduct a re-examination, the physician reaffirmed the initial decision that Norman was unfit to return to work.
When Norman was dismissed in April 2015, the case was brought before the FWC which granted that the dismissal was unfair. Lion then successfully appealed this decision.
Capacity versus conduct
The majority found that the role of the FWC in capacity-based cases was not to determine whether the commission would have terminated the employee, ie by examining whether the employee could have indeed performed his or her duties. Instead, the role was to determine whether there was a valid reason for termination at the time the decision is made.
This sets termination based on capacity apart from that based on conduct. In the latter, the FWC is required to determine whether the actual misconduct occurred.
Furthermore, the reason for terminating employment on the grounds of capacity must be sound, defensible and well-founded, the Commission found.
“What this means in a case such as this dealing with an employee's incapacity is that the employer has clear medical evidence that it can rely upon which shows that the employer is unable to perform the inherent requirements of the job and is unlikely to do so for a period of time,” Vince Rogers, partner at Ashurst, told HC.
“That evidence would then be the basis for the employer to make a decision to terminate the employee's employment.”
In the case of Lion versus Norman, the employer’s actions of accepting the occupational physician’s report were deemed sound, defensible and well-founded.
Final considerations
However, the decision does not mean that employers can simply dismiss employees after injury affects their capacity to work, Rogers said.
“The employer should also consider whether there are any reasonable adjustments that could be made taking into account the employee's impairment and/or work restrictions."
What is reasonable will depend on a number of issues such as the nature of the adjustments, the cost, the size of the employer, and the impact on the employer and its operations.
“In some instances the cost of the adjustment could rule it out especially if it is a small employer. In other situations it could be that the nature of the role may preclude accommodating that type of adjustment,” he said.
Related stories:
FWC criteria for enterprise agreement termination
Why was this racist employee reinstated?
How quickly can you move from warnings to termination?
