Terminating employees due to long absences: What you need to know

by Contributor07 Feb 2019

by Stephen Jenkins-Flint, Employee Relations Lawyer, Airservices Australia 

Section 351 of the Fair Work Act 2009 (Cth) prohibits employers from taking adverse action against an employee because of the person’s physical or mental disability.  The Federal Court’s decision in Robinson v Western Union has caused consternation among employers by holding that an employer who takes adverse action because of the manifestation of a disability is taking adverse action because of the disability itself.  Perhaps more importantly for employers, the Federal Court coupled that approach with a narrow interpretation of what an employer needs to do to show they were acting because of the inherent requirements of the position.  This strict interpretation will make section 351 a hot topic for employers in 2019.     

Factual background of Robinson v Western Union

  • In February 2013, Mr Robinson commenced his employment with Western Union Business Solutions as a Client Executive.  In the financial year ending June 2015, Western Union paid Mr Robinson $247,000 including base salary and commissions.  
  • On 16 September 2016, after raising separate disputes regarding his manager and a commission payment, Mr Robinson commenced what would become an extended period of sick leave.  Mr Robinson provided a series of medical certificates stating that he was suffering from work-related stress, depression and anxiety.  Mr Robinson made an application for worker’s compensation that was denied by QBE Insurance in December 2016.
  • During his absence, Western Union asked Mr Robinson a number of times when he anticipated returning to work.  Mr Robinson provided scant responses, did not provide any timeframe and often simply referred Western Union to his medical certificates.  In January 2017, Western Union directed Mr Robinson to attend a medical assessment arranged by Western Union.  Mr Robinson initially refused to attend.  Despite eventually stating he would attend an appointment against his wishes, Western Union did not persist with arranging a medical assessment.  
  • Mr Robinson’s accrual of paid leave was exhausted in February 2017, though his absence continued on unpaid leave.  Despite repeated requests, Mr Robinson never provided any detail about his prognosis or expected return to work.  
  • On 8 May 2017, after a 7 month absence, Western Union terminated Mr Robinson’s employment.  The termination letter cited three reasons for the termination:
  1. “You have not attended work for a period 7 of months” and “cannot give any indication as to when you will return”;
  2. “Your unreasonable failure to co-operate with Western Union’s attempt to obtain up-to-date specialist medical advice”; and
  3. “the Company’s serious concerns about your capacity to return to work”.
  • Mr Robinson claimed that Western Union contravened section 351 of the Fair Work Act by terminating his employment because of his disability.  

A disability includes its manifestations
Of no controversy in this case is that Mr Robinson’s psychiatric condition amounted to a disability for the purpose of section 351.  What is controversial however, is Justice Flick’s determination that Western Union’s termination of Mr Robinson’s employment because of its “serious concerns about his capacity to return to work” is adverse action taken because of Mr Robinson’s mental disability.  Justice Flick explained, 

…any lack of “capacity” of Mr Robinson to return to work was but a “manifestation” of his claimed mental disability and a “manifestation” that could not be severed from that disability

It is not difficult to see why this reasoning would cause employers consternation.  Employers are frequently forced to manage employees who take long periods of sick leave (paid and unpaid) while refusing to communicate openly with their employer about the nature and prognosis of their illness or injury.  Justice Flick’s ruling that it was unlawful for the employer to bring the curtain down on the saga, even after a period of 7 months of absence due to a disability with no return to work in the foreseeable future, might leave employers faced with a similar situation thinking, ‘must we keep this person employed forever?’ 

Can a disability and its manifestations ever be separated?
In general protections cases, courts have not been consistent in their willingness to distinguish the manifestation (including its practical consequences) of a protected attribute from the attribute itself.  For example, in Hodkinson v Commonwealth , the Court ruled, 
“… while physical or mental limitations may be a disability, or an aspect of a disability, their practical consequences such as absence from work, are not.”  
Similarly, in the prominent case CFMEU v Endeavour Coal the majority of the full Federal Court ruled that adverse action – removal from a profitable roster – taken against an employee because of his frequent use of personal leave was not a contravention of the Fair Work Act because the manifestation of his sick leave use – unreliable attendance – could be separated from the exercise of his workplace right to take sick leave.

However, Justice Flick’s conflation of a manifestation of a disability with the disability itself is not without precedent.  In Keys v Department of Disability, Housing and Community Services, Justice Bennett of the Federal Court dealt with circumstances very similar to those in Western Union.  Mr Keys had been absent from work for an extended period because of a psychiatric condition (adjustment disorder with emotional features).  Eventually, as in Western Union, Mr Keys’ employment was terminated because of his lack of attendance.  The letter of termination stated the reason for Mr Keys’ termination was “his prolonged and repeated period of absence from work in 2008-2009, and his frequent and prolonged inability since 2006 … to carry out any work in his particular position.”  Mr Keys claimed his former employer contravened section 659 of the Workplace relations Act 1996 (the substantially identical predecessor to section 351 of the Fair Work Act).  The Court readily accepted, nor was it disputed, that Mr Keys’ employer terminated his employment because of his disability.

Similarly, in Shizas v Commission of Police, Mr Shizas’ application to become an Australian Federal Police officer was denied because the AFP determined he would not be able to perform certain functions required of an AFP officer due to this chronic back condition (ankylosing spondylosis).  Mr Shizas claimed the AFP had contravened section 351 by taking adverse against him because of his disability. As in Western Union and Keys, the Court had no problem accepting that the manifestation of a disability can be the same thing as the disability itself when it comes to the employer’s reasons for taking adverse action.  As Justice Katzmann concluded:

In the absence of a statutory definition, one must look to the ordinary meaning of the word. In its ordinary meaning “disability” denotes both the condition and its manifestations.” 

Inherent requirements
While the Courts conflated the manifestation of a disability with the disability itself in both Keys and Shizas, they accepted the respective adverse actions were taken because of the inherent requirements of the position. In doing so, the employees’ claims in both Keys and Shizas were dismissed. by way of ‘inherent requirements’ exception.  

Which brings us to what makes Western Union particularly worrying and instructive for employers. What could Western Union have done to show that it took adverse action because of the inherent requirements of Mr Robinson’s position? Justice Flick explained that to avail itself of section 351(2)(b), Western Union would have had to make a decision (and not just have a ‘concern’) that Mr Robinson could not satisfy the inherent requirements of the his position.  As Justice Flick explained:

“…no decision had been taken as to the extent of his incapacity or (indeed) whether or not he was in fact incapacitated for work.  To fall within s 351(2)(b) a decision, it is considered, must be taken as to whether an employee can or cannot satisfy “the inherent requirements of the particular position”… the [termination] letter correctly stated that [Western Union] had no more than “concerns” as to the capacity of Mr Robinson to return to work.” 

Many readers with an employer perspective will find this interpretation harsh and undeservedly pedantic.  In the context of (i) a 7 month open-ended absence; (ii) an employer actively trying to facilitate the employee’s return to work; and (iii) a letter of termination that refers to the employee’s extended absence as a reason for the eventual termination, it should be obvious, one might argue, that Western Union was acting because of the employee’s failure to perform the most fundamental of inherent requirements – to attend and do work – for a sustained period.  

Indeed, the Court in Keys readily accepted the evidence of the employer that “attendance at work was an inherent requirement of the job… to arrive at work. To be at work. To provide the services to the people we provide services to.”  Put another way, the Court accepted “sustainable, reasonable attendance at work” was an inherent requirement of the position. The proposition that attendance at work is an inherent requirement of a position is not controversial.

Western Union’s error was to not say with certainty (rather than mere ‘concern’) in the termination letter, and then confirm again at trial, that it terminated Mr Robinson because of his failure to satisfy the inherent requirement of his position – specifically, the inherent requirement to sustain reasonable attendance and perform the duties of a Client Executive. 

An employer’s assessment the inherent requirements can be wrong
In better news for employers, courts have agreed that an employer’s assessment that an employee has not, or will not, satisfy the inherent requirements of the job need not be proved accurate.  The decision maker needs to have arrived at a positive belief, even if they were wrong, that the employee (or prospective employee) had failed the inherent requirements of the position. 

What is the function of section 352?
It remains unclear whether Courts will in the future apply section 351 in light of section 352 of the Fair Work Act.  Section 352 prohibits employers from terminating employment because of an employee’s temporary absence due to illness injury.  The Fair Work Regulations define ‘temporary’ as a period of less than 3 months (continuously or total absences within a 12 months period), or as an absence on paid personal leave.  The legislative inference created by the inclusion of section 352 is that employers are not prohibited from terminating the employment of unfit employees when their absences are longer than temporary.  The interpretation of section 351 by Justice Flick in Western Union runs contrary to the legislative intent of section 352 – almost to the degree that Western Unions strips section 352 of any meaningful work to do within the legislative scheme. While former employees are free to choose which section of the Fair Work Act they bring a claim, in cases like Western Union, which is typical of many fraught employment relationships, there is a strong policy argument that courts should accept, as implied by section 352, employers are not prohibited from terminating the employment of an employee’s whose absence due to illness or injury is longer than temporary.

Conclusion
When terminating the employment of an individual who is unfit for work as a result of a disability, employers should expressly state in their letter of termination that the termination is because of the inherent requirements of the position. Moreover, employers should ensure they express that as the reason, including identifying with certainty the particular inherent requirement not being satisfied.  In the circumstances of a sustained absence, while it is worth framing a decision to terminate as being because of the absence rather than the disability itself, in the wake of the decision in Western Union, employers cannot rely on courts recognising that distinction. 

Until this issue is dealt with by an appellate court, the application of section 351 remains unsettled. 

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