Dis­miss­ing employ­ees on grounds of inca­pac­i­ty where the employ­er is alleged to have caused the incapacity

One of the most chal­leng­ing issues employ­ers face is deal­ing with employ­ees who are not well enough to per­form their duties. 

There some­times comes a point where – when faced with an employ­ee who has been on an extend­ed peri­od of sick leave — the employ­er con­sid­ers the pos­si­bil­i­ty of ter­mi­nat­ing the employment.

Such deci­sions are often far from straight-for­ward. Aside from the employ­er’s wish to ensure that they are doing the right thing” by their employ­ee, there are also the legal risks asso­ci­at­ed with ter­mi­na­tion of employ­ment involv­ing an injured or unwell employee. 

Mat­ters are espe­cial­ly com­pli­cat­ed where the employ­ee’s unfit­ness for work is due to men­tal health issues which may have been caused, or exac­er­bat­ed by the work environment.

The recent deci­sion of [2018] FWC 3767 pro­vides some guid­ance on how the Fair Work Com­mis­sion approach­es such issues in the con­text of a claim for unfair dismissal.

The back­ground to the case was the employ­ee had been employed by Rogerseller since 2002, most recent­ly in the role of Concierge Deliv­ery Specialist.

In 2017 there began to be issues in the work­place and two of the employ­ee’s col­leagues made com­plaints about her behav­ing in a neg­a­tive man­ner”.

Con­cur­rent­ly to this, the employ­ee made a com­plaint about bul­ly­ing behav­iour” by some of her co-workers.

Rogerseller inves­ti­gat­ed the employ­ee’s com­plaint and came to the view that it was unsub­stan­ti­at­ed. This was com­mu­ni­cat­ed to the employ­ee in a meet­ing on 16 Feb­ru­ary 2017. The meet­ing became heat­ed and the fol­low­ing day the employ­ee left work ear­ly due to ill­ness. She did not return to work until 6 March 2017.

On the day of her return to work, Rogerseller held a meet­ing with the employ­ee and advised her for the first time of the com­plaints made by her two col­leagues, as well as noti­fy­ing her about a com­plaint made by a cus­tomer and oth­er per­for­mance con­cerns”. In the meet­ing the employ­ee was issued with a for­mal writ­ten warning.

Short­ly there­after the employ­ee com­menced a fur­ther peri­od of sick­ness absence for which suc­ces­sive med­ical cer­tifi­cates were obtained. The cer­tifi­cates stat­ed her diag­no­sis was Work­place harass­ment caus­ing anx­i­ety symp­toms and reduced mood”. Her capac­i­ty for work was stat­ed to be No capac­i­ty for work until work­place con­flict is resolved”.

Dur­ing her absence the employ­ee made a claim for work­ers com­pen­sa­tion on 14 March 2017, but the claim was refused by Rogerseller’s insurer.

There­after cor­re­spon­dence was entered into between Rogerseller and the employ­ee’s representatives. 

The employ­ee sub­se­quent­ly was sub­ject to a num­ber of med­ical exam­i­na­tions to assess her fit­ness for work. 

On 29 Novem­ber 2017 a Con­sul­tant Psy­chi­a­trist (Dr Cohen) cer­ti­fied the employ­ee as per­ma­nent­ly unfit for her usu­al job” and not fit to return to work at Rogerseller.”

On 4 Decem­ber 2017 Rogerseller wrote to the employ­ee advis­ing that it was con­sid­er­ing ter­mi­nat­ing her employ­ment because she was not able to ful­fil the inher­ent require­ments of her role and invit­ing her to respond by 14 Decem­ber 2017.

The employ­ee’s rep­re­sen­ta­tive replied by let­ter of 14 Decem­ber 2017. The reply includ­ed a state­ment that the employ­ee was unable to return to her sub­stan­tive posi­tion”.

Rogerseller ulti­mate­ly ter­mi­nat­ed the employ­ee’s employ­ment on 18 Decem­ber 2017.

The employ­ee sub­se­quent­ly brought a claim for unfair dis­missal in the Fair Work Com­mis­sion on grounds includ­ing because it fol­lowed a peri­od of unre­lent­ing harass­ment and intim­i­da­tion and was pro­ce­du­ral­ly unsound”.

In con­sid­er­ing the mat­ter, Com­mis­sion­er McK­in­non recalled pre­vi­ous caselaw and con­firmed that when an employ­er relies upon inca­pac­i­ty to per­form the inher­ent require­ments of an employ­ee’s posi­tion as the ground for dis­missal, it is the sub­stan­tive posi­tion that must be con­sid­ered and not some mod­i­fied, restrict­ed duties or tem­po­rary alter­na­tive position. 

In assess­ing the evi­dence on the employ­ee’s capac­i­ty to per­form her role, the Com­mis­sion had this to say:

[36] The evi­dence estab­lish­es that at the time of dis­missal, [the employ­ee] was able to phys­i­cal­ly per­form the inher­ent require­ments of her role. Her own evi­dence, which I accept, was that she was phys­i­cal­ly fit, par­tic­i­pat­ing in yoga and a range of oth­er non-work activities.

[37] How­ev­er, the evi­dence also estab­lish­es that at the time of dis­missal, [the employ­ee] was suf­fer­ing from a psy­cho­log­i­cal con­di­tion which pre­vent­ed her return to work at Rogerseller. Dr Cohen iden­ti­fied the prospect of her return­ing to work at Rogerseller as a key stres­sor for her con­di­tion and one which was like­ly to cause relapse’. The obvi­ous dif­fi­cul­ty for [the employ­ee] was that return­ing to work was a nec­es­sary step for her to under­take her role and all of its inher­ent require­ments. There is no evi­dence the role could have been per­formed any­where oth­er than at Rogerseller’s premis­es, or with­out inter­act­ing with its key man­age­ment and sales staff. On bal­ance, I am sat­is­fied that at the time of dis­missal, [the employ­ee] did not have the capac­i­ty to per­form the inher­ent require­ments of her role as a Concierge Deliv­ery Spe­cial­ist because her psy­cho­log­i­cal con­di­tion pre­vent­ed her return to work at Rogerseller at all.

Accord­ing­ly the Com­mis­sion­er found that there had been a valid rea­son to ter­mi­nate the employ­ee’s employment. 

The Com­mis­sion­er did not find any mate­r­i­al defects in the pro­ce­dure used to effect the dis­missal (not­ing that the employ­ee had been noti­fied for the rea­son for dis­missal and giv­en an oppor­tu­ni­ty to respond). 

Ulti­mate­ly, there­fore, the Com­mis­sion found that the employ­ee had not been unfair­ly dismissed.

Inter­est­ing­ly, the Com­mis­sion­er’s deci­sion on the fairness/​unfairness of the dis­missal did not appear to be impact­ed by the fact that the employ­ee’s unfit­ness to work may have been trig­gered by a chain of events she con­sid­ered harass­ment and intim­i­da­tion”. The Com­mis­sion­er put it this way: 

[49] A sig­nif­i­cant fea­ture of this case from [the employ­ee’s] per­spec­tive was that she was able to per­form the inher­ent require­ments of her role until Feb­ru­ary 2017, when a chain of events she con­sid­ered harass­ment and intim­i­da­tion trig­gered the dete­ri­o­ra­tion of her health. There is some evi­dence to sup­port that con­cern, hav­ing regard to the appar­ent man­ner in which the var­i­ous com­plaints by and against [the employ­ee] were han­dled in Feb­ru­ary and March 2017 and I do not doubt that 2017 was a dif­fi­cult year for [the employ­ee]. [….]

[50] […] The events of Feb­ru­ary and March 2017 were ulti­mate­ly not what brought about the end of [the employ­ee’s] employ­ment. As a result, it is not nec­es­sary to make find­ings about the sub­stance of com­plaints made or relat­ed process­es or even whether the per­for­mance man­age­ment process was rea­son­able. There is no evi­dence that any of those mat­ters were oper­a­tive fac­tors in the dis­missal and I am not sat­is­fied that they were.

The case is also a use­ful reminder to employ­ers of the impor­tance of obtain­ing a clear med­ical opin­ion when tak­ing deci­sions relat­ing to an employ­ee’s capac­i­ty to per­form work. In this case the med­ical evi­dence includ­ed an unequiv­o­cal state­ment that the employ­ee was per­ma­nent­ly unfit for her usu­al job”.

In cir­cum­stances where the employ­ee is giv­en an oppor­tu­ni­ty to, but does not dis­pute, any such find­ing (by, for exam­ple, pro­vid­ing a con­tra­dic­to­ry med­ical opin­ion), an employ­er will gen­er­al­ly be in a strong posi­tion to dis­miss with­out sig­nif­i­cant risk of a find­ing of unfair dismissal. 

Where the med­ical evi­dence is less clear cut – per­haps where there is a sug­ges­tion that the employ­ee will be fit to per­form their role at some point in the future – the risks to an employ­er who ter­mi­nates employ­ment will be much greater.