19 September, 2016
Lion Dairy and Drinks Milk Limited v Peter Norman [2016] FWCFB 4218
What you need to know
- A Full Bench of the Fair Work Commission has recently clarified an employer's obligations when terminating the employment of an employee on the basis of capacity relating to injury.
- The test as to whether a valid reason for termination of employment exists differs between dismissal for conduct and dismissal based on capacity. Termination of employment on the ground of capacity usually requires an employer to have regard to an expert medical opinion or opinions, whereas misconduct cases typically require the employer to make a finding of whether the employee engaged in the alleged conduct.
- Clear medical evidence stating that an employee cannot perform the inherent requirements of their position is important to be able to demonstrate a valid reason to terminate an employee's employment based on their capacity.
- It is appropriate for medical assessments to refer to the capacity of the employee to perform the full duties of the employee's substantive position.
- An employer should also consider whether any reasonable adjustments may be made to the employee's role to accommodate any current or future incapacity. However, the reasonableness of these adjustments should be considered within the context of the employee's substantive position or role and not any modified, restricted or temporary alternative role.
- In an unfair dismissal case relating to an employee's capacity, the Fair Work Commission does not need to determine whether an employee can perform the inherent requirements of the role. Rather, they must determine whether, at the time of the employee's dismissal, there was a valid reason for the dismissal that was sound, defensible and well founded.
What you need to do
- Ensure that any fitness for duty assessments that you seek to rely on relate to the capacity of an employee to perform the full duties of the employee's substantive position.
- When deciding whether an employee's employment should be terminated, first consider whether any reasonable adjustments could be made that would allow the employee to fulfil the inherent requirements of their substantive position.
- Address any conflicting medical evidence (such as by requesting a further medical assessment) before making a decision as to whether to terminate an employee's employment on the grounds of their capacity.
A recent decision of a Full Bench of the Fair Work Commission highlights the importance of seeking clear medical evidence relating to the capacity of an employee to perform the inherent requirements of their role when considering terminating their employment on the basis of their capacity, and what steps an employer may take when faced with conflicting medical evidence during this process.
Dismissal due to lack of capacity
In Lion Dairy, a Maintenance Fitter employed by the employer had been injured in a skydiving accident in February 2014. One year later, the employer requested that the employee attend a medical assessment with an occupational physician to determine his capacity to return to work. The employer provided the occupational physician with details of the duties required to be performed by the employee as a Maintenance Fitter.
The medical report prepared by the occupational physician stated that it was unlikely that the employee would be able to perform the inherent requirements of his position in the near future.
On 25 March 2015, during a meeting with the employer, the employee provided the employer with a medical certificate from his treating surgeon that stated that the employee was fit to return to work on 30 March 2015.
In light of this conflicting evidence, the employer sought additional medical evidence from their medical expert (the occupational physician). While not re- examining the employee, the occupational physician confirmed his opinion that the employee was not fit to return to work. The physician also indicated that he assumed the medical certificate provided related to the employee's recovery from the injury, and not to the different question of the employee's
ability to perform the inherent requirements of the role.
On the basis of the further medical report provided by the occupational physician, the employee was required to attend a show cause meeting on 1 April 2015, in which he was given until 7 April 2015 to respond to the show cause letter. When asked, the employee did not give permission to the employer to discuss his prognosis with the employee's treating surgeon. On 15 April 2015, after considering the employee's limited show cause response, the employer terminated the employee's employment on the basis that the employee lacked the capacity to fulfil the inherent requirement of his position.
Valid reason
Conduct vs capacity
At first instance, Deputy President Bartel preferred the evidence led by the employee's treating surgeon and found that it was wrong to conclude that the employee was unable to perform the inherent requirements of the position. Accordingly, there was no valid reason for dismissal.
In overturning this finding, the majority (Deputy Vice President Watson and Commissioner Wilson) considered the distinction between a termination of employment due to conduct and a termination of employment due to an employee's capacity:
- for conduct related matters, the FWC is required to determine, based on the evidence before it, whether the alleged conduct occurred; but
- for capacity cases, the FWC is required to have regard to the medical opinions and evidence available to the employer at the time of the decision to dismiss the employee.
Findings of the majority
The majority:
- confirmed that it is not the FWC's role in capacity cases to determine whether they themselves would have terminated the employee's employment, but rather whether, in the circumstances, a valid reason for termination existed at the time of the termination;
- held that, when determining whether a valid reason exists for terminating an employee's employment on the grounds of capacity, that reason must be sound, defensible and well founded, and not capricious, fanciful, spiteful or prejudiced. This should be considered in the context of ensuring a "fair go all round"; and
- held that the employer's actions in accepting the occupational physician's report (which was the most comprehensive medical advice and related to the ability of the employee to perform the inherent requirements of the role) was sound, defensible and well founded and hence, was a valid reason for the dismissal.
Inherent requirements
What are the inherent requirements of the position?
In this case, the majority confirmed that the mere existence of a requirement in an employment contract does not necessarily make it an inherent requirement of that position.
The majority confirmed that medical assessments of an employee's capacity to undertake the inherent requirements of their position refers to the capacity for the full duties of the employee's substantive position and not a position that has been modified or restricted, or a temporary alternative position.
Reasonable adjustments
The majority held that reasonable adjustments should be taken into account by an employer when considering an employee's capacity to perform the inherent requirements of their position.
This means that, while an employer should consider reasonable adjustments, these adjustments are to allow the employee to fulfil the inherent requirements of their substantive position, not of a modified or restricted position.
In this case, it was held that there were no reasonable adjustments that could have been made to allow the employee to continue to fulfil the inherent requirements of the position.
What about medical evidence?
Fitness for duty assessments
Lion Dairy highlights the importance of properly drafted requests for fitness for duty assessments, and the need to balance potentially conflicting medical evidence.
In order to rely on a medical assessment, employers will generally need to provide the expert with a full description of the employee's duties based on their actual position, rather than a position that has been modified or amended, or any temporary position that the employee may have been transferred to.
Requests should also be broad enough to capture a wide range of potential injuries. For example, while in Lion Dairy the employee's skydiving injury no longer prevented him from working, another unrelated injury did mean that
the employee continued to be unfit for work for the near future.
Employers should also ask medical experts to consider any reasonable adjustments that could be made that would allow an employee to continue to fulfil the inherent requirements of their position. While capacity assessments are to be based on an employee's substantive position, any reasonable adjustments that could be made should be considered.
MAKING THE CASE: Insights from Geoff Giudice
In dealing with the concept of "valid reason" in cases of termination of employment for incapacity, the Full Bench in this case drew a distinction between an investigation into misconduct and an investigation into incapacity. The first involves fact-finding, the second expert opinion and evaluation by the employer.
The Bench said that in cases of termination for incapacity the relevant question is whether there was a valid reason for the termination in the circumstances confronting the employer at the time. Presumably this approach would not operate to exclude cogent evidence of which the employer was unaware at the time the decision was made. Even if not relevant on the question of "valid reason", such evidence could be considered by the Commission under its general power to take relevant matters into account.
For further information, please contact:
Vince Rogers, Partner, Ashurst
vince.rogers@ashurst.com
