Termination and Medically Unfit for Work

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Terminating the employment of an injured employee is notoriously fraught with legal risk. Amongst other things, the employer must establish that the employee cannot perform the inherent requirements of his or her position. This is often not straightforward, and will frequently involve different medial assessments. As we know, not all doctors see eye to eye.

This issue has recently been clarified by the full bench of the Fair Work Commission (FWC).

The FWC identified two competing decisions when dealing with dismissals on medical grounds:

  1. Jetstar Airways Ltd v Neeteson-Lemks, supported the view that the FWC must itself make findings based on the evidence as the employee’s capacity when determining whether a dismissal is unfair; and
  2. Lion Dairy & Drinks Milk Ltd v Norman, which supported the view that the FWC is not able to make expert findings, and that if there is a conflict, it is incumbent on the employer to resolve that conflict.

Following this decision, if the employer has reasonably relied upon medical evidence, that is the end of the matter. The FWC only steps in if the reliance on the medical evidence was unreasonable, for example, if the medical report was vague and not categorical about the employee’s capacity.

The FWC has now decided that in determining whether there is a valid reason for dismissal based on an employee’s incapacity, the FWC must make findings as to:

  • Whether the employee suffers from the alleged incapacity;
  • Whether the employee can perform the inherent requirements of the position; and
  • Whether and when the employee is likely to recover and what reasonable adjustments can be made.

The consequences of the new decision from the FWC provides guidance on determining whether an employee is fit for work on the basis of the evidence given in any such proceedings, as apposed to the employer’s assessment of the information provided to it at the time of dismissal. Employers will therefore bear a higher evidentiary burden to establish an employee’s incapacity, and such evidence will be the subject of close scrutiny.

With the knowledge that the medical evidence relied upon by an employer may be tested in the FWC, employers themselves should carefully consider conflicting medical evidence and assess the weight to be placed on such evidence. Factors that are likely to be considered relevant include the specialisation and expertise of the medical practitioner as relevant to the employee’s condition; the knowledge and experience the medical practitioner has had treating the employee, and the medical practitioner’s understanding of the work required to be undertaken by the employee. It may also be appropriate to have the employee’s treating practitioner comment on the independent medical assessment.



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Raea Khan Circle
Director Lawyer
Raea Khan

Raea is Managing Director and Principal Lawyer for PBl Law Group. Raea assists clients with major projects, property developments, construction and strata law.

He has worked in Western Australia and Queensland assisting with expansion projects in the energy and resource sector and now predominately advises clients in Strata and Community Association matters.

He is a member of the Australian College of Strata Lawyers where majority of his work is advising developers and owners corporations with dispute related minor and major defects, strata governance and common property litigation. He is proficient at leading negotiations and meetings.

Raea has a particular interest in the commercial aspect of any dispute and always tries to weigh up the risk, reward and benefit of legal proceedings at each different stage.

Raea enjoys all forms of competitive sport, including Crossfit and actively participates in Triathlons, representing Australia as an age group athlete. He was a member of Red Head Surf Lifesaving club.

  • Strata Law
  • Construction & Major Projects
  • Commercial and Business Law
  • Planning & Environment Law