A recent decision of the Full Bench of the Fair Work Commission (Commission) has confirmed the approach to be taken when determining whether there is a valid reason for dismissal relating to an employee's capacity when there is conflicting medical evidence about the employee's prognosis.

This recent decision of the Commission is different to an earlier Full Bench authority, which left the determination of conflicting medical opinion up to the employer.

So what should employers rely on when dismissing employees due to incapacity to perform the inherent requirements of their role?

Generally, an employer will rely on an expert medical opinion supporting its position to dismiss an employee. However, there will often be conflicting medical opinions or other evidence in respect of the alleged incapacity.

In resolving conflicts in medical opinion and evidence, there has been conflicting approaches by the Commission arising from two earlier Full Bench decisions:

The recent Full Bench decision of CSL Ltd T/A CSL Behring v Papaioannou [2018] FWCFB 1005 (CSL) in February of this year, has stated that the approach to be followed is that of Jetstar, meaning that an employer's right to follow its own medical evidence is restricted.

The employee in the CSL decision had been off work for a period of 38 weeks and was in receipt of 'salary continuance' pursuant to the terms of the enterprise agreement when CSL terminated his employment on the basis that he had no capacity to perform his pre-illness duties. In making this decision, CSL relied on independent medical evidence that concluded that the employee would not be fit to return to work within a 12 month period. However, this was in conflict with the employee's long-term treating psychiatrist, regarding the prognosis of the employee's illness.

The Full Bench observed that in a dismissal related to an employee's capacity, the Commission is required to consider and make findings as to whether, at the time of dismissal, the applicant suffered from the alleged incapacity based on all the relevant medical and other evidence before the Commission.

Approach for employers going forward

Employers should ensure that any medical opinion and evidence relied upon to justify a dismissal based on medical incapacity clearly supports that outcome and is to be preferred over other competing evidence. This is because any dispute on the facts will be determined by the Commission on the basis of available evidence.

What about after acquired medical information?

In Hyde v Serco Australia Pty Ltd [2018] FWC 2465 (Hyde), which was delivered in May of this year, the Commission rejected a claim that the decision in CSL required the Commission to consider medical reports obtained after the date of a dismissal. The Commission in Hyde found that the decision in CSL only required the Commission to have regard to conflicting medical evidence that existed at the time of the decision to dismiss the employee.

Lessons for employers

Employers must remember that the ability to dismiss an employee due to incapacity to perform the inherent requirements of their role will always depend on the circumstances of the individual case. Going forward, employers need to ensure that their decision making processes:

  • Consider conflicting medical evidence in relation to incapacity, and the employer's reasons for preferring one medical opinion over another
  • Don't automatically prefer the opinion of an independent medical examiner over a treating doctor, particularly if the treating doctor is a specialist. In considering the balance of medical opinion, the Commission is likely to take into account the familiarity of the treating doctor with the employee, and the treating doctor having made their assessment with the benefit of various consultations with the employee.

The process of dismissing an ill or injured employee can be complex because it must have regard to a number of key avenues pursuant to which the employee can make a claim, including potentially under anti-discrimination legislation and the general protections provisions of the Fair Work Act 2009 (Cth) in addition to the unfair dismissal regime.

The recent decisions of the Commission demonstrate the importance of employers seeking legal advice before dismissing an ill or injured employee to ensure the assessment of the employee's capacity to perform the inherent requirements of the role is reasonable and appropriate on the evidence before them.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.