Australia: Recent cases dealing with the management of ill and injured employees

HG Alert: 14 August 2014
Last Updated: 22 August 2014
Article by Andrew Tobin and Troy Wild

For employers, effectively managing ill (whether physically or mentally) or injured workers is one of the most problematic areas of human resource management. It is fraught with numerous regulatory and litigation risks, including for managers and HR professionals personally implementing an employer's decision.

The cause for the difficulty is the significant potential, when dealing with ill and injured workers, for the intersection of a variety of federal and state legislation requiring small and large employers alike to take into account often competing business considerations and onerous industrial obligations.

Despite an employer's best intentions, a variety of legal claims can follow management decisions made in relation to an ill or injured worker, particularly when a decision is made to dismiss.

Our Industrial and Employment Law team are running breakfast seminars in Brisbane (21 August) and Perth (28 August), covering the relevant risks; recent case experiences and how employers can seek to manage workers with illnesses, injuries and disabilities while minimising their risk exposure. Please click here for more information and to register.

Meanwhile, in this Alert we draw together some of the relevant principles demonstrated by recent case experiences in the Fair Work Commission and Federal Court.

Key points

  • In misconduct cases, stop to consider whether the behaviour in question is caused or affected by an underlying psychological or psychiatric illness. If there potentially is an underlying explanation for the conduct found in some kind of mental dysfunction, take care to exclude (or otherwise account for) it before relying upon the conduct as a basis for dismissal or other discipline.
  • There may be circumstances where an employer is entitled to go beyond medical information provided by an employee in relation to their health by requiring further, more detailed information, or by requiring the worker to co-operate with the employer's own investigation of those issues through an independent examination. This entitlement does not depend upon the worker's express consent, so long as the employer acts reasonably.
  • Ultimately, it can be lawful to dismiss a worker who, on account of an injury or illness, ceases to be capable of performing the inherent requirements of their position. However, before reaching this point, employers need to take care that appropriate procedural fairness is extended to the worker. What is fair will vary from case to case. Common elements will include:
    • a sufficiently thorough exploration of the issues;
    • following the employer's own procedures;
    • fully instructing external advisers in relation to all relevant facts and issues, and;
    • seeking appropriate input from the worker prior to dismissal.
  • Even in circumstances where a worker is not legally protected from dismissal because their absence from work – on account of illness or injury – has ceased to be "temporary" for the purposes of the Fair Work Act, dismissal might still be challenged as unlawful or unfair.

Consideration of mental health issues

Ronaldo Salazar v John Holland Pty Ltd T/A John Holland Aviation Services Pty Ltd [2014] FWC 4030 (26 June 2014)

In this case the Fair Work Commission, in finding that an aircraft engineer's dismissal was unfair, criticised managers at John Holland's former Tullamarine Airport maintenance division for failing to take into account the employee's mental health when they dismissed him for misconduct.

The engineer was dismissed after refusing to change rosters and for allegedly making "alarming, incorrect and threatening statements" about John Holland and its managers. The engineer sent an email to John Holland's managing director, which included references to management being, "incompetent and trying to kill me and my family".

The engineer had been unable to work for six months prior to his dismissal because of mental health issues. Commissioner Ryan said that in light of the medical certificates, which showed that the engineer was being treated by a psychiatrist and psychologist, it "appears totally unreasonable for the [company] to come to the conclusion that the [employee] engaged in serious misconduct".

Commissioner Ryan said it was unreasonable that John Holland management had sought to hold the engineer "accountable for his actions whilst suffering from a mental health issue". He said that, "It is neither sound nor defensible to rely upon the conduct of an employee with an obvious mental health problem in drawing a conclusion that the conduct of the employee amounts to serious misconduct".

Evidence of illness or injury

Australian and International Pilots Association v Qantas Airways Ltd [2014] FCA 32 (6 February 2014).

This was a decision of the Federal Court in which a Qantas Boeing 747 pilot's claim – to have been subjected to unlawful adverse action in connection his employment with Qantas – was dismissed. Qantas had been seeking to take disciplinary action against the pilot as a result of his failure to provide information to Qantas in relation to his medical situation. The pilot had been absent from work as the result of illness for an extended period.

One of the issues in the case was whether the provisions of the enterprise agreement applicable to the pilot's employment with Qantas were exhaustive of the rights of Qantas and its employees in relation to when or why Qantas could require an employee to undergo a medical examination or provide it with further information in relation to the employee's medical condition.

The enterprise agreement contained various provisions relating to the taking of sick leave including the obligations of employees to notify Qantas of illness and the circumstances in which an employee was required to produce a medical certificate.

These provisions were in addition to an employer's statutory right to request evidence (or further evidence) of the reasons for an employee's absence under the Fair Work Act.

The Court found that the provisions of the Fair Work Act and enterprise agreement were not the exclusive basis for Qantas' entitlement to require an employee to provide medical evidence. The Court determined that an employer has a right, in addition to rights provided for in the Act or an applicable industrial instrument, to require an employee to provide medical information and, if necessary, to require the employee to attend a medical examination to procure that information. The right to this information is implied by law into employment agreements because it is necessary to allow the employer to comply with its statutory work health and safety obligations.

"The employer must be able to obtain appropriate medical information to ascertain, first, whether its work place or some matter for which it is legally responsible under such legislation has not been a cause of the employee's condition and, secondly, if it has, how to remedy that situation as soon as practicable."

The Court relied on an earlier decision of the Federal Court in Blackadder v Ramsey Butchering Services Pty Ltd (2002) 188 FCR 395 in support of the implication by law of such a term into employment contracts.

The Court also stated that the employer's right to this information was necessary to allow the employer to make its own business arrangements to adjust for the impact that the sick leave caused to its operations. This was said especially to be the case where "uninformative medical certificates" are provided.

Grant v BHP Coal Pty Ltd [2014] FWCFB 3027 (18 June 2014)

Similarly, in June this year a full bench of the Fair Work Commission upheld an employer's rights to:

  • direct one of its employees to undergo a medical examination by a doctor nominated by the employer; and
  • to dismiss the worker when he refused to co-operate.

The worker, a boilermaker with BHP Coal, sought to return to work after a long absence on account of a shoulder injury. BHP sought, by arranging its own medical examination of him, to determine if it was safe for him to return to work. In circumstances where the worker had only produced medical certificates in general terms, the full bench said that BHP's requirement that he participate in a company sponsored examination was a reasonable and lawful instruction within the scope of his contract of employment.

The worker refused to cooperate and BHP dismissed him. The worker's claim to have been unfairly dismissed was rejected, both at first instance and on appeal.

Dismissal for inability to perform inherent requirements of position

Ronald MacDonald v Jetstar Airways Pty Limited T/A Jetstar [2014] FWC 488 (31 January 2014)

In this case Jetstar successfully defended an injured worker's unfair dismissal claim.

The worker – employed as a flight attendant – was dismissed after an independent assessor determined that the worker could no longer perform his job on the basis that he should avoid lifting objects weighing more than 3-5kg or performing repetitive reaching movements. The assessor also determined that the worker was not fit to deal with flight cabin emergency procedures.

The worker claimed that any lifting of heavy weights could be assigned to a colleague. This, however, was in breach of the Civil Aviation Regulations 1988. Commissioner Bull said that, "There is no scope to be deficient in one area by relying on the ability of another crew member".

The reason given for his dismissal was that the worker, according to the evidence, was no longer able to perform the inherent requirements of his role, and, that there were no reasonable adjustments that Jetstar could make to allow him to do so. Jetstar's decision to dismiss and its reasoning was accepted by the Fair Work Commission. However, the employer was criticised in relation to its processes leading up to the dismissal. These included that:

  • the manager who ultimately determined the worker should be dismissed, was "basically unfamiliar" with Jetstar's workplace injury policies. He'd never seen some of them and, as a result, Jetstar did not follow some of its own processes;
  • Jetstar failed to provide their own assessor with a medical report the worker had himself obtained, and, did not tell the assessor that the worker successfully completed emergency training in 2012 (the dismissal was in 2013);
  • Jetstar failed initially to give the worker a copy of the medical report upon which it relied as the basis for its decision to dismiss and, at one point, asserted that it had no obligation to provide a copy. The Commission pointed out that such an approach was inimical to providing and ensuring a transparent and fair process.

Fortunately for Jetstar, none of the deficiencies in its process had, in fact, caused the worker's dismissal to be unfair. However, the Commission pointed out that they might have done, for example, if Jetstar's medical adviser, upon becoming aware of information with which he was not previously briefed, changed the opinion upon which Jetstar had relied as the basis for its decision to dismiss.

"Temporary" absences from work on account of illness or injury

McGarva v Enghouse Australia Pty Ltd [2014] FCCA 1522 (15 July 2014)

Section 352 of the Fair Work Act prohibits an employer from dismissing an employee because the employee is temporarily absent from work because of illness or injury. The regulations to the Act describe a "temporary" absence as an absence which (among other formal requirements) does not exceed three consecutive months or a total of three months within a 12 month period.

In this case, however, the Federal Circuit Court of Australia ruled that a sick worker who was dismissed after being absent for more than ten months was still able to bring a claim alleging that, in all of the circumstances, his dismissal constituted unlawful "adverse action" in breach of section 351 of the Act, which prohibits unlawful discrimination against workers on various grounds, including on the ground of "physical or mental disability". The Court ruled that a dismissal, after expiry of the three month "temporary absence" period, might still be unlawful as amounting to unlawful discrimination on the ground of disability.

Between August 2012 and July 2013 the worker was absent from work suffering from stomach and liver cancer. The worker had kept his employer informed about the progress of his absence and indicated in June 2013 that he was considering returning to work.

The employer subsequently dismissed the worker on the basis that he had been absent for medical reasons for longer than three months. The worker commenced proceedings alleging that the dismissal was unlawful, as "adverse action" in breach of section 351 of the Act.

The employer argued in response that the termination was not adverse action because the worker had been absent for ten months and was therefore not, at the time of his dismissal, temporarily absent for the purposes of section 352, so that the employer was not prohibited from dismissing the worker.

Judge Driver asked the worker and the former employer to make submissions on the construction of section 342(3) of the Act which states that adverse action does not include action authorised under legislation.

He found that that the reference to action authorised by or under section 342(3), "should be read in a cumulative fashion" so that the mere fact that action – in this case a dismissal – might be authorised under section 352 and the related regulation, did not carry an implication for any claim under section 351.

Judge Driver:

  • said, "A dismissal may be authorised due to the period of absence but it may still constitute an unlawful dismissal under Commonwealth or State anti-discrimination legislation";
  • found that given the worker, "was absent for almost a year before his employment was terminated, his illness was not prescribed [under the regulations] and falls outside the purview of s.352 of the Fair Work Act. But that does not abrogate his rights under s.351 of the Fair Work Act or" the Commonwealth disability discrimination legislation.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Andrew Tobin
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