Jacquie Seemann and Bridget Nunn

Incapacity to work: an important update on the employer’s right to dismiss

Jacquie Seemann and Bridget Nunn

3 December 2019

Employment Disputes

The Full Federal Court has provided employers with much-needed guidance on when they can lawfully dismiss employees suffering from a disability.  The decision in Western Union Business Solutions (Australia) Pty Ltd v Robinson [2019] FCAFC 181 shows that a dismissal due to an employee’s incapacity to return to work will not necessarily lead to a finding that the employee has been unfairly dismissed or suffered unlawful adverse action.

Facts

Robinson, an executive of Western Union, went on sick leave for seven months. During his period of absence, Western Union made several inquiries about his capacity to return to work. On each occasion he provided Western Union with medical certificates variously stating that he had ‘a medical condition’, ‘significant work related stress and depression’, and ‘a major depressive disorder associated with significant anxiety’; while his WorkCover certificates stated that he had ‘no current capacity for any employment’. None of the certificates indicated when he might be expected to return to work.

Ultimately, Western Union terminated Robinson’s employment, giving as its reasons his failure to cooperate with the company’s attempts to obtain up-to-date medical advice, and concerns about his capacity to return to work. However, the evidence later showed that Western Union’s HR Manager was not convinced that Robinson was genuinely unwell; instead, she believed he was likely working elsewhere – but if he was genuinely unwell, then she believed it was unlikely that he would be able to return in any case.

Robinson brought a general protections claim against Western Union claiming it had taken unlawful adverse action against him due to his disability.

Original decision

At first instance, the Federal Court found that Western Union’s decision to terminate the employment partially due to Robinson’s incapacity to return to work meant that the disability was an operative reason for the termination.  In reaching this finding, Flick J noted that there was no distinction between his capacity to return to work and his mental disability.  He reasoned that ‘disability’ includes ‘manifestations’ of the disability and therefore ‘any “lack of ‘capacity”… to return to work was but a “manifestation” of his claimed mental disability… that could not be severed from that disability’.

Appeal decision

On appeal, this decision was reversed, with the Full Court finding that a distinction can be drawn between capacity to return to work and an underlying disability.  In the present case, the Court considered that – since Flick J had accepted the HR manager’s evidence that she did not dismiss Robinson because of his disability, but rather for the reasons stated above – it was not open to find that the disability had been an operative reason for the decision.

Importantly, a distinction could (and in this case should) be drawn between Robinson’s incapacity to return to work, and his disability.  As the Court put it: ‘not every consequence of a disability … is to be regarded as a “manifestation” of the disability such that the consequence is to be regarded as comprising a part of the disability’.  That is, what the disability IS does not necessarily equate to what the disability CAUSES.

Employers take note

In the specific factual circumstances, the appeal decision was not surprising. However, employers can take some comfort in the broader finding that the Court is prepared to distinguish between disability and its consequences (eg incapacity for work) rather than assuming both are linked when considering the reasons behind a termination.  This means that employers dealing with employees who are absent from work for extended periods due to illness or injury can terminate the employment on the basis that the employee does not have capacity to return to work long term, without there being a presumption that the employment has been terminated unlawfully.

Employers must still exercise caution when considering whether to terminate the employment of a long term injured or ill employee.  As this case also demonstrates, whether or not such action will breach general protections provisions will depend very much on the facts of each case.

If you would like to discuss any aspect of this article and/or would like us to provide advice in relation to managing employees suffering from long term illness or injury, please contact a member of Thomson Geer’s Employment, Workplace Relations and Safety team.

Jacquie Seemann | Partner | NSW | +61 2 9020 5757 | jseemann@tglaw.com.au

Bridget Nunn | Special Counsel | SA | +61 8 8236 1129 | bnunn@tglaw.com.au

Adeline Tran | Lawyer | SA | +61 8 8236 1184 | atran@tglaw.com.au