Summary
The threat of dismissal for medical incapacity is always a worry after an injury. Make sure you understand your rights and responsibilities.
How can you be sure that your dismissal was fair after an injury and extended absence from work?

Every dismissal, including for medical ‘incapacity’, is judged by Section 103A of the Employment Relations Act 2000.

Section 103A considers the question of whether a dismissal is justifiable must be determined, on an objective basis, [by considering] whether the employer’s actions, and how the employer acted were what a fair and reasonable employer could have done in all the circumstances at the time the dismissal occurred.

In applying the test the Authority must consider whether, having regard to the resources available to the employer, it sufficiently investigated the allegations. A sufficient investigation requires, as a bare minimum, that the employer put the issues, allow an opportunity to respond and consider the response with an open mind.

If an employer wishes to dismiss a worker for 'medical incapacity' the same section of the Act applies. Motor Machinists Ltd v Craig is an example, with the Court observing:
 Frustration of contract can occur where illness prevents the performance of an employment contract. However, an employment contract is not frustrated simply because an employee is ill or has been in the past. The contract is not frustrated where there is no medical evidence that the employee is permanently incapacitated or it cannot be said that the incapacity has been such that it destroyed the root of the contract. Under the doctrine of frustration there is no requirement of fairness as the contract terminates by operation of law, rather than by the decision of one of the parties. (p 591, line 24; p 592, line 1) 
 Where illness or injury occurs which prevents an employee from returning to work the employer is not necessarily bound to hold that employee’s job open indefinitely. However, if the employer chooses to dismiss the employee, its action must be justified at the time in accordance with the established jurisprudence. The employer must have substantive reasons for the dismissal and must show that the procedure it followed in carrying out the dismissal was fair. This ensures that the employee is not dismissed without the opportunity to provide information, such as medical reports, to prevent the employer taking such action, while at the same time allowing the employer to end the contract without needing to establish that the contract was frustrated. 

In the case of Lee Brown, while medical incapacity was the "prime reason" his employment was terminated, the employer took other factors into account as well - but neglected to inform Mr Brown of them or give him the opportunity to respond to them. That simple mistake made the dismissal unjustified.

Medical incapacity is not a simple road for an employer to go down. It must be able to show that it relied solely upon the medical condition of the employee and any surrounding information gathered from the employee, and that the employee would not reasonably be able to return to work any time soon.

Just because an employment agreement has a timeframe (i.e. 12 weeks) to dismissal through incapacity, in reality it is not the wording of the agreement that will prevail, but the actual facts surrounding the employee and the environment to which they will want to return. Sacking an employee who has a specific timeframe to full recovery and return to work could leave an employer vulnerable to a claim that the employee was unjustifiably dismissed.

 It is important if you are the injured or unwell employee that you stay in close contact with your employer and keep them up to date with where you are at in terms of recovery. Don’t let your medical condition stray into the unknown – ask questions of your healthcare providers, and get answers. Then pass those answers on to your employer in a timely manner.

Above all, be realistic. If you can’t do the job, you can’t do the job. Don’t make your boss sack you in order to keep his business running smoothly. Be prepared to resign if it’s the fair way to deal with your boss, or talk about alternative roles that aren’t as critical to the running of the ship.

If you need help after an injury or you think you might be about to be dismissed for medical incapacity, give us a call or fill out our online form to have someone review the facts and see if we can assist further.


More information on this case can be found here.