Managing unfit employees: legal issues

9 October 2012
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Managing employees who are unfit can be a very tricky process — because legal issues relating to unfair dismissal, discrimination, workers compensation, occupational health and safety, and adverse action can all potentially arise.

A summary of the legal issues and recommended procedures to follow was provided at the 2012 Workplace Law Fundamentals conference, conducted by Akolade in Sydney on 18 September 2012.

Kathryn Dent, partner at legal advisors People + Culture Strategies, said that the employee’s rights, as provided by the types of legislation mentioned above, must be balanced against the employers’ rights and obligations, which include the duty to provide a safe and healthy workplace and the need to have a productive, fit and engaged workforce.

Employers should be aware of legislative provisions (relating to unfit employees) that offer protection against dismissal — see the previous WorkplaceOHS article: Unlawful dismissal and temporary absence due to illness/injury 

‘Inherent requirements of job’ a fundamental issue
Dent said that the most important issue is to define and review the inherent requirements of the employee’s job, to determine whether the employee is fit enough to perform them and whether it would be possible for the employee to perform them if ‘reasonable adjustments’ to the job could be made.

The inherent requirements of a job are the parts of it that are essential to perform. This requires careful examination because those requirements will not always be obvious. The job description should clearly state the inherent requirements — so the employer can then approach the medical practitioner(s) involved in a case with the direct questions relating to:
  • whether the employee can perform them at present; and
  • if not, when if ever it is likely that the employee would be able to perform them.
However, merely obtaining a medical certificate of unfitness to perform the work will usually be insufficient to defend a claim of discrimination by relying on the ‘inherent requirements’ exemption in the legislation. The employer needs to have investigated the individual circumstances of the case, including conducting an analysis of the feasibility (eg in terms of cost, safety, productivity or the imposition of ‘unjustifiable hardship’ to the business) of making ‘reasonable adjustments’ to the job to assist an injured or unfit employee to perform it.

It is generally a lawful and reasonable direction for an employee to require an employee to undertake a medical assessment of fitness for work. An exception could be where an employer imposed the requirement on some injured employees and not others, and a reason for doing so was one of the grounds of unlawful discrimination covered by anti-discrimination legislation (eg disability, age, gender).

Dent said that courts and tribunals generally prefer to deal with medical reports obtained from the employee’s own doctor, instead of one specified by the employer. This can sometimes cause problems because, in some cases, vested interests may come into play.

Trends in choice of legislation
Dent made the following comments about use of the various types of legislation covering unfit employees:
  • Adverse action claims are increasing and are often preferred to claims of unfair dismissal. This may be because there are fewer restrictions on who can make an adverse action claim and the onus of proof is on the employer to prove that it did not take action because of a reason connected to a workplace right held by the employee. Note: the ability to make a workers compensation claim is within the scope of a workplace right. The scope of adverse action also includes altering an employee’s position in a detrimental way.
  • New South Wales workers compensation legislation has a provision (previously in the Industrial Relations Act) that an ‘unfit’ employee cannot be dismissed within 6 months of sustaining an injury or illness. However, claims under this provision are rare because employees appear to prefer ‘unfair dismissal’ claims. Note: the time limit, however, for lodging claims is much longer in New South Wales (2 years versus 14 days for dismissal claims).
  • EEO tribunals and courts have generally been reluctant to rule that an employer had to discriminate against an employee in order to comply with the provisions of occupational health and safety legislation. It is necessary to consider the individual circumstances of each case, and employers should not rely on ‘blanket’ OHS policies and rulings.
  • An employer must be able to prove that it made serious attempts to contact employees who are absent from work due to injury or illness for lengthy periods. This includes attempting to inform employees that if they do not restore contact with the employer within a specified period, termination of employment is the likely outcome. A claim that an employee abandoned his/her employment is unlikely to succeed unless this procedure is followed.
Guidelines for assessing fitness for work
Dent recommended taking the following steps:
  1. Conduct a pre-medical assessment interview with the employee.
  2. Request a medical practitioner’s report on fitness for work.
  3. Arrange for the employee to attend an assessment.
  4. Conduct a post-medical assessment interview.
  5. Depending on the report and what is discussed at this meeting, make a decision (eg rehabilitation or proceeding towards termination of employment).
  6. If work duties are modified to accommodate an injury, ensure the modifications are only temporary ones.
  7. Avoid creating other reasons for termination, such as job performance issues or contrived redundancy.
The employer should seek legal advice if the following situations arise:
  • The employee refuses to cooperate in the process.
  • The medical practitioner is unresponsive to requests for a report.
  • The report does not contain adequate information to make a decision.
Further information
More information about this conference is available from Akolade.

Source: Mike Toten, HR writer, prepared this summary.
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