Critical developments in managing ill and injured employees

The management of ill and injured employees can be a complex and difficult task and providing an employer with a quick and simple resolution is not always possible. Regard must be had to the overlay of restrictions in respect of ill and injured workers, which are imposed by the provisions of the Fair Work Act 2009 (Cth) (FW Act), the Disability Discrimination Act 1992 (Cth) (DDA) and state anti-discrimination and workers compensation legislation.

This article will discuss recent case law in relation to the key legal risks that employers will face in their management of ill and injured employees and provide an overview of critical developments in the area. The types of claims that employers may face in the management of an ill and injured employee include (but are not limited to):

• discrimination claims based on disability under the DDA, or relevant state based legislation ^[1]
• applications for unfair dismissal remedy under section 394 of the FW Act;
• general protections claims under Pt 3–1 of the FW Act;
• applications for stop bullying orders under the FW Act; ^[2] and
• workers compensation claims. ^[3]

Disability discrimination claims

Section 15(2) of the DDA provides that it is unlawful for an employer to discriminate (directly or indirectly) against an employee on the ground of the employee’s disability:

a)     in the terms or conditions of employment that the employer affords the employee; or

b)    by denying the employee access, or limiting the employee’s access, to opportunities for promotion, transfer or training, or to any other benefits associated with employment; or

c)     by dismissing the employee; or

d)    by subjecting the employee to any other detriment.

Therefore, in the context of an ill or injured employee, it will be unlawful to treat them less favourably or dismiss them on the basis of their illness or injury provided that illness or injury falls within the definition of “disability” for the purposes of the DDA (which is highly likely given the broad definition).

However, the exception contained in section 21A of the DDA provides that it will not be unlawful to discriminate against the employee on the ground of disability, if the employee would be unable to perform the inherent requirements of their position, even if the employer made reasonable adjustments.

What is a reasonable adjustment?

Section 4 of the DDA defines “reasonable adjustment” as “an adjustment to be made by a person is a reasonable adjustment unless making the adjustment would impose an unjustifiable hardship on the person”.

Unless a modification involves unjustifiable hardship, it will by operation of section 4 of the DDA be a reasonable adjustment. This principle is demonstrated in the decision of Watts v Australian Postal Corp (Watts). ^[4] 

In this decision, Mortimer J of the Federal Court found that, by not making reasonable adjustments for Ms Watts to perform her work as a bid manager, the employer had contravened section 15(2)(b) of the DDA.

Ms Watts sustained a psychological injury as a result of her non-selection for a leadership position and made a workers’ compensation claim. After resolution of that claim, the employer commenced managing Ms Watts’s return to work which involved requests for medical reports and advice about whether she could return to work and perform her pre-injury duties. When Ms Watts took objection to the provision of those reports, the employer directed her to take leave on the basis that she was unfit to perform her role and there were no reasonable modifications or restrictions which would allow her to do so. While Ms Watts eventually returned to work after the second period of leave, she made a claim of disability discrimination relating to the employer’s failure to make reasonable adjustments to allow her to return to work during her second period of absence.

In considering the concept of “reasonable adjustments”, Mortimer J stated. ^[5]

"There is, in my opinion, no reason in the text, context or purpose of section 5(2), read with section 4 and within the DDA as a whole, to construe the word “adjustment” in a way which might arbitrarily limit the kinds of modifications or alterations required to enable a disabled worker to perform his or her work. Technology changes and advances at an increasing pace and disabled people can be the beneficiaries of such changes and advances."

The decision in Watts also made clear that:

• it is not for an alleged discriminator or for a court to determine whether an adjustment is “reasonable” — an adjustment will be considered reasonable unless it causes unjustifiable hardship; ^[6] and
• the only limitation to adjustments which may be required is that they must be sufficiently identifiable to enable the alleged discriminator or the court to determine whether the proposed adjustment occasions unjustifiable hardship. ^[7]

What is an unjustifiable hardship?

In assessing what will constitute an “unjustifiable hardship”, regard will be had to the definition in section 11 of the DDA, including all relevant circumstances. The approach was confirmed by the Full Court of the Federal Court in King v Jetstar Airways Pty Ltd ^[8] (Jetstar), where the court held that an unjustifiable hardship would be imposed on Jetstar if it were required to accept more than two wheelchair passengers per flight. The Full Court affirmed the primary judge’s finding that. ^[9]

"… the defence of unjustifiable hardship is made out with the result that section 24 of the Act did not render it unlawful for Jetstar to discriminate against Mrs King on the ground of her disability. This is because under the Act as in force at the time the provision of the assistance to wheelchair passengers to board and disembark from an A320 flight without a limit on the number of passengers requiring that assistance would impose unjustifiable hardship on Jetstar taking into account all relevant circumstances, including the matters in section 11 of the Act."

While the concepts discussed above arise in relation to claims of discrimination under the DDA, they will, in certain circumstances, also be relevant to unfair dismissal claims made by an ill or injured employee.

Unfair dismissal claims

In an unfair dismissal context, the employer must have a valid reason to terminate the employment based on the capacity of the employee to perform the inherent requirements of their position now and in the foreseeable future. A decision to terminate in breach of the DDA would not constitute a valid reason for dismissal and therefore the employer should consider whether any reasonable modifications can be made and whether there are any redeployment options available.

Additionally of course, procedural fairness is required and in the context of an ill or injured employee, there will likely be a focus on the veracity of the medical evidence.

What are the inherent requirements of the position?

Inherent requirements

The decision of Commissioner Wilson in Alcock v TNT Australia Pty Ltd ^[10] (Alcock), contains clear guidance on how the inherent requirements principle is applied in unfair dismissal cases.

In Alcock, the duties for pickup and delivery drivers were set out in the employer’s driver handbook and included an ability to lift packages weighing up to 40 kg. The employer had formed a view that Mr Alcock was unable to lift the required weights and Mr Alcock had subsequently undertaken a functional assessment which confirmed the employer’s view. As a result of the assessment, the employer terminated Mr Alcock’s employment on the basis that he could no longer perform the inherent requirements of the position.

Commissioner Wilson found that the termination was not harsh, unjust or unreasonable, given the nature of the role, and stated that: ^[11]

"Determination of the inherent requirements of a position requires analysis not only of the terms on which a person has been employed, but the job they do and the organisation within which the job is performed."

The commissioner considered the terms of the driver handbook and found that while Mr Alcock would not be required to lift items at the specified maximum weights all of the time in his role, he would need to do so on a reasonably regular basis and therefore he could not safely perform the inherent requirements of the role. The position relevant to the inherent requirements test The Full Bench of the then Fair Work Australia also considered what position is relevant to the inherent requirements test in J Boag & Son Brewing v Button ^[12] (Boag).

Mr Button was a brewery technician and had been advised to avoid heavy lifting due to his medical condition. After a workplace assessment, Mr Button was given modified duties and continued to perform those modified duties for quite some time. After a second assessment, the employer considered that it was no longer viable for Mr Button to carry on performing his modified duties due to the extent and indefinite nature of the restrictions, and his employment was terminated on the basis that he could not perform the inherent requirements of his original position.

While the employee was successful at first instance, on appeal the Full Bench held that the dismissal was not unfair, stating that ^[13]

"When an employer relies upon an employee’s incapacity to perform the inherent requirements of his position or role, it is the substantive position or role of the employee that must be considered and not some modified, restricted duties or temporary alternative position that must be considered."

Obtaining medical evidence: employer requests or direction to provide medical evidence

In Boag, the medical evidence collected by the employer was crucial in defending the unfair dismissal claim brought by Mr Button. However, employers should be aware of their rights and obligations when obtaining such information. Two recent cases have very significantly clarified when a request for, or direction to provide, medical evidence is lawful and reasonable.

Australian and International Pilots Association v Qantas Airways Ltd: Federal Court

In Australian and International Pilots Association v Qantas Airways Ltd ^[14] (AIPA), the employer directed a pilot who had been absent due to illness for 149 days to provide it with additional medical information. The original medical certificate had provided that the pilot was suffering from clinical depression and was unfit for normal work for the following four months.

When the pilot, acting on the advice of his union, refused the request for provision of additional detail about his diagnosis, prognosis and capacity to return to pre-injury duties, the employer threatened disciplinary action. Consequently, the AIPA filed a general protections claim, alleging that the threat of disciplinary action was adverse action taken for a prohibited reason: the pilot was exercising a workplace right to obtain personal leave upon provision of a medical certificate.

The claim by the AIPA that the employer had no right to require more detailed medical information than had been provided by the doctor was rejected. Significantly, Rares J in the Federal Court of Australia found that there was an implied contractual right for the employer to require the additional medical information and that a refusal to comply would permit disciplinary action, referring to the employer’s obligations under the relevant occupational health and safety legislation and stating ^[15]

"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."

This implied right to direct the pilot to provide further medical information also derived from the need for the employer to make business arrangements and rostering arrangements (which it made 10 weeks in advance). This is a significant decision which confirms an earlier decision of Goldberg J in Thompson v IGT (Aust) Pty Ltd ^[16] which had often been overlooked because it was an ex-tempore decision.

Grant v BHP Coal Pty Ltd: Fair Work Commission

The principles in AIPA were followed by the Full Bench of the Fair Work Commission in Grant v BHP Coal Pty Ltd  ^[17] (Grant), which was initially a decision of Commissioner Spencer that was confirmed on appeal. ^[18]

Mr Grant was a boilermaker, who made an unfair dismissal claim when his employment was terminated after he attempted to return to work following a period of extended sick leave due to a shoulder injury. Upon his attempted return to work, Mr Grant provided the employer with a medical certificate from his treating doctor, which provided no information other than certification that Mr Grant was fit to return to normal duties. The employer directed Mr Grant to attend an occupational physician to ascertain further information about his ability to return to work without risk of re-injury. Mr Grant refused to attend two appointments that were scheduled for him and the employer then dismissed him on the basis of serious misconduct for failing to comply with lawful and reasonable directions.

At first instance, Commissioner Spencer considered the employer’s particular health and safety obligations under the Coal Mining Safety and Health Act 1999 (Qld), and said. ^[19]

"In the circumstances, it is entirely reasonable that the Respondent would have at least sought further advice and information on the Applicant’s fitness to ensure that it was not exposing the Applicant, or others, to unacceptable risk from any limitation arising from the injury or by virtue of his lengthy absence."

Given the nature of the Applicant’s medical history and the fact that the Applicant had had surgery and rehabilitation, the Respondent had reasonable cause to satisfy itself that the Applicant could safely perform his duties and would not expose anyone to an unnecessary level of risk. The medical evidence which the Applicant provided was insufficient and did not particularly focus upon an occupational assessment.

The Full Bench also found that:

• the employer’s direction was lawful and reasonable;
• there had been a valid reason to dismiss Mr Grant;
• and
• the dismissal was not unfair.

Principles from the decisions in AIPA and Grant about employer’s directions about medical evidence

The decisions in AIPA and Grant make clear that:

• where an employer has reasonable grounds for requiring further medical evidence (particularly on safety grounds or after an extended absence), the employer can direct the employee to provide that information or attend for examination by a company nominated doctor; and
• if an employee refuses to provide details of their diagnosis and prognosis, then disciplinary action (including dismissal), can follow, provided that there is fair process and no ulterior motive of the employer that triggers exposure to a general protections claim.

General protections claims under the Fair Work Act

General protections claims under the FW Act in the context of ill and injured employees will generally be alleged on the basis that unlawful adverse action was taken:

(a) because the person had a workplace right (such as taking personal leave) under section 340 of the FW Act;

or

(b) because of the person’s physical or mental disability under section 351 of the FW Act.

The reverse onus of proof  ^[20] that operates in respect of general protections claims mean that an employer must be particularly sure to collect and maintain reliable medical evidence which supports any action that they take in respect of ill and injured employees. However, the inherent requirements defence (discussed above) will also apply in respect of adverse action claims under section 351 of the FW Act. ^[21]

Medical evidence and general protections claims

The decision in Marshall v Commonwealth ^[22] (Marshall) demonstrates the difficulties that employers may have in discharging the reverse onus and reliance (or refusal to rely) on medical evidence in general protections claims.

Mr Marshall was employed in Melbourne and had been absent from work on personal leave supported by certificates from his general practitioner, which also provided that he was not fit to transfer to some particular roles in the Brisbane office, but that he could work in or near Melbourne because he would then be close to his family who could give him support. While Mr Marshall was on personal leave, the employer discovered that Mr Marshall had applied to appear on the reality television show, “Beauty and the Geek”. Consequently the employer terminated Mr Marshall’s employment and defended his adverse action claim on the basis that the medical evidence and certificate provided by Mr Marshall’s treating doctor was unreliable.

Federal Magistrate Whelan however held that the employer had no proper basis to ignore the treating doctor’s medical assessment, noting that the medical certificates provided were detailed and stating that: ^[23]

"… Dr Thomson gave cogent explanations for the differing certificates he issued. The Applicant’s condition was, in his assessment, related to situational anxiety. The prospect of returning to work in a metropolitan office environment of the Respondent, in Dr Thomson’s view had a negative impact upon the recovery the Applicant had shown. Dr Thomson did not consider that working in an isolated field office would be likely to trigger such symptoms and that participation in the “Beauty and the Geek” program might assist the Applicant in a positive way."

The decision in Marshall clearly demonstrates that employers who act contrary to a medical certificate may be at significant risk of an adverse action claim, and should be very careful before rejecting an employee’s medical certificate as satisfactory medical evidence of an illness or injury.

Temporary absence and dismissal

It is also important to note that an employee cannot be dismissed for a temporary absence due to illness or injury unless their paid sick leave has been exhausted and they have had absences of 3 months, or periods equalling 3 months in a 12 month period. ^[24]

In McGarva v Enghouse Australia Pty Ltd, ^[25] Mr McGarva had been absent from work for 10 months due to stomach and liver cancer and had exhausted his sick leave when he notified the employer that he was intending to return to work. The employee then terminated Mr McGarva’s employment, and Mr McGarva made a general protections claim, on the basis that the employer had discriminated against him because of his physical disability.

The employer’s defence, that compliance with section 352 of the FW Act and the Fair Work Regulations 2009 (FW Regulations) was a complete defence to an adverse action claim, was rejected by the Federal Court. Judge Driver held that: ^[26]

"… the mere fact that action — in this case, relevantly, a dismissal — may be authorised under section 352 of the Fair Work Act and the Regulations does not carry an implication for any claim under section 351. 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."

This case demonstrates that, regardless of the fact that an employee’s absence may exceed the period of “temporary absence” defined in the FW Regulations, the employee may be eligible to bring a general protections claim and employers should still approach the dismissal of such employees with caution.

Conclusion

The overview of recent cases above highlights the need for employers to consider all legal risks arising from a range of legislative sources when managing or terminating the employment of ill or injured employees, a process which can often be complex, requiring caution and care on the part of the employer.

This article was first published in Employment Law Bulletin, Vol 21 No 8, October 2015