FWC decision highlights critical steps businesses should take before dismissing long-term injured workers

The Fair Work Commission (FWC) recently dealt with a case concerning an employee who was dismissed after an extended period of absence due to a workplace psychological injury.

Ms Yang was employed as a childcare worker by Nought to Five Early Childhood Centre Incorporated (the Centre).

After experiencing stress at work, Ms Yang commenced a period of leave and lodged a workers compensation claim. Her claim was accepted on the basis that Ms Yang was suffering from a psychological injury and had an incapacity for work.

Thereafter Ms Yang periodically submitted medical certificates to the Centre. Those certificates stated that she was not fit to return to work at the Centre, and her return-to-work program was directed towards securing new employment with a different employer.

After nearly 12 months of absence, the Centre wrote to Ms Yang asking her to show cause why her employment should not be terminated on the basis that she was unable to perform the inherent requirements of her position.

The Centre’s letter requested “some important information to help us assess the situation in relation to our operational needs” as it was “finding it increasingly difficult to maintain the operational requirements of our services” in compliance with the applicable regulatory regime.

Ms Yang’s reply to the show cause letter posited that termination of her employment would be premature and that, with proper accommodations, she could return to work (notwithstanding the observations noted in her medical certificates).

The Centre subsequently terminated Ms Yang’s employment on the basis of her inability to perform the inherent requirements of her position. She was paid four weeks’ wages in lieu of notice of termination.

Following her dismissal, Ms Yang lodged an unfair dismissal application with the FWC.

The FWC determined that she had not been unfairly dismissed.

Critical to the FWC’s decision was the fact that:

1. at the time of the dismissal, Ms Yang’s incapacity for work at the Centre had been ongoing for almost 12 months. This was not a situation where the employer sought to terminate an employee’s employment shortly after the employee sustained their injury or illness, commenced a period of leave, or lodged a workers compensation claim;
2. there was no medical evidence to indicate that Ms Yang was likely to return to work at the Centre, either in the reasonably foreseeable future or at all. To the contrary, all of the available medical evidence indicated that Ms Yang could not ever return to work at the Centre;
3. in making the decision to terminate her employment, the Centre relied upon the advice it had received from Ms Yang’s doctor and her rehabilitation provider that she was not fit to return to work at the Centre. The Centre took steps to understand the employee’s capacity to perform her duties and her fitness for work, including by consulting with the employee and gathering reliable medical evidence; and
4. the reason for dismissal was notified to Ms Yang in advance, and she was given a reasonable opportunity to respond to concerns about her capacity to work.

This article provides general commentary only. It is not legal advice. Before acting on the basis of any material contained in this article, seek professional advice.

Our workplace team advises and represents clients in all areas of employment and industrial law, from day-to-day advice to support on specific issues.

We’ve helped our clients achieve their goals by structuring commercially effective workforce arrangements which protect intellectual property, confidential information, business contacts and goodwill. We also advise on disciplinary issues including misconduct, performance management, workplace grievances, bullying and discrimination, and have assisted with confidential legal investigations.

Find out more about how our expert workplace team can assist your business.