Medical incapacity – a last resort

This case demonstrates the need for a fair process and reasonableness when it comes to terminating employment on the grounds of medical incapacity. David Burton from Cullen Law talks us through the details.

Employers have a duty to protect the wellness of their employees at work. However, there may come a time when it is reasonable for an employer to terminate employment because of health issues. The recent Employment Relations Authority decision in Zammit-Ross v Chief Executive of Oranga Tamariki is a good example of an employer getting the process and justification for dismissing an unwell employee right.

Ms Zammit-Ross was a long-serving employee of Oranga Tamariki (OT). She was employed as a social worker in a youth justice facility that accommodates youth offenders who have been remanded or sentenced into custody.

In May 2017, Ms Zammit-Ross intervened between two youths who were fighting in the courtyard. Her hand became twisted in one of the

From October, Ms Zammit-Ross was unable to continue working due to worsening pain in her wrist. A rehabilitation plan was developed in November for the wrist injury to help Ms Zammit-Ross return to normal activities at work and home. However, in December, a further medical certificate was provided to OT advising that, in addition to the sprain, Ms Zammit-Ross was also suffering from post traumatic stress disorder (PTSD), which had been reactivated from the assault.

Ms Zammit-Ross had not disclosed a pre-existing disposition to PTSD. There was no evidence that OT had any knowledge that an incident such as breaking up a fight would have had the consequences that it did. Ms Zammit-Ross then developed increasing mental health symptoms.

The first medical report prepared in January 2018 was not provided to OT due to the deeply personal information it contained. As a result, the meeting proposed to discuss Ms Zammit-Ross’s situation was delayed to enable Ms Zammit-Ross to see her doctor again. The doctor’s second report confirmed Ms Zammit- Ross was receiving treatment for PTSD and stated that she remained “highly symptomatic and significantly functionally impaired”. The prognosis for a full recovery was probably one to two years, with a very low likelihood of recovery to full fitness to work in her role within 12 months. The report also advised that, if Ms Zammit-Ross were able to return to work within the next 12 months, further traumatic exposure would exacerbate her symptoms and prolong recovery.

The parties had discussions and attended mediation in July. In August, OT began the formal process set out in its collective employment agreement (CEA) for medical incapacity. Ms Zammit-Ross’ doctor’s opinion was that she “is medically unfit from today and will remain unfit for the foreseeable future”. OT’s doctor confirmed his earlier opinion and prognosis.

Following a meeting with Ms Zammit- Ross, a decision was made to proceed to terminate her employment for medical incapacity at the end of October 2018. In November, notice of this was provided to Ms Zammit- Ross, and her employment ended on 8 February 2019.

The Authority concluded that a fair and reasonable employer could have commenced the medical retirement process in August 2018. By way of contrast, the Authority also referred to an Employment Court case where it was reasonable for a large employer to commence a medical incapacity process after seven months. The Authority concluded that OT had followed a fair process and was justified for terminating

Ms Zammit-Ross’ employment for medical incapacity.

In support of her personal grievance for unjustified dismissal, Ms Zammit- Ross raised several complaints. She said that she felt unsupported by OT. The Authority concluded that the amount of contact an employer has with an employee who is unwell is always a balancing act. Some may appreciate more frequent contact and others may not.

Ms Zammit-Ross also complained about staffing levels. The Authority concluded that the evidence did not support a conclusion that there was inadequate staffing at the time of the injury. Importantly, the Authority commented that, even if there was fault, it was not satisfied that there was an obligation to continue employment until Ms Zammit-Ross was well. It did state that where there is responsibility by the employer for an employee’s condition, more emphasis may fall on an obligation to promote rehabilitation and the reasonableness of any timeframes.

Whether an employer is justified in terminating an employee’s employment for medical capacity will depend on the circumstances, but it should be supported by the medical evidence and by allowing a reasonable period for the employee to recover.

David Burton is the Director of Cullen – The Employment Law Firm. David has over 30 years of employment law experience in New Zealand and overseas. His expertise is recognised by his peers. For six years, he was appointed to the Employment Law Committee of the New Zealand Law Society. Before that, he served on the Workplace Relations and Employment Law Sub-committee of the Law Institute of Victoria, Australia.