Upset female employee packing box getting fired from job

Terminating an employee based on their inability to perform the inherent requirements of a job

To successfully defend an unfair dismissal claim, an employer must be able to satisfy the Fair Work Commission (FWC) that the dismissal was not harsh, unjust or unreasonable.  This is done by establishing that the employer had a valid reason to terminate the employee, and that the process followed in the lead-up to the decision was procedurally fair.

Section 387 of the Fair Work Act sets out the criteria for determining whether a dismissal is harsh, unjust or unreasonable.

Specifically, section 387(a) requires the FWC to take into account:
“Whether there was a valid reason for the dismissal related to the person’s capacity or conduct…”

Until recently, there was a notable discrepancy regarding how to determine whether there had been a valid reason for termination based on an employee’s capacity.  These cases looked specifically at whether or not the mere existence of medical evidence/a medical report that had been reasonably relied on by an employer would be sufficient in itself to determine the issue.

The approach adopted in Lion Dairy & Drinks Milk Ltd v Norman [2016] FWCFB 4218 (‘Lion Diary case’) brought about the following decisions:

  • The FWC is not in a position to make an expert medical assessment.
  • It is considered the end of the matter if the employer has reasonably relied on medical evidence – even if the employee presents conflicting evidence.
  • It will generally be the employer’s responsibility to resolve the conflict if there is a dispute relating to the relevant medical opinions presented as evidence.

However, the approach adopted in Jetstar Airways Ltd v Neeteson-Lemkes [2013] FWCFB 9075 (‘Jetstar case’) put forward the following conflicting points:

  • In a dismissal matter related to an employee’s capacity, the FWC is required to consider all medical evidence presented by both parties and make a finding as to whether the employee suffered the alleged incapacity at the time of the dismissal.
  • There is no basis to leave the resolution of any conflict in medical opinion up to the discretion of the employer.

Fortunately, this aforementioned discrepancy has now been resolved thanks to CSL Limited T/A CSL Behring v Chris Papaioannou [2018] FWCFB 1005 – which is now referred to as the leading authority on the matter.  In this particular case, the Full Bench of the FWC held that:

  • The approach taken in the Jetstar case is the correct one.
  • The FWC is required to make a finding as to whether the applicant suffered from the alleged incapacity at the time of the dismissal.  As such, a finding is to be based on the relevant evidence before the FWC.
  • The FWC is frequently called upon to resolve evidentiary conflict, including the assessment of expert evidence – and thus there is no basis to leave the resolution of any such conflict between competing medical reports up to the employer.

What does this mean for you?

  • In circumstances where there are competing reports, regardless of whether an employer’s decision to terminate an employee has been supported by a view expressed by a suitably qualified medical practitioner – it is not guaranteed that the FWC will automatically endorse this particular medical practitioner’s view.
  • To maximise the chances of the medical opinion/report that you are relying on being accepted by the FWC – you must make sure that the medical practitioner:
    • is suitably qualified;
    • has been made aware of the inherent requirements of the job;
    • bases their assessment on the inherent requirements of the job; and
    • has actually had the opportunity to properly assess the employee’s condition and potential restrictions.

If you are grappling with a decision over whether or not to terminate an employee due to the fact that they may not be able to perform the inherent requirements of the job for which they were employed – please get in contact with Anna Ford, or anyone else in Coleman Greig’s Employment Law team before taking any action.  

We are able to make sure that you proceed both appropriately and effectively in order to limit your exposure to a Fair Work Commission claim.


Send an enquiry

Any personal information you provide is collected pursuant to our Privacy Policy.


More posts

Understanding roles in the strata scheme

A strata scheme is a building or group of buildings that have been divided into lots which can be apartments, villas, offices, units or townhouses. This will be articulated in the strata plan.

Can i put my home on Airbnb?

Airbnb is a form of short-term rental accommodation. To add your property to Airbnb in NSW, you are required to meet several laws and regulations governing short-term rentals.

When are liquidators required to seek approval to retain legal counsel?

When does a liquidator (or the company he or she is appointed to) need court, creditor, or committee approval to validly retain a solicitor to act in a liquidation matter which is likely to extend for longer than three months?  The answer to this question has only recently been settled.

Proposed changes to building and construction law in NSW

The Building Bill 2022 (the Bill) is the key avenue through which the NSW Government has proposed to reshape the culture of the building and construction industry by eliminating poor performance and improving the quality of building statewide.

Can you dismiss an employee who fails to return to the office?

Slowly but surely, most employers are requiring employees to return to the office for at least a portion of their working week. Some employers continue to struggle with employees resistant to returning to the office or those who have an expectation that they can continue to work from home whenever it suits them.

New powers to combat phoenixing in construction

The rise of phoenixing in the building and construction industry in Australia in recent years has proved a significant challenge to regulators. Mismanagement of time or cashflow can quickly propel businesses into insolvency.

The NSW Building Commission’s extraordinary powers

In late 2023, the NSW Government passed the Building Legislation Amendment Bill 2023 (Amendment Bill). The Amendment Bill established the NSW Building Commission and granted it extraordinary powers to enter construction sites, inspect work and take away information and materials.

© 2024 Coleman Greig Lawyers   |  Liability limited by a scheme approved under Professional Standards Legislation. ABN 73 125 176 230