Monday, 18 November 2019

Full Court of the Federal Court provides guidance on termination of employees with a disability

Employers are often reluctant to terminate the employment of an employee, where the termination may be inadvertently linked to the employee’s disability, giving rise to a general protections or other discrimination claim.

While navigating these risks can be a challenge for employers,  the Full Court of the Federal Court has recently provided clarity to employers seeking to terminate employees with a disability, by distinguishing between an employee’s disability on the one hand, and the consequences of their disability on the other, when determining whether the basis for dismissal was unlawful.

The Relevant Facts

The Employee of the Respondent took leave due to “very significant” work-related stress and depression.  The Employee was absent for seven months and refused multiple requests by the Company for an independent medical examination. Subsequently, in early 2017, the Company informed the Employee that his continued refusal to attend an independent assessment would be treated as a breach of contract for which he could be dismissed.

While the Employee responded by asking a series of questions about an independent medical examination, he did not agree to attend. Despite further attempts by the Company to arrange an independent assessment, the employee did not respond.

By letter dated 8 May 2017, the HR Manager of the Company terminated the Employee’s employment. The HR Manager’s reasons in the Employee’s termination letter included “serious concerns about [his] capacity to return to work” and his “unreasonable failure to co-operate” with requests for an independent medical examination.

The Employee made an adverse action claim against the Company, stating that the reason for his dismissal included his disability.

The Federal Court Decision

In late 2018, Justice Geoffrey Flick in the Federal Court ordered the Company pay the Employee $160,000 ($140,000 compensation and $20,000 penalty) after finding the Company breached the Fair Work Act by discriminating against the Employee due to a mental illness.

Justice Flick reached this conclusion on the basis that there was no distinction between his capacity to return to work and his mental disability.  His Honour found that the Employee’s mental health condition formed part of the decision-making process of the HR Manager when the HR Manager expressed concerns as to the Employee’s capacity to return to work and that any questions of the Employee’s capacity could not be severed from the disability itself.  The Company’s failure to follow up on its email to obtain further specialist dates was considered “a serious shortcoming in the decision-making process”.

Justice Flick accepted the HR Manager’s protests regarding the discrimination were genuine and the HR Manager did not dismiss the Employee because of a mental disability.  However, the HR Manager still took adverse action motivated in part by a manifestation of the Employee’s disability, particularly a concern as to his capacity.

The Full Court Decision

The Employer appealed and the Full Court ultimately reversed Justice’s Flick’s decision.

In the leading judgment, Justice Kerr found that the HR Manager’s “serious concerns” were because the Employee had not attended work for a period of seven months, had refused multiple opportunities to submit himself to an independent medical assessment, and did not say when he would return to work.

Justice Kerr held, “those serious concerns had led [the HR Manager] to doubt that [the Employee] would in the future be capable of fulfilling the inherent requirements of his employment: that is, turning up for work”.  Justice Kerr also rejected any suggestion that the Employee’s incapacity to return to work was a “manifestation” of his mental disability.

In further consideration as to whether the consequences of a disability are “part of” or a “manifestation” of the disability,  the remaining Full Court judges, Justices O’Callaghan and Thawley held that it is not a disability’s consequence which is considered as a “manifestation” of the disability, such that the consequence is regarded as constituting part of the disability.  They also confirmed the disability was “not an operative reason” for her decision to terminate the Employee.

Lessons for employers

While employers now have more clarity as to whether a decision to dismiss an employee with a disability will be considered to be unlawful, employers must still tread carefully when dismissing an employee with a protected attribute such as a disability.

Where an employee:

  • is unable to fulfil the inherent requirements of their position due to their disability; and/or
  • fails to cooperate with a lawful and reasonable direction (such as attendance at an independent assessment),

and the employer adopts a procedurally fair process, it is more likely that the employer will be able to minimise the risks of a successful post-termination claim.

This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.

Case reference: Western Union Business Solutions (Australia) Pty Ltd v Robinson [2019] FCAFC 181.

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This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.

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