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When sickness can lead to dismissal

17 August 2016


Where an employee has done wrong, and it is sufficiently serious, readers would probably likely agree that an employer should be able to dismiss.

However, it is hard not to sympathise with an employee when they have been dismissed for medical reasons.

No person ever intends to suffer from medical problems, yet despite this, a person's employment can be jeopardised by poor health. Losing a job when life is already tough can be devastating.

On the other hand, absent employees can create considerable strain on a business.

There is often confusion about what businesses can do in this situation, as well as the employee's rights.

Reports of Lee Brown's case has drawn the public's attention to these issues, following his success before the Employment Relations Authority.

Brown was employed by Advanced International Cleaning Systems (AICS) as an account manager selling cleaning products.

On 13 July 2015 Brown suffered a heart attack and had to undergo open heart surgery, requiring him to be absent from work for some time.

In early August, Brown had a phone conversation with AICS about his rehabilitation prognosis, where there was some fixation over whether there would be a six to 12 month rehabilitation period.

The conversation was cut short after the tone became terse. Both parties agreed it ended unpleasantly.

Six days later, AICS proposed in a letter to Brown that it was "best that [Brown] stand down from [his] role."

Several days later, AICS was contacted by a client who criticised them for their treatment of Brown. That same day, and without hearing anything from Brown on their proposal, they made a decision to dismiss him.

The authority found the decision to dismiss was unjustified.

AICS never completed the process it started. It did not receive medical information from Brown, nor did it hear his response to the proposal.

AICS also failed to put Brown on notice that failure to provide details of his medical condition could impact on his continued employment.

As it turned out, Brown would have been able to return to work, at least on a part-time basis, much sooner than six months down the track.

However, where a correct process is followed an employer can dismiss for medical incapacity.

The dismissal of a mental health nurse by a DHB in 2008 provides an example of an employer justifiably dismissing for medical incapacity.

The nurse had been suffering from depression for some time.

After two months of absence the DHB put the nurse on notice that his employment may need to be terminated if he could not return to work soon.

The DHB went on to refer him to their occupational health staff for assessment and a return to work programme.

The occupational physician provided a report to the DHB on his condition, outlining that return to full duties was unlikely to be possible.

When the nurse was eventually dismissed, he raised a personal grievance claiming that he was unjustifiably dismissed.

He claimed that the DHB was aware of the barriers to his return to work and had failed to remedy them, and that the DHB had failed to follow its staff rehabilitation policy.

The Employment Court held his dismissal was justified.

It stated that an employer is not required to keep a job open indefinitely where an employee is suffering from a prolonged illness.

The court considered the DHB acted fairly and reasonably. It made numerous attempts to engage with the nurse and seek information from him, but the information was never provided by the employee.

It had done all it reasonably could to help the nurse return to work and was not able to implement its rehabilitation policy due to his reluctance to engage.

The law recognises that businesses can struggle where an employee is away for a long time because they're unwell.

However, the law attempts to moderate the risk of harm to these employees.

Employers are required to take reasonable steps to understand the prognosis of suffering employees before they can dismiss.

A dismissal would be supported by a lack of certainty around the return date or the likelihood of it being a long time in the future. So too would the person being in a crucial position in a small organisation.

Large organisations such as the DHB in the case I have referred to would be better able to cope with a prolonged absence. Where the medical reports indicate the person is likely able to return to full duties reasonably soon then dismissal would of course be inappropriate.

A considerate and informed approach is expected by employers if workers suffer prolonged absence through sickness or injury. However, there will always come a time when the employer may fairly cry "halt".

Peter Cullen is a Partner at Cullen – the Employment Law Firm. He can be contacted at peter@cullenlaw.co.nz

Cullen - The Employment Law Firm is one of only eleven law firms in New Zealand approved to provide employment law services to Government and the public sector.

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