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Employee dismissed based on conflicting medical evidence: Commission required to make findings on employee's capacity to work

In a recent case, CSL Limited T/A CSL Behring v Chris Papaioannou, the Fair Work Commission Full Bench found that giving the final say to employers about an employee’s capacity to work when there was conflicting medical evidence was “plainly wrong”.

The decision by the Full Bench came out of an appeal by an employer who challenged the findings of Commissioner Ryan. Commissioner Ryan found the dismissal of an employee was harsh and the employee should be reinstated. The employee was dismissed for allegedly being unable to perform the inherent requirements of his position.

The employer’s decision to dismiss the employee was based on conflicting medical evidence. The employee’s psychiatrist reported the employee’s condition was temporary and estimated a “6 month period of recovery”. An independent medical examination requested by the employer was conducted by an occupational physician. The occupational physician said it was “not possible to predict with any degree of confidence just when [the employee] will have the capacity to sustain a return to work”. Optimistically, he estimated a 12 to 24 month period of recovery. The employer favoured the opinion of the occupational physician and used this assessment as a valid reason for dismissing the employee.

The employee argued the dismissal was harsh, unjust or unreasonable because his condition was temporary, and he had good prospects of recovery. He argued his employer failed to consider the medical evidence reflecting this assertion.

The personal and economic effects of the dismissal were also argued to be severe according to the employee, as “returning to work was an important goal in the [employee’s] rehabilitation”. Further, the dismissal did not take into account the employee’s “long and positive work record.”

Decision at first instance

Commissioner Ryan at first instance found there was a valid reason for dismissal as it was reasonable for the employer to rely on the report of the occupational physician. The Commissioner considered the differing opinions of the occupational physician and psychiatrist, believing the opinion of the psychiatrist should “trump” the occupational physician’s report as the assessment was of a psychiatric nature. However, the Commissioner said, “I am not, as a Commissioner, going to decide who is right or who is wrong. I don’t need to”

It was found by Commissioner Ryan that the dismissal was harsh. The dismissal “denied the [employee] the benefit of the terms of an enterprise agreement which were intentionally designed to be generous and intentionally designed to specifically cover long periods of absence by the employee”.

Consequently, the Commissioner ordered the employee be reinstated.

Decision on appeal

On appeal, the Full Bench considered the conflicting decisions in Jetstar Airways Ltd v Neeteson-Lemkes (Jetstar) and Lion Dairy & Drinks Milk Ltd v Norman (Lion Dairy).

In Jetstar it was held that the Commission is required to make findings as to the employee’s capacity to work based on medical assessments and other evidence. Conversely, it was held in Lion Dairy that the Commission was “not in a position to make an expert medical assessment. An employer is entitled, and expected, to rely on expert assessments”.

The Full Bench favoured the decision in Jetstar, going so far to say the approach in Lion Dairy was “inconsistent with the weight of authority and the proper construction of s.387(a). It is, with respect, plainly wrong”.

The Full Bench further provided that “[c]ontrary to the proposition in Lion Dairy, there is no basis to leave the resolution of any conflict in medical opinion to the employer. The Commission is frequently called upon to resolve evidentiary conflict, including the assessment of expert evidence.”

The appeal was upheld on the basis that the Commissioner at first instance erred by applying the approach from Lion Dairy.

Key issues for employers

This case highlights that when considering dismissing someone due to incapacity the onus is on the employer to carefully consider any medical evidence.

The Commission has made clear that it will consider all medical evidence and any other available evidence to make an assessment on whether the employee suffered from the alleged incapacity. The evidence given in proceedings will ultimately be the basis for determining whether the employee is fit for work or not, and not what the employer’s assessment of the evidence was at the time of the dismissal.

As such, employers cannot simply rely upon one medical opinion in isolation if a competing opinion with a different prognosis exists. Further enquiries may be necessary to resolve the conflict including seeking clarification from the medical advisers, the relevant specialisation of the medical adviser and/or seeking a further independent opinion.

Read the full decision here

* PCC Employment Lawyers are a team of employment practitioners based in Sydney, with many years of combined knowledge and experience in workplace law, industrial relations, workplace investigations and training. They provide a high standard of excellence and an exceptional level of personal service to a variety of clients in the Sydney metropolitan area, Central Coast, regional NSW and interstate.

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