Employers: Dealing with Medical Incapacity

There are a number of challenges for employers when dealing with employees and managing those who are medically unfit, and not attending work is one of those challenges. There comes a point where the employer will ask: “Do I need to keep this employee’s job open any longer?” Often other employees are covering for the sick or injured employee which can lead to stress and resentment. The business could be incurring extra costs in covering the position and clients could be impacted.

If the employer decides to bring the employment to an end, it will need to act in a procedurally fair way. This means the employer is under a duty to enter into an inquiry with an open mind and accept that expert advice needs to be gathered in order to make a fully informed decision.

Ensure support is available for the employee by offering assistance such as EAP, alternative work arrangements, and be sure to demonstrate sensitivity throughout.

Key to the process is for the employer to seek medical information. This means obtaining a medical report which provides the employer with information in regards to the condition, treatment and importantly, a timeframe for when the employee is likely to be fully fit for work. The employee can refuse an employer’s request for a medical report however the employer will have to make a decision based on all the information they have to hand.

Once the employer has all the information available to them they can meet with the employee to discuss possible termination of employment due to medical incapacity. The employer must explain why the time has come to “fairly cry halt” to the employment relationship; invite the employee’s feedback and consider any other information; and any alternatives including redeployment. The employer will then consider all the information and make the decision about terminating employment.

It is important to keep in mind that an inquiry into an employee’s medical prognosis is not a disciplinary investigation. There is a recognition of “no fault” in regards to the employee being unable to work, much the same as in cases of redundancy. The employee is not being ‘dismissed’. However, don’t wait too long to start investigating incapacity because if the employee has been absent for a significant period of time and the business has coped, the question could be asked as to why the investigation is being initiated now.

The Employment Court has noted a number of established factors that should be considered when deciding whether or not to terminate an employee’s employment on medical grounds.

• The terms of the employment agreement
• The length of the incapacity
• Probability of long-term employment but for the medical incapacity
• The nature of employment – what is the employee’s position?
• Nature of the incapacity and the prospects for recovery
• Length of employment to date
• Cause of the incapacity – if work related the employer may be expected to be more lenient.

In conclusion, it is important to have an employment agreement that includes a well drafted, comprehensive clause regarding medical incapacity. The agreement should include clauses dealing with:
• access to medical information;
• medical examination; and
• termination for long-term medical incapacity.

Chapman Employment Relations assists employers in drafting employment agreements and in providing advice on medical incapacity issues.

For more information contact

Kay Chapman
Consultant
phone 03 545 0877
email kay@chapmaner.co.nz
web www.chapmaner.co.nz