CAN an employee be dismissed for prolonged absence from work due to medical incapacity?

The Employment Court has long held that an employer is not required to hold open an employee's position indefinitely.

In the words of former Chief Judge Horne: "There can come a point at which an employer can fairly cry halt."

There is no fixed period of absence laid down. Instead, each case will depend on its particular circumstances and an evaluation of things such as the terms of the employee's employment including the sick leave provisions, how long the employment is expected to be for if the employee was not sick or injured (is it expected to be short or long term), the nature and importance of the employee's position, the nature of the illness or injury, its duration and the prognosis for recovery, the employee's period of past employment, and whether the injury occurred at work.


In addition, the Employment Court and Authority will look to see that the employer's process leading up to dismissal was fair and reasonable, and that the employer has complied with the terms of the employee's employment agreement.

It is not uncommon for an employer to fall down in the process and/or contract compliance area as a recent Employment Relations Authority case involving poultry farmers Inghams demonstrates.

Inghams employed Amarjit Singh as a full-time egg collector at one of its poultry farms. In October 2011, Mr Singh suffered a back injury at work. He provided medical certificates for his injury and was off work on ACC for four months.

During that time, he had several meetings with Inghams about his injury, his fitness for work, and whether he could return on "light duties". However, Inghams made it clear that it was not possible to provide him with any "light duties" because of the physical work requirements and the medical restrictions placed upon him, including "no bending" and that he needed to be "sitting or able to sit often".

On or about February 22, 2012, Inghams farm manager Muhannad Juma asked Mr Singh to meet him to discuss his employment situation and "where we were going to from here".

The two, together with other Ingham managers, met on February 28, 2012. At the meeting, Mr Singh again requested that he be placed on "light duties" as suggested in his current medical certificate. However, Inghams considered it was inappropriate to have him back at work until he was fully fit to be there.

The meeting adjourned for a short period and, upon reconvening, Mr Singh was instantly dismissed. The next day, Inghams provided him with a letter confirming his dismissal for incapacity.

Mr Singh brought a personal grievance claim against Inghams for unjustified dismissal. He claimed that in dismissing him, the company had failed to comply with the terms of the "incapacity" clause in his employment agreement. The clause provided that, before deciding to dismiss, the company was to consult with him, request him at its expense to be medically examined by a nominated medical practitioner, and to take account of any resulting report. None of this was done.

Mr Singh also complained that the meeting on February 28, 2012, was unfair in that he was not warned beforehand that his employment was in jeopardy, nor was he given any opportunity to respond to the issues regarding his future employment.

Lastly, he complained that his employment agreement provided that if he was dismissed for incapacity, Inghams was required to give him one week's notice of termination. It had given him no notice whatsoever and had instead instantly dismissed him. Accordingly, his dismissal was in breach of contract and unjustified.

The Employment Relations Authority upheld Mr Singh's claims and found that he was unjustifiably dismissed.

"Clearly none of the steps were observed by Inghams and I find that the dismissal of Mr Singh fundamentally breached the incapacity provisions of his employment agreement ... the Employment Court has highlighted in a number of decisions an employer's obligation to seek appropriate medical information and to properly communicate to the employee the fact that their ongoing employment is in jeopardy before making a decision to end employment. This did not happen in this case," the authority said.

The authority declined to award Mr Singh any lost wages because he had not actually "lost" any wages due to him being unfit for work and on ACC. It did, however, award him $4000 compensation for humiliation and distress.

This case demonstrates that dismissals for incapacity can be quite complex and not straightforward. Not only are employers required to weigh up circumstantial factors before they can "fairly cry halt" but they also must ensure the process used is fair and that terms of the employee's employment agreement are complied with.

Seeking professional advice may well prove cheaper in the long run.

Alan Cressey is a Napier barrister and solicitor