Terminating an employee based on their inability to perform the inherent requirements of a job

Dismissing an employee due to illness or injury is one of the most challenging decisions a business owner can face. It's a process fraught with legal complexity, and getting it wrong can easily lead to a costly unfair dismissal claim before the Fair Work Commission (FWC).

For Greater Western Sydney businesses, handling these matters demands a clear, fair, and evidence-based process.

If an employee is unable to perform the inherent requirements of the job, any action you take must be legally defensible. This guide breaks down the essential principles to help you make sound decisions...

What Are the 'Inherent Requirements' of a Role?

The entire process hinges on this one concept: the inherent requirements of the role the Fair Work legislation refer to. These are the fundamental, essential duties of the position.

Think of them as the pillars of the job. For example:

• A truck driver's ability to hold a valid driver's licence.
• A labourer's physical capacity to work on a construction site.
• A manager's availability during core hours to lead their team.

In practice, this means asking: is this task absolutely essential to the job's purpose? Proving that a duty is one of the core inherent requirements of the job (and not something that could be reassigned or modified) is the employer's responsibility from the outset.

Medical Evidence and the Fair Work Commission

What happens when your company doctor says an employee is unfit for their duties, but their own GP provides a certificate clearing them to return?

This is a common scenario, and your next step is critical. You cannot simply favour the evidence that supports your desired outcome. The Fair Work Commission will not ask whether you believed the employee was unfit; it will ask whether you can prove it based on the available evidence.

Drawing from key cases like Lion Dairy & Drinks Milk Ltd and Jetstar Airways, the FWC has established that it will conduct its own independent assessment. This means it will:

• Weigh the qualifications and expertise of each medical practitioner.
• Examine how recently each assessment was performed.
• Analyse how well each doctor understood the specific demands of the role.

Ultimately, a decision to terminate must be based on a solid factual foundation, not just an honestly held opinion – whether true or not.

The Leading Case: CSL Limited v Papaioannou (2018)

For years, legal uncertainty clouded how employers should handle conflicting medical reports. The CSL case in 2018 was a landmark decision that provided lasting clarity.

A Full Bench of the Fair Work Commission confirmed that it is the Commission's role, not the employer's, to weigh conflicting medical evidence and make a final determination. The ruling essentially stated that an employer cannot simply "prefer" one doctor's opinion over another to justify a dismissal.

This case is still the standard today. It reinforces that any decision you make must be robust enough to withstand independent scrutiny.

Legal Checklist Before Terminating an Employee

Before proceeding with termination, you must make sure your process is procedurally fair and thoroughly documented. A rushed decision is a vulnerable one:

• Confirm the Employee Cannot Meet an Essential Requirement
  Identify the specific, core duties the employee cannot perform and be ready to prove they are essential to the role.
• Make Sure Your Medical Evidence is Robust
  Is your assessment recent, specific to the role's demands, and from a qualified expert? Have you given genuine consideration to any conflicting reports?
• Provide Procedural Fairness
  This means meeting with the employee, clearly explaining the issue (backed by your evidence), and giving them a genuine opportunity to respond their behaviour before you make a final decision.
• Explore Reasonable Adjustments
  Have you genuinely considered if modifications to the role or workplace are possible? Could the employee be redeployed to another position? Document these considerations.
• Document Everything
  Keep clear, contemporaneous notes of all meetings, medical reports received, alternatives considered, and the reasons for your final decision. This record is vital if your actions are later challenged.

Can Absenteeism Alone Justify Termination?

Many employers ask about the consequences of not showing up for work in Australia. While persistent absenteeism is a serious issue indeed, it is rarely a valid reason for termination on its own.

Instead, an employee's pattern of absence can serve as evidence that they are unable to meet an inherent requirement of their role; namely, attending work reliably enough to perform their duties. For this to be a valid reason, you would need to show how the employee's unpredictability directly undermines their ability to fulfil their core function (e.g., by disrupting team rosters or critical project deadlines).

Final Thoughts: A Process Demanding Care and Precision

These are difficult decisions, both legally and personally. While the law gives employers the right to dismiss an employee who cannot fulfil the essential duties of their role, it demands that the process be handled with the utmost care.

An unfair dismissal claim can be costly, time-consuming, and damaging to your business. The best way to protect your position is with proactive, clear-headed advice.

For businesses here in Greater Western Sydney, having a local Employment Law partner who understands these challenges is a valuable asset.

Speak with an Employment Lawyer Before Taking Action

Handling an employee's long-term absence or incapacity requires careful legal guidance. Our legal team provides clear, practical advice grounded in years of experience supporting businesses across Greater Western Sydney.

Before you make a final decision, contact us. A confidential conversation today can help you avoid a costly legal dispute tomorrow.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.