The Full Bench of the Fair Work Commission has recently handed down two significant rulings in CSL Ltd t/as CSL Behring v Chris Papaioannou [2018] FWCFB 1005 and Hyde v Serco Australia Pty Ltd [2018] FWCFB 3989 which confirm the approach to be taken by employers when faced with conflicting medical evidence regarding an employee’s work capacity. The decisions move away from the Commission’s previous position that it should not interfere with an employer’s reasonable preference for one medical opinion over another.

Medical evidence required for capacity-related dismissals

Employers managing ill and injured employees face a number of difficult decisions. Increasingly, there is recognition that returning an ill or injured employee to pre-injury or meaningful alternative duties may have significant benefits to the workplace, both financially and emotionally. Retaining staff may maintain productivity, minimise retraining expenses, and improve morale and workplace relations. That said, if a worker is no longer able to perform the inherent requirements of their duties as a result of a medical condition, an employer may be required to consider the possibility of ending the employment.

To minimise the risk of an employee challenging the validity of any capacity-related dismissal under the unfair dismissal provisions of the Fair Work Act 2009 (Cth) (FW Act) or anti-discrimination legislation, an employer should obtain appropriate information regarding the employee’s health and medical history to assess their capacity to do the job, and the reasonableness of any adjustments to the position. In such circumstances, it is not unusual for employers to receive medical information from treating doctors and independent examiners that contains differing opinions regarding an employee’s capacity to work.

Employers may be required to make decisions regarding the management or dismissal of an employee where there is conflicting medical evidence. Before deciding to end the employment, employers must form a reasonable view about which expert opinion should be preferred, and whether there is sufficient evidence to find a ‘valid reason’ for dismissal as required by s387(a) of the FW Act.

Troubling trends

Until recently, the Fair Work Commission (the Commission) has been reluctant to interfere in an employer’s decision to rely on their preferred medical expert in cases where conflicting opinions exist. However, recent cases have raised the troubling possibility that an employer’s decision to terminate an employee on capacity grounds could be overturned, if the Commission later forms a different view of the conflicting medical opinions before it.

In February 2018, the Full Bench handed down the decision of CSL Ltd t/as CSL Behring v Chris Papaioannou [2018] FWCFB 1005 in Melbourne. The issue was whether the employer had a valid basis to dismiss a ‘plasma receipt operator’ on capacity grounds. It was not disputed that, at the time of the dismissal, evidence from the employee’s general practitioner and an independent examiner confirmed the employee had no capacity to perform pre-illness duties. However, the employee argued that there was a conflict in the medical evidence with respect to the prognosis provided in the various reports, namely whether the condition was temporary or indefinite. The Full Bench held that, in circumstances where medical evidence was ambiguous, ‘there is no basis to leave the resolution of any conflict in medical opinion to the employer’ and ‘such findings are to be based on the relevant medical and other evidence before the [Fair Work] Commission’ hearing the dispute.

The decision in Papaioannou rejected the approach previously taken by the Commission. In particular, the Full Bench stated that the approach taken in the case of Lion Dairy and Drinks Milk Ltd v Norman [2016] FWCFB 4218 was ‘plainly wrong’. The decision in Lion Dairy had found the Commission was ‘not in a position to make an expert medical assessment. An employer is entitled, and expected, to rely on expert assessments.’ As such, Lion Dairy had provided support to employers who wished to rely on their preferred medical evidence or medical expert when making decisions on capacity.

A course correction

In August 2018, the Full Bench handed down a decision in Hyde v Serco Australia Pty Ltd [2018] FWCFB 3989, which limits the impact of CSL Ltd, and (partially) reinstates the approach in Lion Dairy. This case involved a decision by an employer to dismiss a prison officer on the basis that an ankle fusion operation restricted his ability to safely perform the inherent requirements of his duties. Prior to the dismissal, a treating doctor had provided a certificate stating the employee was fit for duties, but later provided a detailed report that identified a number of ongoing work restrictions. After the dismissal, the employee’s representatives served a medico-legal opinion which disagreed with the treating doctor’s assessment of work capacity, and argued that it should be preferred by the Commission on the basis of CSL Ltd.

The decision in Hyde endorses the approach in CSL Ltd, namely that the Commission must consider and make findings as to whether, at the time of the dismissal, an employee suffered from the incapacity alleged by the employer. However, the Full Bench made the sensible decision that the reference in CSL Ltd to ‘relevant medical and other evidence before the Commission’ is not authority for the proposition that the Commission must have regard to new, conflicting medical opinion obtained after the dismissal. The key evidence to be considered is the medical opinions available to the employer at the time of the decision to dismiss an employee.

Defensible decision-making where there is conflicting medial evidence

The cases of CSL Ltd and Hyde indicate that, in the event of a conflict in the medical opinions, it will be insufficient for an employer to rely upon its preferred medical evidence without a sound and defensible basis to do so. An employer should analyse the weight to be given to each conflicting opinion, including:

• whether the medical evidence is provided by a properly qualified medical practitioner
• has the medical practitioner been properly briefed and informed with respect to the pre-injury job requirements
• does it address the employee’s current capacity and capacity into the foreseeable future, and
• does it identify any reasonable adjustments that could be made to the position.

A conflict of medical opinions in itself will not be sufficient to result in a dismissal being overturned by the Commission and does not require an employer to stand in the place of a doctor or expert. However, in some cases, further medical or other evidence regarding the employment may be required before an employer makes a decision to dismiss an employee. That said, employers are not required to consider evidence which does not exist at the time of the dismissal, and evidence of medical capacity served after dismissal as part of litigation will be of limited relevance in any dispute.