A recent decision by Fair Work Australia has found that the incapacity of a brewery technician to perform all of the inherent requirements of his job provided his employer with a valid reason for his dismissal ⁽¹⁾.  Fair Work Australia also found that the employer had a valid reason for dismissal based upon the technician’s breach of the employer’s alcohol policy.

What happened and why?

The brewery technician commenced work in June 2005. The technician had a congenital bladder defect and by October 2008 he was unable to perform all of the requirements of his position. He was then placed on restricted duties. A medical assessment in July 2009 disclosed that the technician’s restrictions were permanent and that he would be unable to safely perform the inherent physical requirements of his pre-injury duties. Re-deployment was unavailable as the technician’s transferable skills did not match the requirements of other roles. Consequently, the employer gave the technician notice of the termination of the employment. The notice allowed for the technician to serve out a short period of notice. During the notice period the technician was charged with a drink driving offence.  As the offence involved breach of the employer’s alcohol policy, the employer dismissed the technician from its employment before the end of the notice period.

The technician challenged the fairness of his dismissal. A Fair Work Australia arbitrator initially found in his favour ⁽²⁾.  The arbitrator found that there was no valid reason for the dismissal based upon his incapacity as he had been performing modified duties.  The arbitrator also found that there was no valid reason to terminate based upon the breach of the alcohol policy for reason that he had already been given notice of termination. These findings were overturned on appeal.

The appeal bench found that the arbitrator incorrectly proceeded on the basis that the technician was able to perform the inherent requirements of the modified duties in which he had been working since October 2008.  The proper test is whether the worker can perform the substantive position or role.  The appeal bench said: “When an employer relies upon an employee’s incapacity to perform the inherent requirements of his position or role, it is the substantive position or role of the employee that must be considered and not some modified, restricted duties or temporary alternative position that must be considered”.  This test is consistent with a long-standing High Court authority on the notion of ‘inherent requirements’.

Even if an employer has a valid reason to dismiss, this does not necessarily mean that a dismissal cannot be found to be unfair. Indeed there are several considerations relevant to an arbitrator's assessment of the fairness of a dismissal. The validity of the reason is one of these considerations, but it is not the only consideration. The appeal bench acknowledged the possibility that a dismissal could be unfair even if the employee cannot perform the inherent requirements. The appeal bench also said: “An inability to perform the inherent requirements of a position will generally provide a valid reason for dismissal.  But this will not invariably be so.  For example, the dismissal may be prohibited by state workers’ compensation legislation or otherwise unlawful.  It is highly likely, bordering on certain, that there could be no valid reason for the dismissal in that event.”

In relation to the drink driving offence, the appeal bench found that the employer’s policy was reasonable and known to the dismissed technician.  It held that the breach of the reasonable policy provided a valid reason upon which the employer was entitled to rely in supporting its decision to dismiss.  However, the bench noted that the case disclosed some evidence to suggest that the policy had been inconsistently applied and this might show unfairness. The matter has been allocated for further hearing on this isolated point.

Useful tips for your business

• If your business is faced with the possibility of dismissal, consider whether there is a valid reason based upon the employee’s capacity or the employee’s conduct.  The reason should be sound and defensible.
• If the proposed dismissal relates to the incapacity of an employee, consider whether the employee has been given an opportunity to demonstrate fitness for work.  Most importantly, consider whether the employee can perform the inherent (i.e. essential) requirements of the position.  Consider also whether the employee could perform the position with reasonable accommodations or adjustments.
• If the proposed dismissal concerns an employee with an injury or illness compensable under workers’ compensation law, consider whether any time based prohibitions on dismissal have passed.
• Ensure compliance with any relevant policies and procedures.  Relevant personnel should be trained in these policies and procedures and they should be applied consistently across the business.

(1)     J Boag and Son Brewing Pty Ltd v Allan John Button [2010] FWAB 4022
(2)     Allan John Button v  J Boag and Son Brewing Pty Ltd [2010] FWA 148

This article was written by Australian Business Lawyers.