Sheridan v Pact Group [2026] NZEmpC 51 - medical incapacity dismissal overturned

Roseanne Sheridan's medical-incapacity dismissal had been upheld by the Employment Relations Authority. On challenge, Chief Judge Christina Inglis reached the opposite conclusion: both the decision to dismiss and the process leading to it were unjustifiable.

How the incapacity arose

Ms Sheridan worked as a community support worker in a residential service. In January 2021 a resident threatened serious violence towards her. She subsequently developed post-traumatic stress disorder and went on sick leave.

The employer initially raised disciplinary concerns about her handling of the incident, but the employment process later shifted to possible termination for medical incapacity.

The Court's concern about timing

Pact Group dismissed Ms Sheridan after about six months. The Court considered that too soon in the particular circumstances, especially where the incapacity arose from a workplace incident and specialist ACC information and a return-to-work process were still developing.

The employer knew a specialist report was pending but pressed Ms Sheridan to provide medical information she did not possess. It also declined requests to wait for the rehabilitation information and did not meaningfully engage with proposals for a collaborative return-to-work process.

Workplace injury and rehabilitation

The Court emphasised that where incapacity arises from a workplace incident, an employer may generally be expected to take reasonable rehabilitation steps and consider alternatives capable of addressing operational concerns before resorting to dismissal.

Business needs remain relevant, and an employer is not required to hold a job open indefinitely, but those principles did not justify Pact Group's approach on these facts.

The result and remedies

The challenge succeeded. The Court held that Ms Sheridan was unjustifiably dismissed. Pact Group was ordered to pay $30,000 compensation and a sum equivalent to six months' lost wages, less amounts received from ACC during the relevant period. No reduction was made for contribution because the alleged blameworthy failure to provide medical information was not established.

Why this case matters

Medical-incapacity dismissal is not simply a question of how many months an employee has been absent. The employer must obtain and fairly assess the best available medical information, give reasonable time for recovery, consider rehabilitation and return-to-work options, and take particular care where the incapacity itself arose from the workplace.

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Source: Employment Court judgment and related public material.