Employers are not expected to keep a sick or incapacitated employee's job open for an indefinite period. The tests of fairness and reasonableness apply.
An employer can sometimes end employment where illness or injury means an employee cannot perform the role, but there is no automatic dismissal point. Medical information, prognosis, reasonable time, alternatives and a fair process all matter.
Long-term illness or injury can eventually make continued employment impracticable, but there is no automatic number of sick days after which an employer can simply dismiss. The employer needs to assess the real circumstances, obtain and consider relevant information, and follow a fair process before deciding that employment should end for medical incapacity.
An employer may need reliable medical information to make an incapacity decision, but that does not necessarily justify unrestricted access to an employee's entire medical history. The information sought should relate to the employment question being decided, such as current functional capacity, prognosis, expected duration and realistic return-to-work options.
If the medical evidence is incomplete or conflicting, the employee should know what concern remains and have a fair opportunity to provide further information before a final decision is reached.
A certificate can establish current incapacity without necessarily answering the longer-term questions an employer may eventually need to decide. Conversely, an employer should not treat short-term unfitness as proof that the employee will never return. The correct inquiry depends on the stage of the absence and the decision actually under consideration.
Medical incapacity processes often involve several exchanges of information rather than one meeting. The employee should understand the possibility of dismissal, the information the employer is relying on, the employer's concerns about continued employment, and any alternatives under consideration. The employee should then have a genuine opportunity to respond before a preliminary or final decision is made.
Being on ACC does not create an absolute bar to dismissal, but it can add rehabilitation and return-to-work considerations, particularly for work-related injuries. An employer considering incapacity dismissal while an employee is on ACC should not ignore current rehabilitation information or realistic return-to-work options.
Employers are not expected to keep a sick or incapacitated employee's job open for an indefinite period. The tests of fairness and reasonableness apply.
![Jonathan Rhodes v Barfoot & Thompson Limited [2026] NZERA 543 - medical incapacity dismissal before a genuine opportunity to recover](/Images/site/EmploymentAdvocatesAucklandCard.jpg)
Barfoot & Thompson Limited dismissed Senior Property Manager Jonathan Rhodes for medical incapacity while he was recovering from concussion and further head injuries. The ERA found he had not received a genuine opportunity to recover, the inquiry into his prognosis was incomplete, an imminent neurological assessment was not awaited, and the proposed alternative role did not reflect the clinical advice for a graduated return on reduced hours. The dismissal was unjustified and Barfoot & Thompson was ordered to pay $30,000 compensation.
The Employment Court overturned an ERA finding that Pact Group had justifiably dismissed Roseanne Sheridan for medical incapacity. The Court held the employer moved too quickly after a workplace-related PTSD injury, failed to wait for specialist information and did not properly engage with rehabilitation and return-to-work options.
Friendly Loans Limited dismissed Filisi Beswick for medical incapacity less than four weeks after she had been admitted to hospital with blurred vision and migraines. On the day of dismissal, she had told the company that her medical position had improved, that she had a negative Covid test, a valid driver licence and an updated medical certificate. She asked for a face-to-face meeting and to discuss work from home. The ERA held the company could not reasonably conclude she was incapable of her ongoing duties, had not sought her input, had not allowed sufficient recovery time, and had not considered alternatives. It also held a $2,439.09 loan deduction from final pay unlawful. The Authority ordered $24,436.09 in total...
ZZP was dismissed by the Commissioner of Inland Revenue on medical grounds after a lengthy absence and a failed return-to-work attempt. The ERA accepted that IRD had given ZZP a reasonable opportunity to recover and had been entitled to treat the medical evidence cautiously. However, the dismissal was unjustified because the decision maker relied on several concerns in the final decision letter that had not been put to ZZP for comment. Reinstatement and lost wages were declined, but compensation was assessed at $25,000 and reduced by 25 percent for contribution, resulting in $18,750 payable.
A Port of Tauranga stevedore was dismissed for medical incapacity after an asthma flare during palm kernel bulk work. The ERA held there was a serious question to be tried about whether the employer overstated the dust risk and failed to consider modified duties, and it ordered interim...
The Authority made monetary and/or other orders. Shubanghi Kaushal was employed by Ambridge Rose Manor Limited (ARML) as a Healthcare Assistant from 12 December 2022 until her dismissal on 12 September 2025. Key amounts include costs of $6,000.