The legal and practical steps before dismissing for medical incapacity, including reliable medical information, consultation, prognosis, reasonable time to recover and consideration of alternatives or rehabilitation.
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.
The legal and practical steps before dismissing for medical incapacity, including reliable medical information, consultation, prognosis, reasonable time to recover and consideration of alternatives or rehabilitation.
![Jonathan Rhodes v Barfoot & Thompson Limited [2026] NZERA 543 - medical incapacity dismissal before a genuine opportunity to recover](/Images/site/EmploymentAdvocatesAucklandCard.jpg)
Barfoot & Thompson dismissed senior property manager Jonathan Rhodes for medical incapacity while he was recovering from concussion and further head injuries. An imminent neurological assessment had not been obtained and the proposed alternative role did not fit clinical advice for a graduated return on reduced hours.
Roseanne Sheridan developed PTSD after a serious threat from a resident at work and was dismissed for medical incapacity about six months later. Specialist ACC information and rehabilitation planning were still developing, and a return-to-work process had not been completed.
Friendly Loans dismissed Filisi Beswick for medical incapacity less than four weeks after hospitalisation, despite updated information that her condition had improved and requests to discuss returning or working from home. The employer also deducted $2,439.09 from her final pay for a loan.
IRD dismissed ZZP for medical incapacity after a lengthy absence and failed return-to-work attempt. The ERA accepted the employer had allowed a reasonable recovery period and could treat later medical evidence cautiously, but the final decision introduced concerns ZZP had never been asked to address.
A Port of Tauranga stevedore was dismissed for medical incapacity after an asthma flare during dusty palm-kernel work. He sought interim reinstatement, arguing there was a serious dispute about the actual exposure risk, his capacity for modified duties and the employer's consideration of alternatives.
Healthcare assistant Shubanghi Kaushal was suspended and then summarily dismissed after an incident the employer characterised as serious misconduct. The ERA examined the incident in context, an existing final warning and whether dismissal was within the range open to a fair and reasonable employer.