A recent decision of the Full Bench of the Federal Circuit Court of Australia has highlighted that an employee’s medical condition will not necessarily excuse their misconduct or poor performance.  It also serves as a reminder that the decision-maker’s reasons for dismissing an employee are paramount.

What happened?

An investigation found that a solicitor was guilty of misconduct on four occasions which warranted disciplinary action.  After considering the investigator’s report, the employer terminated the solicitor’s employment.  The solicitor then commenced proceedings alleging, amongst other things, that the employer had taken adverse action against him because of his mental disability. 

At first instance, the judge ruled that the employer had taken adverse action against the solicitor by dismissing him for misconduct that arose wholly from his anxiety and depression.  The judge ordered that the solicitor be reinstated and paid $93,750 in compensation for lost wages.  The judge also imposed a $10,000 penalty on the employer.

The employer successfully appealed the matter.  The orders for reinstatement, compensation and penalty were set aside and the application was ultimately dismissed.

Reasons for decision

The Full Bench held that there was no evidence to support the trial judge’s unqualified finding that the employee’s conduct arose ‘wholly’ out of his medical condition.  The Full Bench did not accept the trial judge’s conclusion that the employee’s misconduct was ‘completely interwoven with his medical condition’ or the related finding that the employee’s misconduct and his ill health could not be ‘disaggregated’.  On the contrary, nothing in the investigator’s report attributed the solicitor’s four acts of misconduct (which led to his dismissal) to his mental illness.

Further, the Full Bench held that a decision-maker’s knowledge of a protected characteristic is a necessary but not of itself sufficient condition for a finding that the action was taken for a prohibited reason.

Lesson for employers

Before initiating disciplinary or management action against an employee for conduct or performance reasons, employers should first carefully examine any relevant medical reports to see if there is a connection between the employee’s medical condition and their misconduct or poor performance.