There is an important development in employment law occurred on 13 June 2023. It extends the time frame to allow a claim of sexual harassment in the workplace from the standard 90 days to 12 months.
In the middle of a disciplinary process the employee calls in sick (generally the reason given is stress) and says they can’t attend any further meetings. This prolongs the disciplinary process, often to the point where the employer is left wondering if taking disciplinary action is worth it. This is a frequent occurrence and one that leaves employers frustrated. A recent Employment Relations Authority decision addressed just this issue when the employer then dismissed the employee for medical incapacity.
In VXO v Northland District Health Board the employee, a Senior Medical Officer in pediatrics, was the respondent to a complaint of sexual harassment from a colleague Registrar (a junior pediatric trainee). An independent investigation was initiated which upheld the complaint. VXO admitted most of the behaviour alleged, (there were inappropriate text messages sent) and claimed to have since recognised how the texts were inappropriate, that he hadn’t previously considered the imbalance of power his position created but had since understood this and was very sorry for the distress caused.
The NDHB initiated its own disciplinary investigation at the completion of the independent investigation. In this process VXO reneged on his previous admissions and acknowledgements, claiming he was advised by his union representative to make those statements and he had done so under duress because he was concerned about losing his job. Ultimately, after a thorough investigation, the employer put to VXO that they were proposing to dismiss him. It is important to stress at this point that although the employer NDHB had reached the conclusion that VXO’s behavour had amounted to serious misconduct, NDHB properly put the proposed outcome (ie dismissal) to VXO for his feedback before reaching the final conclusion to dismiss.
At this point VXO went on sick leave, stating he was admitted to hospital with chest pain “caused by stress induced cardiomyopathy” and was unable to attend any further disciplinary meetings or respond to the proposed dismissal. This stance continued for several weeks despite the NDHB agreeing a number of times to postpone the meeting to allow him time to recover.
The employee was a party to the NDHB Collective Agreement (the MECA) which specified that when an employee had been absent on sick leave for greater than three months, the employer may consider termination on the grounds of medical incapacity.
The NDHB, through VXO’s lawyer, advised him they were considering medical incapacity and sought additional medical information from a cardio specialist and a psychiatrist. The medical reports concluded that without full exoneration of the allegations VXO would be unlikely to make a full recovery and would remain on sick leave.
The employer considered this information and put their mind to whether they could exonerate VXO. They concluded they could not, and on that basis concluded that meant VXO couldn’t return to work in the foreseeable future because of his medical conditions. After 10 months on sick leave the NDBH dismissed VXO for medical incapacity.
VXO raised a personal grievance claiming for, amongst other things, unjustified dismissal.
The Authority concluded that the NDHB acted correctly. The grounds for medical incapacity are well founded in previous Employment Court cases.
The Chief Judge in Lal v The Warehouse Group Ltd, helpfully set out the following framework to be adopted when approaching this type of dismissal:
 The employer must give the employee a reasonable opportunity to recover. The terms of the employment agreement, any relevant policy, the nature of the position held by the employee and the length of time they have been employed with the employer are factors which are likely to inform an assessment of what is reasonable in the particular circumstances.
 The employer must undertake a fair and reasonable inquiry into the prognosis for a return to work, engaging appropriately with the employee. This will likely involve seeking and considering relevant medical information. It will also involve explaining the reasons for the inquiry, the possible outcome of it, and providing the employee with an opportunity for input and comment.
 The employer must fairly consider what the employee has to say before terminating their employment. An employer is entitled to have regard to its business needs in deciding an appropriate response to the situation and any applicable timeframes. An employer is not obliged to keep a job open indefinitely, no matter how long an employee has been employed or how large the organisation is. For their part, an employee is obliged to be responsive and communicative.
 In cases of medical incapacity, and a reduced ability to undertake certain tasks, a level of engagement with attempts to facilitate a return to work may reasonably be expected. Fairness cuts both ways, consistently with the mutual obligations which exist in employment relationships.[i]
Medical incapacity dismissals do require patience, fairness to the employee and an understanding of what is required to reach a justified decision to dismiss. If you think this may be an issue impacting your organisation, please call one of our Consultants.
[i] Lal v The Warehouse Group Ltd  NZEmpC 66