Employer fined $44,000 after failing to make ‘reasonable adjustments’ for injured employee

A mechanic who suffered an out-of-work injury has been granted damages after his employer’s “clumsy” handling of his return to work. Here are HR’s key takeaways from this case.

A recent case heard by the Federal Circuit and Family Court of Australia (FCFCOA) has underscored the critical importance of having the right frameworks in place to manage injured and disabled workers. 

The FCFCOA found that an employer, a mechanical and diesel services provider in South Australia, failed to accommodate an employee’s return to work after he sustained an injury and had thus neglected its obligations under disability discrimination legislation.

The employee, a 58-year-old diesel mechanic, had injured his wrist outside of work after an unprovoked assault while walking his dog. After following the recommendation of his surgeon to take three months off work, he  attempted to return to his role with a medical clearance stating he was unfit to engage in heavy lifting for three months, but could resume light duties.

However, rather than accommodating this, the employer insisted on receiving a full clearance from a medical professional stating he was fit for ‘all duties’ before they’d allow him to return.

After finding that their actions were in contravention of the Commonwealth Disability Discrimination Act of 1992, which states that employers are obliged to make ‘reasonable adjustments’ to prevent discrimination, the FCFCOA ordered the employer to compensate the worker with $44,000 in damages. 

In its ruling, the court dubbed the employer’s behaviour “clumsy”, noting that they were likely unaware of their obligations to respond to injuries that occur outside of work hours. 

“Employers are not liable for out-of-work injuries,” says Fay Calderone, Partner at Hall and Wilcox. “However, despite an injury occurring out of work, employers still have a positive obligation to assist an employee’s return to work.”

Calderone spoke with HRM to unpack what went wrong in the employer’s response to the injury, and how HR can mitigate the risk of non-compliance with disability discrimination laws.

Court finds that ‘reasonable adjustments’ could have been made

The principal failing of the employer in this case was its failure to provide ‘reasonable adjustments’ to accommodate the employee’s injury. 

The court concluded that a staged return to the workplace was possible in this case, and that a functional capacity assessment of the employee’s ability to perform his duties in the workplace should have been undertaken.

As per the Disability Discrimination Act 1992, adjustments must be considered ‘reasonable’, and Calderone says there must also be ‘breadth’ and ‘flexibility’ in the extent of these adjustments, meaning they could include technological solutions or human support.

“However, some level of hardship may be considered reasonable,” she says.

“It is up to the employer in making the assertion that the adjustments would pose an unjustifiable hardship to demonstrate how and why this is the case.”

“While the court empathised with the difficulties of a lay person understanding the complexities of disability discrimination laws, it did not prevent the employer from being liable.” – Fay Calderone, Partner at Hall and Wilcox

When determining the viability of these adjustments, a comprehensive medical assessment is essential to establish the employee’s capacity to work and demonstrate a thorough investigation.

Employers can lawfully direct an employee to undergo an independent medical assessment to assess the extent, duration and impact of the injury, whether reasonable adjustments can be made and, if so, what adjustments are necessary, says Calderone.

“The independent medical examiner should be provided with the employee’s position description and specifics of the inherent requirements of the employee’s position when assessing the employee’s ability to return to work.”

The FCFCOA case highlights the importance of carefully considering the recommendations from medical professionals and how they can be woven into the employee’s return-to-work plan.

In this case, the employer was not satisfied with the employee’s medical clearance to work from his orthopaedic surgeon, and directed him to see a physiotherapist. The physiotherapist put forth a similar recommendation that the employee was “suitable to return to the role, in a restricted manner”. However, the employer disregarded this and took the report to mean that he was unfit to work.

The court highlighted that the employer failed to grasp the implications of the physiotherapist’s report, which suggested “fairly modest” modifications for the employee’s return to work, including a staged return, mechanical aids, the ability to seek assistance and physiotherapy. 

Ensuring compliance with disability discrimination laws

In its ruling, FCFCOA criticised the employer’s handling of the situation as “ill-informed.” A key takeaway from the court’s decision and the damages paid is that ignorance of the law does not constitute a viable legal defence.

“[In this case], while the court empathised with the difficulties of a lay person understanding the complexities of disability discrimination laws, it did not prevent the employer from being liable,” says Calderone.

It’s therefore crucial that employers and HR are across their legal obligations to accommodate disabled employees and demonstrate the feasibility of potential ‘reasonable adjustments’.

“Careful consideration is required based on the specific requirements of the position and the circumstances of the employer before it is determined that making adjustments would pose an unjustifiable hardship,” says Calderone. “This must be considered based on what is fair and reasonable in all the circumstances.

“An employer establishing these defences under the disability discrimination laws will go some way to mitigate against a general protections claim under the Fair Work Act. However, even once these defences are established, employers should follow a show-cause process with employees and provide them with procedural fairness.”

A show-cause process provides a formal opportunity for employees to respond to their employer’s concerns around their ability to safely perform the inherent requirements of their position, necessary adjustments and any medical evidence, she says. 

The process should include formal documentation in the form of a show-cause notice and, ideally, a meeting with the employee to discuss their specific circumstances.

“In their response, employees should be advised their employment is at risk and asked to show cause why the employer should not proceed with the termination of the employment at the follow-up meeting, at which they should not be denied the opportunity to have a support person present,” she says.

“This part of the process is to mitigate [the risk of] an unfair dismissal claim (assuming the employee is able to bring one).”

By understanding the positive obligation for reasonable adjustments, recognising the differences in legal obligations for on-the-job and out-of-work injuries and adhering to proper procedures and evidence requirements, HR can protect both employees and employers from costly legal consequences. 

A commitment to fairness and transparency throughout the process is essential, not only to comply with legislation, but also to maintain a workplace culture that values inclusivity and the wellbeing of all employees.

AHRI members can access guidelines about preparing a return-to-work plan via AHRI:Assist. Not a member? Learn more about member benefits here.

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