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Federal Court upholds implied contractual right to require medical evidence

Submitted By Firm: Corrs Chambers Westgarth

Contact(s): John Tuck

Author(s):

Janine Young, Partner

Date Published: 4/1/2014

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In Australian and International Pilots Association v Qantas Airways Ltd [2014] FCA 32 (6 February 2014), the Federal Court of Australia held that Qantas had an implied contractual right to seek detailed medical information from a pilot (Mr Kiernan) who had been on long-term personal/sick leave.

The Court also found that Qantas had not taken adverse action (in breach of Part 3-1 of the Fair Work Act 2009 (Cth) (FW Act)) when it threatened to discipline the pilot for failing to provide a report from his treating doctor on his prognosis and ability to return to full duties.

The decision provides useful guidance for employers in an area which is notoriously difficult to manage.

Facts

Mr Kiernan’s employment was governed by the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 (Agreement). The Agreement provided that, after an employee had taken a certain amount of sick leave, Qantas could require the employee to produce a medical certificate or other evidence of personal illness or injury.

Sick leave commences

In July 2012 Mr Kiernan commenced sick leave, having provided a medical certificate stating that he was suffering from clinical depression and would be unfit for work until 11 October 2012. Mr Kiernan’s treating doctor also stated that he had contacted the Civil Aviation Safety Authority and requested that Mr Kiernan’s pilot licence be suspended until his condition stabilised. Mr Kiernan had a substantial amount of accrued personal leave.

Further medical certificates, and Qantas requests further information

A further medical certificate was provided in October 2012, simply stating that Mr Kiernan was “suffering a medical condition and will be unfit for normal work” up to 10 January 2013. As it appeared that Mr Kiernan would remain unfit for work for a considerable period, Qantas requested that he provide a written report from his treating doctor, clearly indicating his:

  • ability to safely carry out the requirements of his role as a pilot, or return to work on restricted duties;
  • prognosis and likely timeframe for return to full duties (including any reasonable accommodations needed to enable this to occur).

The Australian International Pilots Association (AIPA) then wrote to Qantas asserting that the airline had no lawful basis on which to request a medical report containing such details at that time, noting that Mr Kiernan had a substantial amount of accrued personal leave (approximately 129 days as at December 2012). AIPA also stated that Mr Kiernan had complied with all applicable evidentiary requirements contained in the enterprise agreement and section 107 of the FW Act.

Possibility of disciplinary action

There then followed further correspondence between AIPA and Qantas, provision of another medical certificate (in similar terms to that provided in October 2012), and three further written requests from Qantas to Mr Kiernan requesting the more detailed medical information. Importantly, these written requests also contained a direction that a failure to provide the information sought may result in disciplinary action being taken against Mr Kiernan, including termination of his employment. The final request directed Mr Kiernan to show cause as to why he should not be subjected to disciplinary action.

Proceedings commenced

In February 2013, AIPA commenced proceedings against Qantas seeking a declaration that the company had contravened section 340(1)(a)(ii) of the FW Act, by taking adverse action against Mr Kiernan in the form of threats to take disciplinary action against him for reasons including that he had exercised a workplace right.

Submissions

AIPA

AIPA submitted that provision of a medical certificate in accordance with the terms of the Agreement was a benefit to Mr Kiernan (and therefore a workplace right), as it obviated the need for the employee to provide any other evidence of unfitness for duty. Moreover, because the Agreement enabled Qantas to require an employee to produce a medical certificate after a certain amount of sick leave had been taken, it was unnecessary to imply a contractual term relating to provision of medical information (as contended for by Qantas).

On the grounds that the provision of a medical certificate was a benefit according a workplace right, AIPA submitted that the threats by Qantas to take disciplinary action against Mr Kiernan amounted to adverse action (i.e. injuring him in his employment, or altering his position to his prejudice). Further, this action had been taken because Mr Kiernan was exercising his workplace right of relying on the medical certificate provided.

Qantas

Qantas’ evidence focussed on the operational reasons for which it had required Mr Kiernan to provide the information requested; for instance, that it would assist Qantas in understanding when, if ever, he would be able to return to work in a full-time or part-time capacity and, if so, what adjustments Qantas might be required to make in its business and rostering arrangements, and what re-training he would require. The information provided in Mr Kiernan’s medical certificates did not allow Qantas to determine these matters.

Decision

Justice Rares of the Federal Court dismissed AIPA’s application, finding that:

  • It was necessary to imply a contractual right to allow Qantas to require its pilots to provide medical evidence of the kind it sought from Mr Kiernan, which arose from both the obligations imposed on the company by the Agreement and the Work Health and Safety Act 2011 (NSW). The Court relied on an earlier decision of Justice Madgwick in Blackadder v Ramsey Butchering Services Pty Ltd (2002) 188 FCR 395 in support of the implication by law of such a term into employment contracts.
  • The sick leave entitlements of an employee under statute, an enterprise agreement or an award do not displace the contractual relationship, under which the employer can make the necessary business arrangements to adjust for the impact of an employee’s absence on sick leave and the employer’s obligations under work health and safety legislation.
  • Requiring Mr Kiernan to furnish the information did not interfere with his workplace right to provide a medical certificate in support of an entitlement to sick leave. The information sought related to matters which were not dealt with by the relevant provision in the Agreement.
  • The purposes for which Qantas requested further medical information from Mr Kiernan – including roster allocation and planning his return to work – were legitimate and proper. Qantas did not take this action in order to prejudice Mr Kiernan in the enjoyment of his rights to obtain sick leave under the Agreement.
  • A statement that an employer is contemplating disciplinary action in the future does not constitute adverse action. In any event, there was nothing in the evidence that pointed to Qantas having any intention to interfere with Mr Kiernan’s entitlements regarding sick leave.

What does this mean for employers?

In managing employees on extended sick leave, or who have exhausted sick leave entitlements but remain absent from work, the decision supports an employer’s right to request the provision of detailed medical information in certain circumstances.

In order for this implied contractual right to arise, any applicable enterprise agreement or award must not be exhaustive on the issue; and, importantly, the information requested must be for legitimate operational or business purposes and to enable the employer to comply with its obligations under work health and safety legislation.

A more recent decision of the Fair Work Commission provides further support for employers in dealing with long-term employee absence due to illness or injury. In Grant v BHP Coal Pty Ltd [2014] FWC 1712 (14 March 2014), Commissioner Spencer upheld the dismissal of an employee who had refused to attend a medical assessment by the company’s doctor in order to assess the employee’s fitness to return to work.

Employers should note, however, that the Commissioner also found that BHP Coal should have provided the employee with a clearer explanation as to why it was necessary to submit to an assessment by the company’s doctor, when the employee’s doctor had cleared him to return to work.

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