Health issues

Medical incapacity

In these situations, employees often feel vulnerable, stressed and worried about not being able to do their job, and concerned about what will happen to them financially if they lose their job.

Similarly, their employer may be feeling pressure about how long they’re going to keep the job open, how they’ll run their organisation, treat the employee with dignity and manage the workload while they recover or undergo treatment.

Employers are not required by law to hold jobs open indefinitely for employees who are unable to carry out their duties. The question is how long an employer should keep the role open for the employee to return to.

Before making a decision on what to do, the employer needs to understand how long the employee is likely to be off work and whether they’ll be able to do their job again. To get this information, the employer should work in a positive and supportive way with their employee.

Employers should make sure that any investigation into understanding the medical situation for their employee is not viewed as a disciplinary investigation - the employee has not done anything wrong.

Employers must follow a fair and reasonable process, which includes considering the range of factors below. The Employment Agreement Builder has a draft medical retirement clause that can be included in

Employment Agreement Builder - Business.govt.nz(external link)

Deciding to end employment relationship

To end an employment relationship, an employer needs to reasonably believe that an employee can no longer do their job and that the employer cannot reasonably keep the job open for them. To do this the employer should consider a range of factors listed below.

• The terms of the employment agreement.
• The nature and extent of the problem, including how long the employee has already been away from work. Where the incapacity is caused by a health issue, the employer should request appropriate medical advice. Sometimes it may be appropriate to ask for independent or specialist advice. 
• Employees have the right to refuse to provide an employer with access to their medical information unless this is required in their employment agreement (even then they can decline). If an employee is not willing to provide this information, the employer can make a decision based on the information the employer has.
• The nature of the employment and how important the employee’s role is to the employer’s organisation. Consider:
  • the size of the organisation
  • if the employer has been able to manage for long periods of time without the employee or they’ve had to bring in someone else to do the job
  • what the impacts of the employee’s absence are on the organisation.
• The chance of recovery and the likely timeframe for returning to work (which should be based on objective information such as a doctor's report).
• The employee's entitlement to (paid and unpaid).
• The employee's length of service.
• Steps the employer can take to help with rehabilitation, such as providing part-time or light duties.
• How long the employee's employment would have continued if not for the health issue.
• If there are any alternatives to dismissal that are reasonable in the circumstances – such as part-time or reduced hours.
• If the employer is at fault for the employee’s problems in any way. For example, where the employer may have failed to provide a safe workplace causing mental stress to the employee, who then has to take a lengthy period of time off to recover.

Types of worker

Other links you might find useful:

Employment Relations Authority(external link)

Business.govt.nz(external link)

Citizens Advice Bureau(external link)

Community Law(external link)