FWC rulings offer 'reassurance' for Australian employers managing long-term ill or injured workers

The decisions were handed down in March 2026 and address circumstances that many employers regularly encounter, including extended absences, inconclusive medical evidence, push-back on independent medical examinations (IME), and questions about reasonable adjustment obligations.

The FWC has made clear that employers are entitled to seek adequate information about employees' fitness for duty, and that dismissal for genuine incapacity, following a fair process, can be fair and lawful, offering some reassurance to employers who act reasonably and in good faith.

Reasonable medical assessments

In the first case (9-page // 289KB PDF), a senior employee took two extended periods of medical leave and provided medical certificates stating he had been diagnosed with two medical conditions, but the certificates did not disclose the nature, extent or prognosis of the conditions, nor did they explain how or in what ways the conditions impacted the employee’s work.

When he sought to return to work, he produced to the employer a medical certificate containing a graduated return-to-work programme, a step-by-step plan designed to help employees gradually resume work duties. It proposed a return over six weeks, but provided no information explaining why a graduated return was needed or whether any other adjustments would be required.

The employer sought clarification and directed the worker to attend a medical assessment with an independent psychiatrist, who confirmed the worker was unfit to work.  The worker then resigned and brought an unfair dismissal claim, alleging that he was forced to resign because of, among other things, the employer’s failure to consult on return-to-work options.

The FWC found it was "reasonable and appropriate" for the employer to require the medical assessment, given the worker's long period of absence and the lack of information in his medical certificates. The FWC said that the direction to attend the IME came after the employee was given written advice about the reasons for the direction, being that his medical certificate did not provide enough information to assess whether it was safe for him to return to work.

The employer had a fitness for duty policy, a copy of which was provided to the employee with the direction to attend the IME, so he had information about the process that would be followed.  Ultimately, the FWC found that the worker had chosen to resign rather than face the potential of an adverse fitness-for-duty assessment, concluding that he had "made a considered decision to resign which was not a result of conduct" by the employer.  The constructive dismissal claim was rejected.

The FWC’s written decision did not make any comment about whether the employment contract contained a term allowing for the employer to direct the employee to undergo an IME, as the employee did not challenge the direction in this case, though there was a policy in place.  Given previous FWC cases where directions to do so were challenged, it remains best practice for employers to have a term in employment contracts and policies allowing them to direct employees to undergo medical assessments where necessary.

In the second case (16-page // 361KB PDF), a worker had been employed as a customer service operator for Brisbane's river ferries since 2019 and had suffered from deep vein thrombosis (DVT) since 2012.  Her role required her to remain on her feet on a moving platform for considerable periods. In the year to April 2025, she was absent from work on paid and unpaid leave for a total of 114 days due to her conditions.

The employer directed the employee to attend an IME, which found she was incapable of safely undertaking her full duties, but suggested she could potentially return within a month with modifications and possibly resume full duties following surgery scheduled for November.

The worker argued that this IME determined that she would be able to fulfil the requirements of the role in the foreseeable future. The employer dismissed the worker on the basis it could not modify her duties or hours, and that she would not be able to fulfil the requirements of the role in the foreseeable future.

In its decision, the FWC did not accept that the IME conclusively determined the worker could fulfil the requirements of her role in the foreseeable future.  It found the medical evidence, when considered overall as at the time of termination, "fell well short" of clearly indicating she would be fit to return to full duties in the foreseeable future.

The FWC also accepted that, taking into account the employer's rostering arrangements, the impact on other staff and the cost to the employer, the accommodations proposed by the worker were not practical or reasonable in the circumstances.  It also found that there was "no reasonable adjustment that could have been made" to accommodate the worker's current or future incapacity.  On that basis, the FWC was satisfied there was a valid and lawful reason for the dismissal, and that the dismissal was not harsh, unjust or unreasonable.

Both these decisions have important implications for employers who are managing long-term ill and injured workers:

IMEs are a legitimate and valuable tool

Both cases confirm that directing employees to attend IMEs is lawful and appropriate where there is a legitimate and objective need, such as extended absence or inconclusive medical information.

Where an employee has had a long period of absence and has provided generic or uninformative medical information, a direction to attend an independent assessment will likely be considered reasonable. Similarly, where there is a genuine safety concern about an employee returning to duties, an IME is an appropriate and necessary step to help ensure compliance with work health and safety duties.

Directions should be communicated in writing and explain the reason for the assessment, and, ideally, be supported by a term of the employment contract and relevant policies allowing a direction to employees to attend.   

Ensure medical certificates are adequate and clarify when they are not

The first case illustrates the problem of medical certificates that disclose little information about an employee’s medical condition, which many employers experience.  In that case, the medical certificate revealed neither the nature of the diagnoses nor any clinical basis for a graduated return-to-work programme.  Employers are not obliged to accept and act on inadequate medical information.

Where medical certificates fail to provide sufficient information to allow an employer to properly manage an employee’s return to work after an extended absence or to assess the employee's fitness for duty, employers should seek clarification in writing. Where clarification is not forthcoming, an independent assessment is often the appropriate next step.

Reasonable adjustment obligations are not unlimited

In the second case, the worker argued her employer was obliged to consider her capacity in the foreseeable future and whether reasonable adjustments could be made to support her return to work, however, the FWC made clear that reasonableness must be assessed on an objective basis in the context of the employer's actual operational circumstances.

Factors including rostering arrangements, the impact on other staff, and cost were all considered, and it was ultimately found, in the circumstances, that there was "no reasonable adjustment" that could have been made to accommodate the worker.
When assessing reasonable adjustments, employers should conduct and document a genuine, thorough enquiry into the available options. Relevant factors to consider in the enquiry include the nature of the role, operational demands, rostering constraints, and the effect on work colleagues.

Dismissal for incapacity requires clear medical evidence

The second decision is an important reminder that employers need not wait for absolute certainty before deciding whether to dismiss an employee for an inability to perform the inherent requirements of their role. The Commissioner found, in the circumstances of that case, that, overall, the medical evidence at the time of termination fell well short of clearly indicating the worker would be fit for full duties in the foreseeable future, given that any return was contingent on the success of proposed surgery. Speculative future fitness does not prevent a lawful dismissal for incapacity.

When considering dismissal on the grounds of incapacity, employers should ensure they obtain clear and up-to-date medical evidence and assess it as at the date of the decision. Future projections based on uncertain outcomes, such as pending surgery, will not necessarily mean the employer has to wait to decide about whether to dismiss due to incapacity, although each case will be decided on its own facts. If in doubt, employers should obtain specialist advice before acting.