Capacity

Print this page

Overview

Capacity is the employee's ability to do the job as required by the employer.^[1] Capacity also includes the employee's ability to do the work they were employed to do.^[2]

The appropriate test for capacity is not whether the employee was working to their personal best, but whether the work was performed satisfactorily when looked at objectively.^[3]

Inability to perform the inherent requirements of the position may be a valid reason for the termination of an employee. This issue was considered in J Boag & Son Brewing Pty Ltd v Button: ^[4]

Where an employer relies upon an employee's incapacity to perform the inherent requirements of his position or role, it is the substantive position or role of the employee that must be considered and not some modified, restricted duties or temporary alternative position that must considered. [emphasis added].

The Fair Work Act 2009 protects an employee from being dismissed due to a temporary absence for illness or injury for up to 3 months, or up to three months in total over a 12 month period, or where an employee is on paid personal/carer's leave for the duration of the absence.^[5] After 3 months it becomes a question of whether the employee is likely to return to their duties in the short or medium term.^[6] Medical evidence could have a bearing on the adequacy of the reason for termination.^[7]

Where an employee has been dismissed for poor performance, another relevant criterion is whether or not they were warned about their performance.^[8]

Case examples

Valid reason due to capacity

Performance

Fichera v Thomas Warburton Pty Ltd [2012] FWA 4382 (Gooley C, 24 May 2012).

The employee was a Branch Manager at a branch that had low sales and was underperforming. It was found that the employee was incapable of providing the necessary leadership to improve the performance of the branch and this was a valid reason for dismissal.

Note: The employer however failed to follow its own performance management process and warn the employee that his employment was at risk. This rendered the dismissal unfair.

Physical capacity

Birdi v Rail Corporation NSW T/A RailCorp [2011] FWA 7728 (Harrison C, 10 November 2011).

Permission to appeal refused in [2012] FWAFB 1404 (Watson VP, Richards SDP, Cloghan C, 24 February 2012).

It was found, on medical evidence, that the employee was unable to perform the inherent requirements of either his current role as a train guard or in any other non-safety critical role. This was a valid reason for dismissal and the termination was not harsh, unjust or unreasonable. The application was dismissed.

Physical capacity

Ermilov v Qantas Flight Catering Pty Ltd, PR953449 (AIRC, Cartwright SDP, 18 November 2004).

Permission to appeal refused in PR956925 (AIRCFB, Giudice J, Hamberger SDP, Raffaelli C, 4 April 2005).

There was conflicting medical evidence about the employee's capacity to perform the role. It was found that physical incapacity caused by a work-related injury amounted to a valid reason for dismissal.

Permission to appeal was refused and the application was dismissed.

Physical capacity – inherent requirements

Harte v Forbes Australia Pty Ltd T/A Hunt Boilers [2011] FWA 6948 (Bissett C, 18 October 2011).

The employee was employed as a technician and was injured at work. He was subsequently placed on office duties. His substantive position required both site-based and office-based duties. The employee was unable to perform the inherent requirements of his job. This was found to be a valid reason for the applicant's dismissal.

It was found that the employee's dismissal was not harsh, unjust or unreasonable.

Physical capacity and conduct – restricted duties and drink driving

J Boag & Son Brewing Pty Ltd v Button [2010] FWAFB 4022 (Lawler VP, O'Callaghan SDP, Williams C, 26 May 2010), [(2010) 195 IR 292].

The employee was employed as a brewery technician and suffered a congenital health issue that placed him on restricted duties. After numerous medical investigations the employer terminated the employment contract on the basis that the employee could not perform the inherent requirements of his substantive role and for breaching policy in relation to a drink driving offence.

It was found that the appropriate test for capacity involves the consideration of the inherent requirements of the substantive position and not the modified position. It was also found that the employee had breached a reasonable policy of the employer concerning drink driving. The application was dismissed.

Loss of security clearance

Applicant v Department of Defence [2014] FWC 4919 (Deegan C, 22 July 2014).

The employee was employed by an agency known as the Australian Signals Directorate. He was required, as a condition of his employment, to hold a Top Secret Positive Vetting (TSPV) security clearance. After receiving a number of reports about the employee's behaviour, a review was conducted to determine if the employee should have his security clearance altered or revoked. As a result of the review the employee's security clearance was revoked. He was advised he would not be able to apply for a new clearance for a period of five years. The employee was dismissed because he did not hold an essential qualification, the TSPV security clearance.

The Commission was satisfied that there was a valid reason for the employee's dismissal. The holding of a TSPV clearance was an essential requirement of the employee's employment. The loss of that qualification was a valid reason for the dismissal.

NOT a valid reason due to capacity

Capacity – psychological

Ambulance Victoria v V[2012] FWAFB 1616 (Watson SDP, Hamilton DP, Booth C, 15 March 2012).

The employee was absent from work for a long period of time for medical reasons. It was found that there was no clear finding on medical evidence that the employee was unable to perform the inherent requirements of the position.

Note: On appeal it was found that there was no error in the first instance and the appeal was dismissed.

Physical capacity – frustration of employment contract – dishonesty

Balfours Bakery v Cooper [2011] FWAFB 8032 (Giudice J, Hamberger SDP, Spencer C, 2 December 2011).

The employee suffered a shoulder injury. He made a claim for income protection insurance and had access to 2 years' income protection. He then made a WorkCover claim. The employer dismissed the employee and claimed that the injury prevented him from returning to work and that he had been dishonest in making both the insurance claim and the WorkCover claim.

It was found that this was not a valid reason for the termination and that the employee's dismissal was harsh, unjust or unreasonable. Permission to appeal was refused.

Capacity – psychological

Dundovich v P & O Ports, PR923358 (AIRCFB, Ross VP, Hamilton DP, Eames C, 8 October 2002).

An employee with a work-related injury participated in a return to work program but was dismissed at the conclusion of the 2 week program.

It was found that there was no valid reason for the employee's dismissal.

References

^[1] Walton v Mermaid Dry Cleaners Pty Limited [1996] IRCA 267 (12 June 1996), [(1996) 142 ALR 681 at p. 684].

^[2] Webb v RMIT University [2011] FWAFB 8336 (Drake SDP, Hamilton DP, Jones C, 8 December 2011) at para. 6.

^[3] Crozier v Palazzo Corporation Pty Limited t/as Noble Park Storage and Transport, Print S5897 (AIRCFB, Ross VP, Acton SDP, Cribb C, 11 May 2000) at para. 62, [(2000) 98 IR 137].

^[4] J Boag & Son Brewing Pty Ltd v Button [2010] FWAFB 4022 (Lawler VP, O'Callaghan SDP, Williams C, 26 May 2010) at para.22, [(2010) 195 IR 292].

^[5] Shortland v Smiths Snackfood Co [2011] FWAFB 2303 (Watson VP, O'Callaghan SDP, Cargill C, 29 April 2011) at para. 19.

^[6] ibid.

^[7] ibid.

^[8] Fair Work Act s.387(e).

Updated time

Last updated

15 January 2020

Ribbon

Fair Work Commission

Main menu

Unfair dismissals benchbook

Capacity

Table of contents

On this page