Managing Medical Incapacity in the Workplace

A Guide for Retail Employers

In retail, staff absences can have an immediate impact on customer service, rosters, and team morale. Prolonged employee absences due to illness or injury present legal and operational challenges. In cases where there is uncertainty about whether an employee can return to work, employers may need to assess whether the employee is medically incapacitated, and what the next steps might be. This is often a difficult and sensitive process.

It is important to note that the process can vary depending on the terms of the employee’s individual’s employment agreement, which may contain relevant provisions around absence and medical incapacity.

Medical Evidence

Section 68 of the Holidays Act 2003 enables employers to request proof of illness or injury (usually a medical certificate) when an employee is on sick leave for three or more consecutive calendar days. If the request is made earlier, the employer must cover any reasonable costs incurred.

Medical Assessment

If an employee remains absent for an extended period and there has not been sufficient consultation with the employer, it may be appropriate for the employer to request and pay for a formal medical assessment by an appropriate health practitioner. The purpose of this is to:

• understand the employee’s current fitness for work;
• identify whether any accommodations or adjustments may support a return to work; and
• assess whether the employee is likely to resume full duties within a reasonable timeframe.

The employee should also be invited to provide the health practitioner with medical notes from their GP to support a more complete assessment. The employee must be given the option to have a support person at the assessment and be encouraged to share relevant medical information with the assessor.

Consultation

Once the medical report is received, the employer must engage in good faith consultation with the employee. This involves discussing the report’s findings, understanding the employee’s perspective on their health and how it affects their ability to work, and considering whether any reasonable accommodations or adjustments could support a safe return.

Depending on the nature of the role, reasonable adjustments could include:

• reduced or flexible hours;
• lighter or alternate duties (e.g. administrative or stock work rather than customer-facing or heavy-lifting tasks);
• phased return-to-work plans; or
• modified equipment or work areas to support safe performance.

Employers are not required to create an entirely new role, but they must genuinely consider whether temporary or permanent adjustments could enable the employee to carry out their duties safely.

Considering Outcomes

The employer should assess the employee’s current and future fitness for work, explore whether a return is feasible (and on what terms), and discuss all potential outcomes, including, where no viable alternatives exist, the possibility of termination on medical incapacity grounds. The employee must also be given the opportunity to provide further information or medical evidence before any final decision is made.

Common Pitfalls and Risks

Even well-intentioned decisions can expose employers to personal grievance claims if the process is rushed or incomplete. The most common risks include:

• failing to obtain adequate medical evidence;
• not consulting the employee properly; or
• making a decision prematurely or based on assumption rather than fact.

Taking a methodical, documented approach helps mitigate these risks.

Final Thoughts

Medical incapacity can be a difficult process to manage. It requires a structured, legally- compliant and empathetic approach. Employers must ensure that any decisions about the continuity of the affected employee’s employment are based on reliable medical evidence, genuine consultation, and a fair process.

If you are an employer or Human Resources professional seeking advice on how to manage medical incapacity in your workplace, our employment experts at Ford Sumner can assist you. Please do not hesitate to contact Jordan Todd for more information: jordan@fsl.nz.