Managing Ill And Injured Employees - Obligations As An Employer

The recent Fair Work Commission (FWC) decision in Rennick v Victorian WorkCover Authority [2026] FWC 554 provides timely guidance on what employers must, and need not, do when managing ill or injured employees. The decision of Commissioner Thornton confirms there is no general obligation to rehabilitate an employee who has no capacity for work, and no duty to offer redeployment to another role in those circumstances.

Background 

The Applicant was a workplace health and safety inspector with 26 years of service with Victorian WorkCover Authority. During his employment, the Applicant was repeatedly exposed to traumatic workplace incidents, including serious accidents and fatalities.

From around November 2022, he began experiencing periods where he could not work and while he made multiple attempts to return to the workplace, those attempts were disrupted, including by complaints relating to his conduct.

In November 2023, his doctor certified him unfit for work until January 2024. In January 2024, the Applicant stated he was “starting to feel better”, but before any return-to-work could occur, a motorbike accident on his farm in February 2024 triggered flashbacks linked to a fatal motorbike incident he had investigated at work.

Two separate medical reports had been obtained by WorkCover in October 2024 and May 2025 which certified that the Applicant was unable to meet the inherent requirements of this role and was permanently unable to return to his position. Based on these reports, WorkSafe provided the employee with an opportunity to respond to potential dismissal on the grounds of medical incapacity and, after considering his response, terminated the Applicant from his employment in July 2025.

Duty to Rehabilitate

 In finding that the Applicant’s dismissal was not unfair, the FWC held that when an employee has no capacity for work, an employer neither has the ability nor the obligation to pursue rehabilitation.

In this case, the Commission found that the Applicant had no capacity for work from at least November 2023, based on the evidence of the medical practitioners. While each left open the possibility of a future return-to-work, their overall prognosis was “guarded”, with concerns that his symptoms could lead to permanent incapacity from any employment.

The Commission also dismissed the claim that WorkCover’s failure to rehabilitate constituted a course of conduct that contributed to, or “engineered”, the Applicant’s incapacity. On the evidence, the Applicant had no capacity to engage in work rehabilitation or any employment-related activities.

Interestingly, the FWC emphasised that in the context of unfair dismissal, it is not necessary to assess what an employer should or should not have done in relation to the rehabilitation. The central question is whether there was a valid reason for dismissal, with primary focus on the employer’s capacity at the time of termination. Ultimately, deficiencies in a rehabilitation process will not, of themselves, render a dismissal unfair.

Duty to Redeploy 

The applicant also contended that WorkCover should have considered redeployment to an alternative role, even at a lower classification or salary.

Relying on the decision Rowe v V/Line Pty Ltd [2014] FWC 1437, the Commission held that it is not necessary to consider whether an employee could perform a different role. Rather, the test for a valid reason is concerned with the employee could perform the inherent requirements of their substantive position at the time of termination, not a hypothetical or alternative one.

In this case, the Applicant’s submission that he should have been redeployed was irrelevant. The evidence established that he had no capacity for any work for a significant period prior to, and at the time of, his dismissal. Accordingly, the Commission held that there was no obligation on WorkCover to reconsider redeployment, and it did not affect the validity of his dismissal.

Lessons for Employers

 Moving forward, we recommend employers:

• Obtain and document medical evidence. Under Work Health and Safety laws, employers can direct employees to undergo an independent medical examination at the employer’s expense. In this particular case, the medical reports obtained by WorkCover were key to successfully defending the dismissal and they were clear about the Applicant’s ongoing incapacity.
• Understand rehabilitation limits. Employers are not required to engage in rehabilitation or offer suitable duties when an employee has no capacity for any work. However, if an employee has some capacity and is on workers’ compensation, employers must support rehabilitation and offer any suitable duties that may be available.
• Avoid creating new position. There is no obligation to create a new position for an ill or injured employee. The FWC assesses unfair dismissals based on the inherent requirements of the employee’s actual position, not hypothetical positions. However, separate from unfair dismissal, employers must make reasonable adjustments under anti-discrimination law to accommodate an employee’s disability, provided the adjustments do not cause unjustifiable hardship.

If you require assistance with managing an injured an employee, call our employment law team today.