The capacity of an employee to perform and unfair dismissal cases

Where the reason for the termination of the employment of an employee is related to the capacity of the employee to perform his or her duties, and achieve results, the test applied by the Fair Work Commission in an unfair dismissal case is an objective one.

“It is necessary to consider whether the employer had a valid reason for the dismissal of the employee, although it need not be the reason given to the employee at the time of the dismissal. 1 In order to be “valid”, the reason for the dismissal should be “sound, defensible and well founded”2 and should not be “capricious, fanciful, spiteful or prejudiced.”3

The Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer. 4 The question the Commission must address is whether there was a valid reason for the dismissal related to the employee’s capacity or conduct (including its effect on the safety and welfare of other employees).5 Capacity is the employee’s ability to do the job as required by the employer.6 Capacity also includes the employee’s ability to do the work they were employed to do.7

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. 8

It is not enough for an employer to establish that it had a reasonable belief that the termination was for a valid reason. 9 The Commission must make a finding, on the evidence provided, whether, on the balance of probabilities, the conduct occurred or the performance was satisfactory.10

Ramos v Coast Community Pty Ltd (2021) FWC 1480 delivered 18 March 2021 per Saunders DP