“It was [the employee’s] decision to return to work in October 2024, which only resulted in a further relapse of their depression for which the IR is not at fault,” Fuiava said.
The reduction reflected changes to employment law requiring greater consideration of employee conduct when assessing remedies.
In a separate recent case, Wynn Fraser Paints employee Keith Gorrett was found to have been unjustifiably dismissed, but his $12,000 compensation was reduced to nil after the authority ruled his unwarranted sexual behaviour towards a colleague was the cause of the dismissal.
Ten medical certificates before dismissal
In the current case, the employee, who has name suppression, had been employed by IR for more than a decade in a supervisory role, overseeing staff in a busy call centre.
In 2024, they developed major depression, were treated by a psychiatrist, and were also diagnosed with chronic pain caused by fibromyalgia, which had gone undiagnosed until June that year.
Between March and September 2024, they provided eight medical certificates covering a period of severe burnout and a major depressive episode.
In October, the psychiatrist recommended a staged return to work, starting with a small number of half days, increasing to more frequent half days, and then progressing to fulltime work later in the month.
The employee initially returned on a reduced schedule of three half days per week, intending to resume fulltime work from October 28, but did not follow the full graduated plan and ignored the more frequent half-days stage.
On October 14, they told their team leader they were struggling with the return, noting workplace changes during their absence and expressing doubts about resuming their leadership role.
They returned to fulltime work on October 29 but called in sick the following day.
An Inland Revenue employee was dealing with major depression as well as burnout. Photo / 123rf
On November 1, IR received a ninth medical certificate stating the employee should be excused from work until November 30 because of a relapse of depression and fibromyalgia, requiring urgent treatment adjustments.
A further certificate dated November 8 indicated improvement and recommended a structured return-to-work plan beginning January 2025, with a gradual progression from part-time to fulltime hours.
However, on November 29, IR advised the employee it was considering ending the employment on medical grounds.
Employment terminated
A meeting was held on December 4 between IR, a union representative and the employee, where the proposal of medical retirement was discussed.
The employee acknowledged IR’s frustration with the situation and explained they had difficulties with medication side effects, including brain fog and indecision, as well as stress from a family health emergency.
After the meeting, IR sought further input from the psychiatrist regarding whether an earlier fulltime return might be possible. The psychiatrist, however, left her practice shortly afterwards and did not respond.
On December 16, IR confirmed the decision to terminate employment on the grounds of medical retirement. The group lead said he had no confidence the employee could return to sustained, meaningful work.
The authority heard the termination letter included references to alleged difficulties in the employee’s family life, which the employee strongly denied, describing the comments as “blatantly wrong, offensive, deeply hurtful and grossly insulting”.
Fuiava agreed, stating the remarks were “ill-considered and lack empathy”, particularly given the employee had not been given an opportunity to respond and was in a vulnerable state.
“Unfortunately, [the employee’s] return to work in October 2024 was not successful and with the benefit of hindsight, it was accepted that they would not have returned when they did,” he said.
While the authority found IR had generally followed its illness and rehabilitation guidelines and sought appropriate medical information, it concluded the process was procedurally unfair.
Fuiava said a fair and reasonable employer would have given the employee a chance to respond to its final concerns before deciding to terminate employment.
“Given what was at stake for [the employee] the defect here was not minor but significant and resulted in their being treated unfairly.”
He found the dismissal unjustified, but declined the employee’s request for reinstatement, citing the risks involved.
An IR spokesperson told NZME it could not comment on the employment matter.
Brianna McIlraith is a Queenstown-based reporter for Open Justice covering courts in the lower South Island. She has been a journalist since 2018 and has had a strong interest in business and financial journalism.