The employee’s neurological assessment was booked for 24 January 2024. Barfoot & Thompson, the employer, knew about the assessment because the employee informed it on 15 January. The next day, it dismissed the employee for medical incapacity.

That is the sentence most readers will remember, and it is not even the most important one. The Employment Relations Authority did find that the employer moved too soon — but “too soon” is the easy lesson, and this determination teaches a harder one. Rhodes v Barfoot & Thompson Ltd [2026] NZERA 543 is about an employer that had more than one way to resolve the very uncertainty it relied on to dismiss, and used none of them.

Twelve years, two head injuries, one unchanged workload

Jonathan Rhodes joined Barfoot & Thompson as a property manager in 2012 and was promoted to senior property manager in 2017. The role was heavy: a large portfolio and the constant, competing demands of landlords and tenants.

In November 2022 he was in a serious work-time car accident. He kept working. By May 2023 he had been diagnosed with a concussion, and still he kept working. Then, on 22 June 2023, while carrying the full load of his role and known by his employer to be concussed, he suffered a further head injury at work.

In late August 2023 the clinical advice reached the employer, in writing and again in a meeting: recovery from concussion would need time away, followed by a graduated return on reduced days and reduced hours, increasing as tolerance allowed. Barfoot & Thompson accepted that advice. It said it had adopted it. Then it left his hours exactly as they were, his colleagues quietly absorbing the overflow, until he went on sick leave on 14 September 2023.

What the employer offered next looked like an accommodation and was not. It proposed a property manager role with a smaller portfolio and lower pay — but still full time. In December 2023 his general practitioner proposed something concrete: a trial return of three hours a day, three days a week. The employer declined, saying he could not come back until ACC’s Stay at Work service cleared him. Stay at Work replied that it could not fix a return date, because recovery from brain injury does not run to a timetable.

By 10 January 2024 the employer had told Rhodes it was considering dismissing him. On 15 January he told it the neurological assessment was booked for 24 January. On 16 January it dismissed him on four weeks’ notice — unpaid, because by then he was unwell and had exhausted his leave.

The test is not the calendar

Dismissal for medical incapacity is a no-fault dismissal, and the law does not require an employer to hold a job open forever. There comes a point, in the old phrase, at which an employer may “fairly cry halt.” But that point is reached by a process, not by a date on a calendar. The settled framework, set out by the Employment Court in Lal v The Warehouse Ltd, asks three things of an employer: that it gave the employee a reasonable opportunity to recover; that it made a fair and reasonable inquiry into the prognosis before deciding; and that it genuinely consulted the affected employee before it acted. All of it sits under s103A of the Employment Relations Act 2000, and the single question that section asks: was this what a fair and reasonable employer could have done in the circumstances.

Barfoot & Thompson said it had given Rhodes roughly six months, from June 2023 to January 2024. The Authority did not accept the arithmetic. For most of those months he was not recovering; he was at work, under the full weight of his role, symptomatic and deteriorating, with a second head injury landing in the middle of it. Time had passed. A reasonable opportunity to recover had not been given. You do not measure the chance to heal by counting the months an employee spent working through the injury, contrary to clinical advice.

The answer was in the contract

Here is the finding that should change how employers think about these decisions.

Rhodes’s employment agreement gave Barfoot & Thompson a discretionary power to require, at its own cost, an independent medical examination. The Authority was careful about this: using that power was not a precondition to dismissal, and an employer is not obliged to invoke it. But it was the mechanism the agreement itself provided for resolving exactly the kind of uncertainty the employer now said justified letting him go. Having declined to use the tool that would have answered the question — and having also declined to wait the few weeks for the neurological assessment it knew was coming — the employer could not then turn the unanswered question into the reason for the dismissal.

The Authority put the same point a second way, and it is worth holding onto. An employer cannot treat a forthcoming medical assessment as material enough to weigh against its business pressures, and then argue that the very same assessment had no bearing on the prognosis at all. The assessment was either relevant or it was not. It could not be both, its relevance chosen to suit the outcome.

This is the spine of the case. Uncertainty about a prognosis is not, on its own, a reason to dismiss. It is a reason to inquire. Where the means to inquire are sitting in the contract and in a booked appointment, an employer that reaches instead for dismissal has not resolved the doubt — it has acted on it.

Uncertainty about a prognosis is not a reason to dismiss. It is a reason to inquire.

An alternative has to answer the medical question

The smaller-portfolio role failed for a related reason. The clinical advice was about pacing: fewer hours, fewer days, a gradual increase as tolerance built. A role with fewer properties but the same full-time hours did not engage with that advice at all. Reducing the size of the job is not the same as reducing the hours, and only one of them was what the medicine called for. A genuine alternative to dismissal has to respond to the actual restriction, not to a different one that happens to be easier to offer.

When the employer helped cause the incapacity

The sharpest part of the reasoning is also the most humane. Rhodes suffered his June 2023 head injury because he was still doing the full job while his employer knew he was concussed. The employer’s own management, in other words, had contributed to the severity of the condition it later relied on to end his employment.

That does not make the dismissal an act of bad faith — the Authority expressly found it was not, more on that below. What it does is raise the bar. Here the Authority drew on Lyttelton Port Company Ltd v Arthurs, where the Employment Court recognised that when an employer’s own actions have caused the employee’s condition, a continuing responsibility to take reasonable rehabilitation steps can arise before it may fairly cry halt. An employer whose handling of an injured employee made the injury worse cannot then end the relationship on the strength of a condition it helped to worsen.

Set against that, the genuine operational strain on the branch — which the Authority accepted was real — could not carry the weight the employer needed it to. Real pressure does not excuse an incomplete inquiry.

A practitioner’s desk at dusk in warm lamplight: a tied bundle of papers, a fountain pen, an empty cup, and bound law volumes, with the Auckland skyline and Sky Tower beyond the window.

Losing without bad faith

It matters that the Authority found no predetermination. Barfoot & Thompson kept in contact, warned Rhodes that dismissal was possible, and met with him and his support person. An employer is allowed to form a provisional view and remain open to being persuaded out of it; that is not a closed mind.

So this was not an employer that set out to be unfair. It was an employer that acted on a view before the inquiry beneath the view was complete. That is the quiet danger in medical-incapacity dismissals: you can do most of the human things right — stay in touch, give warning, hold the meeting — and still lose, because the process failed at the one point that mattered, the gathering of the facts before the decision. Good faith is not a substitute for a finished inquiry.

Unjustified is not the same as out of pocket

The remedy repays a close read, because it separates two questions employers routinely run together.

The Authority awarded Rhodes $30,000 in compensation for the hurt and humiliation of an unjustified dismissal: income security gone, work he valued gone, colleagues he counted as friends gone, all while he was still recovering from a brain injury. The figure aligns with recent comparable awards — $30,000 in the Authority’s Honamombe v Tegel Foods Ltd, and $30,000 again in the Employment Court’s Sheridan v Pact Group earlier this year — with the Authority drawing the closer analogy to Sheridan, because Rhodes’s brain injury left him vulnerable in ways a physically injured worker may not be. Nor was any deduction made for contribution: declining a full-time role that did not match the clinical advice was not something the Authority held against him.

But he recovered no lost wages. He was receiving ACC compensation at 80 per cent of his pre-incapacity earnings, he had exhausted his paid leave, and his employer had no contractual duty to top up the difference. Even if a fair process had kept him employed for longer — and the Authority accepted it probably would have — he would have stayed on the same ACC income, earning no additional wages in the meantime. The dismissal was unjustified, but it did not cause the wage loss he claimed. For anyone advising on quantum, that distinction is the point: a dismissal being wrong and a dismissal costing wages are two separate findings, and the second does not follow automatically from the first.

What a fair and reasonable employer takes from this

The instinct behind Barfoot & Thompson’s decision is common and understandable. A small team was under real strain, an absence had no clear end, and at some point a business needs certainty. But certainty is something you resolve towards, not something you declare. When a prognosis is unclear, the task in front of the employer is to answer the question, not to act on the fact that it is unanswered.

Three things follow for any employer facing the same pressure. If your employment agreement gives you the power to require your own medical examination, that power is not decoration; declining to use it and then dismissing for the doubt it would have settled is close to the definition of an unjustified dismissal. If specialist information is weeks away and you know it, the reasons to wait are stronger than the reasons to move. And if your own handling of the injury made it worse, your obligations rise — they do not fall — as a result.

We have written before, in the context of an IRD dismissal, that procedural fairness in a medical case is mostly a discipline of not deciding until you have the facts. Rhodes is the same lesson from a different and more exposed angle: a recognisable employer, a sympathetic employee, and a contract that held the answer the whole time. The months were real. The opportunity to recover was never offered.

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Sources

Lex Praxis advises New Zealand employers on employment law, including medical-incapacity dismissals, procedural fairness, and good-faith obligations. This article is general commentary and does not constitute legal advice. For advice specific to your circumstances, contact us directly.