What is it?
Medical incapacity is a term used to describe an individual's inability to work due to a medical condition or illness. This might be a permanent condition, or one that they could recover completely from. Either way, an employer should first work around the employee's condition and termination certainly should not be rushed into!
What should an employer do before considering medical incapacity?
If an employer is concerned that you are not going to be able to return to your role, either for a significant period or indefinitely, before doing anything, they need to get all the facts straight. This means:
what your employment agreement says
what your prognosis is
whether the business can operate without you until you can return fully
if it can't, could the role be filled in a casual capacity, by a temp or by another employee for the temporary period until you can return
if not, whether there are alternative roles either temporarily or permanently
Note: Employers shouldn't replace you permanently while you are still employed
The medical incapacity process
First and foremost, this is a process! The employer must consult you before making any decisions and they need to let you know that this process could affect you employment. This process involves knowing
what you say
what your medical experts say
if there are alternative hours or roles that you could, and would, do?
... before an employer makes a decision!
If they don't do this?
Then any termination could be an unfair dismissal and you could have a grievance to raise.