Medical board out is a procedure initiated by a registered Occupational Health Doctor (OHD) to certify a sick (or disabled) employee is unfit for his current job. This whole process is inline with the national law, in order to protect the affected employee from further harmful condition which may worsen his / her medical conditions.
Take note that the affected worker, was once a healthy person. They got sick, or involved in an accident at their workplace and if they continue working after that, their health or life, is at significant risk! So its only fair for the law to protect this group of people.
As for an example. Imagine a healthy 25 years old guy, who works on an oil rig platform (digging oil from the sea bed). He and his colleagues are commonly exposed to benzene inhalation at work. This is a health risk that they are aware of, before accepting the high paying job. Benzene is known to cause severe health effect such as cancer, thats why he is required to get his blood checked for benzene poisoning, every few months.
During the periodic medical check up, if the attending OHD diagnose this guy with benzene poisoning, the OHD can exercise medical board out, to stop this guy from further exposure to benzene. He is then sent for further treatment (usually requiring multiple follow ups session) and once he is declared fit, he can go back to work. His absence from work due to this medical condition, is protected by law and regulations. Imagine if there is no such law, he will probably continue working as he is paid for it, without knowing that he is very likely to develop cancer at the young age of 40 years old !