Australia: Managing ill or injured employees – A delicate balancing act

One of the most challenging issues faced by clients of employment relations advisers is managing an employee who is either ill or injured. The difficulty arises from the need to balance the risk of exposure to claims of discrimination, unfair dismissal and the newly heralded "general protections" against the potentially exorbitant expense of workers compensation claims.

Refusing to hire because of illness or injury

Anti-discrimination legislation imposes obligations upon employers not only during the employment relationship, but also at the initial recruitment stage. Consequently, where an employee who is ill or has an injury seeks employment, the HR manager or person responsible for recruitment will need to take particular care and should seek legal advice to minimise the risk of a discrimination claim being lodged against the business.

Recruiters need to be aware of who can be excluded from hiring, which questions can be asked during an interview and which should not, as well as what tests can lawfully be carried out in determining the suitability of a candidate.

Van Der Kooij v Fire and Emergency Services Authority of WA [2009] WASAT 221

The applicant was a volunteer firefighter who applied to become a career firefighter with the Fire and Emergency Services Authority of WA (FESA). During the recruitment process, the applicant failed the medical clearance because he was assessed as being colour blind. FESA determined that the applicant was unfit for the nominated role until further medical information was obtained.

FESA subsequently referred the applicant to an optometrist who administered the wrong test and found that the applicant was fit for the role. However, the occupational physician rejected these results and arranged for the applicant to undergo a simulated clinical test in New South Wales, known as the Fire Brigades Colour Vision Test. After the applicant failed the NSW test, FESA rejected his employment application.

The applicant argued that FESA had unlawfully (directly and indirectly) discriminated against him in the selection process because of his impairment, and had also discriminated against him in arranging for him to sit the NSW test.

The inherent requirements exception

FESA sought to rely upon the so-called inherent requirements exception to an action in direct and indirect discrimination – namely, that it was reasonable to conclude that the applicant would be unable to carry out reasonably required work in the course of the employment.

On appeal from the State Administrative Tribunal's decision that FESA was entitled to rely upon this exception, the Full Bench outlined that the central issue concerned the nature of the work performed by a firefighter and whether the applicant's impairment affected his ability to the extent that FESA could rely upon the inherent requirements exception.

The Full Bench stated that for this exception to apply, the employer had to:

  • Show, through appropriate evidence, what the inherent requirements of the job are, the nature and conduct of the job and the methods of performing it
  • Fairly and objectively assess an inability to perform the inherent requirements of the job and not base its decision on perceived notions of ability because of the impairment
  • Consider the individual applicant and his/her specific abilities and provide him/her with every opportunity to show that he/she could do the job despite the impairment

The Full Bench found that colour is an important component in the role of career firefighters because they must make decisions quickly and accurately in very difficult circumstances and often based on colour. Further, colour is a fundamental cue in firefighting and reliance upon other cues is unacceptable because it increases the time taken to make a decision and influences the accuracy of the decision in circumstances where a mistake could be catastrophic.

In relation to FESA's decision to arrange for the applicant to undertake the NSW test, it was found that this is the most appropriate practical test for ascertaining acceptable and unacceptable levels of risk that colour vision deficient candidates pose to themselves, their work colleagues and the public. Further, the Full Bench found that by arranging for the applicant to take this test, FESA demonstrated that it did not apply a blanket policy of refusing to employ individuals with colour vision deficiency. The applicant's claim was rejected on the basis that FESA had successfully proven the inherent requirements exception.

This case demonstrates that employers are within their rights to require prospective employees to disclose any injuries or illnesses which may affect their capacity to carry out the duties required of the advertised position. However, where such injury or illness is disclosed, the employer needs to identify the inherent requirements of the job and objectively assess the prospective employee's ability to carry out these requirements. Further, any test which is implemented by an employer must represent a fair and objective method of carrying out this assessment, must be performed by highly qualified assessors and must be tailored to the inherent requirements of the specific role. This can involve considerable expense. 

J  Boag  and Son Brewing Pty Ltd v Button [2010] FWA 4022; [2010] FWAFB 4022

The inherent requirements exception was revisited by Fair Work Australia (FWA) in the context of an unfair dismissal claim. The applicant was employed by J Boag and Son Brewing Pty Ltd as a brewery technician. During his employment, the applicant developed an abdominal hernia.

After the applicant was advised by his specialist that he should avoid lifting anything in excess of five kilograms, Boags arranged for an OH&S consultant to assess his fitness for work. This assessment found that the applicant should avoid strenuous activity, including kneeling, squatting, lifting above five kilograms, lifting from floor level, running or jumping. From this date, the applicant continued to perform his duties with the assistance of work colleagues whilst observing these restrictions.

However, approximately one year later, the applicant was allegedly flagged by Boags' insurance company as a high risk and liability. This led Boags to arrange for an occupational therapist to assess his capacity to perform the inherent requirements of a brewery technician's job, which inevitably confirmed that the applicant was unable to perform his role safely. Given his limited skill set, it was decided that he could not be redeployed to another role and his employment was terminated. The applicant lodged an unfair dismissal claim against Boags, which defended the claim on the basis that the applicant could not perform the inherent requirements of the job, constituting a valid reason for the dismissal.

The applicant, in reply, asserted that although he could not perform the inherent requirements of the job without the assistance of work colleagues, Boags had modified the inherent requirements to accommodate his restrictions by requiring his work colleagues to provide necessary assistance.

The first instance decision was that although it is almost universally the case that a failure of an employee to carry out the inherent requirements of the job will constitute a valid reason for dismissal, the present case was rather unique. This was because the applicant had continued to work in a satisfactory manner within the confines of his restrictions by relying on his co-workers, whose workloads had increased.

FWA agreed with the applicant's submissions that Boags had modified the inherent requirements of the job and that therefore there was no valid reason for the dismissal. As a result, FWA ordered that the applicant be reinstated.

On appeal, the Full Bench relied upon High Court authority in X v Commonwealth (1999) 200 CLR 177 to reach a finding that where an employer relies on the inherent requirements exception, it is the substantive role of the employee that must be considered, not some modified, restricted duties or temporary alternative position.

The Full Bench concluded that the applicant's incapacity to perform the inherent requirements of the job constituted a valid reason for dismissal. The appeal was allowed and the reinstatement order was overturned.

Terminating ill or injured employees

A clash of obligations is created when the employer is confronted with the risk on the one hand that the dismissed ill or injured employee will make a discrimination, unfair dismissal or general protections claim, and the risk on the other hand that he or she will make a workers compensation claim. The particular issue with workers compensation is its expense.  

An additional risk for the employer is the possibility of a breach of occupational health and safety legislation if the continued employment of an ill or injured worker could pose a danger to the health and safety of his or her colleagues. Other employees of the business could make a workers compensation claim because the employer has failed to provide a safe working environment by continuing to employ the sick or injured employee.

Employers who find themselves in this situation are likely to need specialist legal advice if they are to make an accurate assessment of the risks of terminating employment versus the risks of not terminating employment. An important factor to consider is that the lodgement of a workers compensation claim can dramatically increase an employer's workers compensation premium to the point where the business becomes unviable. (See breakout box.) Typically, it can cost medium-sized employers from $70,000 to $300,000 in increased premiums if they terminate an injured worker.

The practical reality is that the cost of a discrimination or unfair dismissal claim is likely to be equal to only a fraction of the cost of an increase in premiums following a workers compensation claim. Sadly, what this means for employers is that it can be much cheaper to break the law than to comply with it.

Workers compensation premiums

Estimation of claims

A claim will be estimated in accordance with the Claims Estimate Manual (capped at $150,000.00 per worker) even where it is disputed, unless a notice of discontinuance of payments has been issued to the worker and a period of three months has elapsed without response from the worker or their solicitor.

Termination/redundancy related claims

Where the worker has an entitlement to weekly benefits under the relevant workers compensation scheme and their employment has been terminated or they have been made redundant, the insurer must immediately increase the estimated claim in accordance with the following formula:

  • Where the claim is up to 26 weeks - 104 weeks of compensation
  • Where the claim is between 26 weeks and 52 weeks - six years of compensation or 80% of the benefit to retirement age (plus one year)
  • Where the claim exceeds 52 weeks - eight years of compensation or 80% of the benefit to retirement age (plus one year)

This figure is a significant factor in the calculation of the workers compensation premium, which can double, triple or multiply by an even higher factor as a result. This increase will then be sustained for three policy years. It may well be that the anticipated increase in workers compensation premiums can make it unaffordable to terminate a staff member who is on workers compensation, regardless of any history of poor performance.

Capping of workers compensation premiums

In general, a workers compensation premium will be the total amount of wages multiplied by the WorkCover Industry Code rate (basic tariff) before being adjusted, taking into account the size of the business. In addition to this amount, the premium will also include an amount based on the cost of your claim, as set out above. However, there is some relief for smaller employers.

For example, where the basic tariff is under $10k or the wages are under $300k, the workers comp premium will be unaffected by any claims. Further, where the basic tariff is under $50k, the workers comp premium can increase by up to 1.5 times the basic tariff by reason of claims lodged by workers. Finally, where the basic tariff is greater than $50k, the premium can increase by up to two times the basic tariff because of lodged claims.

Swaab Attorneys was the highest ranking law firm and the 13th best place to work in Australia in the 2010 Business Review Weekly Best Places to Work Awards. The firm was a finalist in the 2010 BRW Client Choice Awards for client service and was named the winner in the 2009 Australasian Legal Business Employer of Choice Awards.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.