Employers seeking to terminate an employee on Workers'
Compensation within the probationary period should take note of a
recent decision of Fair Work Australia which clarifies how an
employee's period of continuous service is calculated, and
highlights the legal obstacles involved in terminating their
How frustrating is it when an employee starts with you and
within the space of a month is on workers compensation? It can be
very difficult not to let that tarnish your view of the employee.
What can be even more frustrating is if the employee remains on
workers compensation for much of the minimum employment period
(i.e. probation period) and you do not get the opportunity to
properly access their performance. To complicate things even
further if someone is on workers compensation there are a range of
legal obstacles to terminating their employment.
The case of WorkPac Pty Ltd v M Bambach  FWAFB
3206 reflects the above situation. Bambach ('the
Respondent') was engaged by WorkPac ('the Appellant')
as a casual employee from 7 March 2010. On 1 June 2010, the
Respondent was injured at work and was subsequently on Workers'
Compensation until 23 September 2011, where the Respondent was
certified to resume his pre-injury duties (and advised the
Appellant of this).
On 17 October 2011, the Respondent received an Employment
Separation Certificate, stating that his employment had ceased on
24 September 2011 due to his 'unsuitability for this type of
work'. The Respondent subsequently lodged an unfair dismissal
claim with FWA.
At first instance, FWA rejected the argument that the Respondent
had only completed 2.5 months of continuous service (and was
therefore not protected from unfair dismissal). This decision was
appealed to the FWA Full Bench, and subsequently upheld.
The Bench held that absences whilst on Workers' Compensation
do not break an employee's continuous period of service,
because Workers' Compensation payments are pursuant to a legal
obligation imposed on employers. Consequently an employee cannot be
considered as taking an 'unpaid authorised absence'.
Furthermore, note that the Workers' Compensation
Act provides injured workers with protection against the
termination of their employment within 6 months of injury.
What does this mean for employers?
An employer's ability to terminate an unsuitable employee
has been significantly reduced. There is no guaranteed way of
avoiding this situation however here are some steps you can
Arrange a pre-employment examination for the employee;
Ensure you thoroughly reference-check the employee; and
Be cautious of employing any candidate with a pre-existing
Employers should therefore take extreme caution and seek
professional advice to gain clarity as to whether an employee is
protected under unfair dismissal laws.
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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