Most employers know a successful unfair dismissal claim can be
avoided if they have a valid reason for the dismissal and they can
prove they have followed a procedurally fair process.
But what process should an employer follow when it seeks to
dismiss an employee who has been absent from work because of
prolonged illness or injury?
Termination of employment due to an employee's illness or
incapacity can be a very difficult area, particularly as an
employee in this circumstance may be protected by unfair dismissal
legislation, workers compensation laws, anti-discrimination laws,
or disability discrimination laws.
Under the Fair Work Act an employee is protected from
dismissal when temporarily absent due to illness or injury unless
the employee's absence on unpaid personal/carer's leave
extends for more than 3 months, or total absences of 3 months
within a 12 month period.
Many State and Territory workers compensation laws also prohibit
the termination of an employee's employment by the employer
within a specified period of time where the sole or primary reason
for the dismissal is because of the employee's absence on
workers compensation. The 'specified period' can range from
6 months (under NSW law), to 12 months (under Queensland law), or
indefinitely (under South Australian law where the employer employs
10 or more employees).
Alternatively, an employee who is dismissed because of illness
or incapacity may make a claim under relevant disability
Where the illness or incapacity is not connected to employment
and therefore not covered by workers compensation, the employer is
entitled to terminate employment on the ground that there is a
valid reason related to the employee's capacity.
WHAT IS A VALID REASON FOR TERMINATION?
An employee's employment may be validly terminated on the
basis of the employee's illness or incapacity when it can be
demonstrated that this has an adverse impact on the employee's
ability to perform the inherent requirements of their job. In
making decisions around this an employer may be required to show
that they made reasonable adjustments to the role.
However if the employee can demonstrate they are able to perform
the duties and responsibilities of their job, even after a period
of absence from work, a termination of employment will be
considered harsh and unreasonable (Cooper v Balfours Bakery Pty
Employers must also be conscious of their OHS obligations to
employees who have been on long-term absence because of illness.
Whilst an employer is entitled to a reasonable amount of
information which will enable it to ensure that the employee is
capable of returning to work, it must ensure that any direction to
the employee to provide the relevant medical information is a
reasonable and lawful direction.
In a recent FWA case, Chetcuti v Coles Group Supply Chain
Pty Ltd, an injured NSW worker was terminated after he stopped
providing medical information to his employer. Although the
employee had given his employer a signed consent form for his
doctor to disclose medical information to his employer, he had not
personally provided his employer with any medical information.
The employer terminated the employee for misconduct for not
complying with its directions to supply it with information.
However FWA found that the employee was not guilty of any
misconduct as he had supplied his employer with a consent form
allowing it to obtain the information directly from his doctor.
As such FWA found the termination was harsh, unjust and
unreasonable and the worker was reinstated.
It is recommended that an employer have solid evidence of the
employee's incapacity to work (such as independent medical
assessments) as a basis for any decision making around injured and
It is also advisable to consult with the employee, particularly
a long-serving employee, about the situation, and examine the
feasibility of transferring the employee to a job that is less
physically demanding, or modifying the existing job.
When in doubt, seek expert legal and/or medical advice before
making a decision, as cases involving injury or incapacity are
often costly and lengthy.
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.
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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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