The Federal Circuit Court has dispelled any lingering doubts as
whether or not employers can safely terminate employment following
a lengthy absence from work, and without potentially facing
discrimination claims arising from the termination.
This issue arose in the context of termination of an absent
employee, a Mr McGarva, who had been seriously ill for some time
with the diagnosis of grade 4 stomach and liver cancer. The
employee kept his employer informed as to his illness and his
progress. Having been absent from work for around 10 months (the
latter part on unpaid leave), Mr McGarva indicated by email, that
he was looking to return to work 2 to 4 weeks later.
His employer Enghouse Australia Pty Ltd, responded by serving
him with a letter of termination. The termination letter gave as a
key reason for termination, Mr McGarva's "extended
leave of absence".
Mr McGarva brought an "adverse action claim"
underpinned by the proposition that the termination was due to the
employee's physical disability.
Judge Driver of the Federal Circuit Court of Australia
determined that a threshold issue needed to be determined before
further proceeding with the adverse action claim. That threshold
issue concerned the relationship between Section 352 of the Fair
Work Act and Section 342(3)(a) of the Act.
Section 352 of the Act essentially prohibits an employer from
dismissing an employee because they are temporarily absent from
work due to illness or injury (of the kind prescribed by the
Regulations). Loosely stated, under the Regulations an illness or
injury may not (depending on the circumstances) be prescribed, if
it extends for more than 3 months. In this case, the period of
absence was around 10 months.
Section 342(3)(a) of the Act essentially excludes from the
meaning of "adverse action" any action which is
"authorised by or under the Act".
It might be observed that section 351 of the Act addresses the
bringing of an adverse action claim based on discrimination.
The question for determination by Judge Driver was, whether
because at the time of the dismissal the employer was not
prohibited from dismissing the employee under Section 352 of the
Act, such action was authorised by or under the Act and as such was
excluded from grounding any adverse action claim.
Judge Driver determined that the mere fact that an action (in
this case dismissal) might be authorised under Section 352 of the
Act and Regulations, does not carry any implication in relation to
bringing an adverse action claim under Section 351 of the Act. A
dismissal may be authorised due to a period of absence but it may
also still constitute an unlawful dismissal under the Commonwealth
or State anti discrimination legislation.
This initial point having been dealt with the matter was then
referred for mediation which if unsuccessful would result in the
matter progressing to a final hearing.
Implications for employers
The above case highlights to employers that the mere fact that
more than 3 months may have elapsed since an employee left their
employment due to illness (and the Regulation otherwise satisfied),
is not going to deprive a terminated employee from being able to
bring an adverse action claim in relation to discrimination arising
from the termination. At best, all that an employer may achieve by
waiting the required period of time (and otherwise satisfying the
Regulations) is to avoid a dedicated adverse action claim being
brought for termination during a temporary absence due to illness
Employers should therefore tread carefully in making any
decisions around termination of ill or injured employees and be
completely satisfied that they have followed appropriate processes
and procedures which establish the nature of the illness or injury,
its diagnosis and prognosis and the circumstances of if, when and
on what basis, that employee might be able to return to work. In
particular whether the employee will be able to fulfil the inherent
requirements of the position if they return to work.
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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