A recent decision of the Federal Magistrates Court of Australia has identified that protection from dismissal available to ill or injured employees provided by the Workplace Relations Act 1996 (Cth) (the Act) extends to when employees are not on ordinary sick leave but on workers compensation payments.
This law applies to all employees of a corporation (or other type of employer referred to in the Act) ie. whatever size of the entity or seniority of the employee.
Terminations of employment on specific grounds or for reasons that include any of the specified grounds including ‘temporary absence from work because of illness or injury within the meaning of the regulations’ are prohibited under section 659 of the Act. Effectively an employee is temporarily absent if they provide a medical certificate for an illness or injury:
- Within 24 hours of the absence.
- A justifiably longer period.
- If the employee is required to follow a certain procedure under an industrial award or agreement and complies with that procedure.
However, the prohibition does not apply if the absence is for more than three months or the total of absences within a 12 month period extend for more than three months unless the employee is on paid sick leave for the duration of the absence(s).
In Lee v Hills Before and After School Care Pty Ltd  FMCA 4 (15 January 2007) (Lee), Federal Magistrate Raphael considered whether an employee’s temporary absence while on workers compensation amounted to ‘paid leave’ within the meaning of the regulations. If it didn’t then the applicant was not temporarily absent at the time her employment ended and therefore the employer would not have infringed the prohibition.
The consideration in the case was whether workers compensation leave or absence from work because of a workers compensation claim, where traditional paid sick leave was not invoked, meant that the employee was not on paid sick leave as defined in the regulations. It could be argued that by not formally accessing paid sick leave an employee cannot therefore be on ‘paid sick leave’ and the prohibition does not apply. However, His Honour looked closely at the International Labour Convention No. 158 from which the temporary absent term derived and concluded that the reference to temporary absence was intended to cover circumstances of this kind. However the term ‘paid sick leave’ in the regulations is not a term that derives from the ILO Convention but from the Australian Parliament. Federal Magistrate Raphael concluded that if Parliament had intended to exclude those suffering from compensable industrial injuries from the benefit of the legislation it could have done so in clear terms. Accordingly, an employee on workers compensation benefits is effectively on ‘paid sick leave’ within the meaning of the regulations.
If an employee injures themself at home and accesses accrued paid sick leave in accordance with the regulations the employee is protected from dismissal under the legislation. If however, the employee did not injure themselves at home but at work ie. performing their duties and then accesses compensable payments under a workers compensation scheme why would that employee also not be protected under the temporary absence provisions in the legislation?
In any event, there are prohibitions in workers compensation legislation against dismissing employees for a set period of time after assessing or applying for workers compensation benefits. The decision in the Lee case effectively extends this prohibition for the period the employee is on workers compensation benefits irrespective of the ‘non-dismissal’ time period set out in State workers compensation legislation. It should be noted as determined in Nikolich v Goldman Sachs J B Were Services Pty Ltd  FCA 784 that if the employee is not on paid sick leave throughout the whole of the absence or absences then the prohibition does not apply. In that case Mr Nikolich was absent from work for more than three months immediately before the termination of his employment but was not on paid sick leave for the whole of the absence. During part of that time he was on annual leave; during another part, he was on leave without pay. The court concluded that he did not satisfy the temporary absence provisions in the Act.
A larger issue looming about the temporary absence provisions of the Act is the apparent absence of a limitation on temporary absence. It would appear that if an employee satisfies the requirements of the regulations in accessing paid sick leave, which now includes absence whilst receiving benefits under workers compensation legislation. Then there is a prohibition on termination of employment whatever the length of that absence. If the employee is receiving benefits under workers compensation legislation for several years or accesses several years of accrued paid sick leave, despite medical evidence that there is no prospect that the employee will return to work within the foreseeable future, an employer is prohibited from terminating the employment. This may yet be tested as the very term ‘temporary’ seems inconsistent with a period of absence from work for a period of years.
It is yet to be seen whether the decision in Lee will be appealed. A final judgement has not been delivered in the case as there are some remaining issues to be determined. Any appeal would be instituted within 21 days of the final judgement.
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