Australia: Managing Injured Workers Part Two - Reviewing The Employment

Last Updated: 9 October 2009
Article by Rick Catanzariti

When does an employee's absence from work, or their continued inability to perform their fulltime pre-injury duties, reach a point where an employer can consider ending the employment?

What length of time is necessary ?

There is no minimum period of absence or inability to perform the pre-injury job that must have elapsed before an employer can consider termination of the employment.

Where the illness or absence is work related, in many cases, workers' compensation legislation provides an obligation on an employer to find suitable employment for the employee for a certain period of time. This period is typically up to 12 months.

If the employee is dismissed because of their incapacity during that protected period, it may expose the employer to a successful unfair dismissal claim by the employee. It is therefore prudent for employers not to dismiss an employee in that protected period for incapacity if the incapacity is work related.

Where the incapacity is due to a non work related illness or injury that protected period will not apply. However, it is unlawful to terminate an employee if they are temporarily absent from work. Temporary absence is a three month period, either consecutively or a series of absences totalling three months over a 12 month period. An employee is also temporarily absent if they are absent on paid sick leave, even if the paid sick leave period extends beyond three months (workers' compensation absence will not be regarded as sick leave). Therefore, if an employer dismisses an employee for incapacity during a period of temporary absence, there is a risk of an unlawful termination claim.

Apart from a protected period for work related absences and temporary absences, there is no minimum or ideal period of time when an employer is able to consider dismissing an employee for incapacity. Employers should avoid hard and fast rules to determine when they can act.

When can dismissal be considered?

After any protected periods for work related absences or temporary absence has elapsed, employers can consider dismissal if:

  • the employee still cannot perform the inherent requirements of their pre-injury or pre-illness position, even with reasonable modification to the duties or with reasonable assistance; and
  • the employee is unlikely to be able to perform the inherent requirements of those pre-injury or pre-illness duties for the foreseeable future.

An employer needs to consider the extent to which the employee is incapable of performing the pre-injury role as well as whether the employee's medical condition has stabilised, is improving or deteriorating. This will determine whether a decision needs to be made, explored or delayed.

An employer needs to have sufficient medical evidence to assist in determining the above matters.

Where the above factors suggest the employee cannot perform the inherent requirements of the position currently and into the foreseeable future, an employer will also need to consider whether or not there are any other productive duties that the employee may be able to perform that are consistent with their medical restrictions.

Modified Duties

Consideration of alternative duties will be particularly important where the employee is performing modified duties and/or hours. If the duties they are performing are productive, it may still be unfair to dismiss them even if they cannot perform the inherent requirements of the position. In addition, the employee may be medically capable of performing productive duties elsewhere in the organisation. In addition, care needs to be taken that an employee's modified duties have not become their 'new position' as then their level of incapacity may be assessed by a court or tribunal against the modified duties rather than the pre-injury duties. Employers need to ensure that the documents and other discussions surrounding the initial and ongoing offer of modified duties do not create a suggestion that the modified duties will be, or have been, accepted permanently in substitution for the pre-injury duties. Employers should also carefully consider how long modified duties are offered to avoid suggestions they have become permanent or that it is seemingly not a burden for the employer to continue offering the modified duties given that it has been able to offer them for so long.

Frequent absences

Where an employee is absent frequently but otherwise able to perform their normal duties, the situation is usually more complex. In that situation, the employee is not unable to perform their normal or pre-injury duties all the time, only some of the time.

In those situations it may be more difficult to establish that an employer has a valid reason to dismiss the employee due to incapacity, depending upon the frequency of the absences and the reason.

In these situations, employees should obtain medical evidence which is directed at the nature of the medical condition, how it impacts upon the pre-injury duties, whether modifications to the employment can be made to alleviate the effects of the medical condition and whether the situation is likely to continue into the future and, if so, for how long. All of these factors will be relevant in making an assessment about whether an employer has a valid reason to dismiss the employee in this circumstance.

The medical evidence

Employers need to carefully weigh up whether an independent medical opinion should be obtained to consider a decision about an employee's incapacity and ongoing employment, or whether it can be obtained from the employee's treating doctors. Sick leave certificates, workers' compensation certificates, or even information obtained through a workers' compensation claim may be limited in how it addresses the necessary factors, particularly prognosis (and employers should also be wary of using information obtained through a workers' compensation claim due to restrictions on its use in some workers' compensation legislation). Reliance on these alone is not recommended.

In some cases, obtaining information from the employee's treating general practitioner or specialist may provide sufficient information for the employer to make an informed decision about the employee's ongoing employment without the need for an independent medical examination. The employee's consent to obtaining that information ought to be requested. Where that consent is refused, an independent medical examination may be a necessary step. Whenever a medical opinion is sought, it must be directed at the inherent requirements of the position and the employee's ability to undertake those, both at the current time and into the future. A written medical opinion, in response to prepared and focussed questions, is highly recommended.

An overriding consideration is ensuring that the medical evidence available to, and relied upon by, the employer is current. Medical information which is out of date may be insufficient to support a decision made by an employer to, for example, dismiss the employee.


If dismissal is being considered by the employer, before any decision is made, the employee needs to be given an opportunity to comment on the possible decision. This should normally involve a meeting with the employee where the employer discusses the reasons for the possibility of the employment ending, the medical evidence being relied upon and giving an employee the opportunity to comment. Only after the employee is given that opportunity should the employer make a decision about the employee's ongoing employment.

As is usually the case when considering dismissing an employee, issues such as giving the employee an opportunity to be represented, informing them in advance of the purpose of the meeting and considering a range of circumstances including the employee's length of service, should all be taken into account prior to any decision.

© DLA Phillips Fox

DLA Phillips Fox is one of the largest legal firms in Australasia and a member of DLA Piper Group, an alliance of independent legal practices. It is a separate and distinct legal entity. For more information visit

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances.

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