When a staff member is sick or injured for an extended period employers must balance compassion and compliance.
There may come a point where the employer’s operational requirements require a role to be fulfilled.
Below we outline key risks for dismissals where an employee is absent due to illness or injury, and how to manage them.
Determining Fitness for Work
One of the first challenges is figuring out if and when an absent employee can safely return, especially if medical information is limited. Employers are entitled to seek sufficient medical evidence about an employee’s fitness for work, both to plan operationally and to meet workplace safety duties.
Repeated generic medical certificates (e.g. “unfit for work due to medical condition”) will not be enough when you have a pressing need to know the employee’s capacity.
In such cases, it’s lawful and reasonable to request additional medical details about the employee’s limitations and prognosis. For example, you might ask the employee to provide a more detailed letter from their GP clarifying the nature of any work restrictions and likely timeframe for recovery.
If the information provided remains inadequate or conflicts with workplace safety, you can direct the employee to attend an independent medical examination (IME). This is a lawful and reasonable direction.
The purpose of an IME should be to get clear, impartial insight into what duties the employee can or cannot perform, ideally helping both parties plan a safe return to work if possible.
An IME can also provide a lawful basis for dismissal if it demonstrates the employee cannot perform the inherent requirements of the role – but employers still need to navigate the risks outlined below.
The “three month” rule
Regardless of the medical information about an employee, the Fair Work Act prohibits the dismissal of an employee because of absence due to illness or injury, unless that absence is at least 3 months in a 12-month period. Critically, the three months must not include any paid sick leave.
For example, if an employee uses up 1 month of paid sick leave the employer must wait for another 3 months of absence due to illness/injury before the prohibition on dismissal no longer applies.
This does not mean there is a green light for dismissal after three months of unpaid sick leave. An employee can still make an unfair dismissal, general protections or discrimination claim. It just means the outright prohibition on dismissal no longer applies.
There are civil penalties that apply to a contravention of this section of the Fair Work Act.
There are different rules for work related injuries under workers’ compensation laws. For example, in Queensland employers are prohibited from dismissing an employee because of a work-related injury for 12 months. The time limits vary State by State.
Legal Claims to Watch Out For
Once employers are over the hurdle of the three-month rule, they still need to tread carefully before dismissing a sick or injured employee.
1. Discrimination law
Federal and State/Territory anti-discrimination laws require employers to make reasonable adjustments to accommodate an employee’s illness or injury to assist them with their return to work.
What is reasonable will always depend on the circumstances of the injury/illness and the role. It does not mean an employer has to create a new role for an employee. However, it may require the temporary reallocation of some duties elsewhere to allow the employee to recover.
If an employer does not make reasonable adjustments or dismisses an employee because of their illness or injury (or how it manifests), an employee can make a discrimination claim alleging they have been treated unfavourably because of that injury/illness.
To defend that claim, an employer must be able to demonstrate it could not make reasonable adjustments to accommodate the illness or injury and that the employee was incapable of performing the inherent requirements of their role.
Damages are uncapped and will depend on the extent of the employee’s economic loss. They can also make a general damages claim alleging hurt, humiliation and distress.
2. General Protections (Adverse Action)
The Fair Work Act prohibits an employer from taking adverse action (including dismissal) against an employee because of a protected attribute (such as impairment) or a workplace right (e.g. taking personal leave).
Employers need to tread a fine line when dismissing an employee due to absences or an inability to perform a role to navigate the general protections risk.
An employer can dismiss an employee for an inability to perform the inherent requirements of their role (an operational matter) as opposed to dismissing them because of their illness or injury (a protected matter). The onus is on the employer to demonstrate the employee cannot not perform their role. This usually requires medical evidence (which is where an IME may be required) or reasonable efforts by the employer to obtain that evidence which are hindered by the employee.
Employers often come unstuck where there is evidence that it is the injury/illness itself or the employee’s absence on paid sick leave that forms part of the reasoning for dismissal.
Damages are uncapped in general protections claims, and like a discrimination claim will depend on the extent of the employee’s economic loss. The employee can also make a general damages claim and claim penalties for contravention of the Fair Work Act.
3. Unfair dismissal
If an employee is dismissed due to an illness or injury they can also make an unfair dismissal claim if they are eligible to do so, as an alternative to a general protections or discrimination claim.
This is a more informal path for an employee but their compensation is limited to 6 months’ pay.
Steps to take
Managing employees who are sick or injured takes careful planning and care to navigate the risks outlined above.
Employers mut be aware of the three month rule, consider reasonable adjustments to assist the employee’s return to work, and then ensure they have adequate information to demonstrate the employee cannot perform the inherent requirements of the role.
Batch Mewing Lawyers’ employment & safety law team assists employers with managing sick and injured employees. Please contact us if you require any assistance.
