An ill or injured employee may be unable to attend work for a period of time, need to reduce their hours of work or responsibilities, or can no longer perform their tasks to the same standard as previously. This places employers in a very difficult position as employers can feel pressured to retain an ill or injured employee despite the employee being unable to return to their pre-illness/pre-injury position.

Terminating an employee can be difficult without these added complexities, however, provided certain obligations have been satisfied, employers are able to lawfully terminate an ill or injured employee. In such circumstances, it is incumbent on employers to exercise great care when terminating an ill or injured employee as there are significant risks associated with getting it wrong.


Length of absence from work

Pursuant to the Fair Work Act 2009 (Cth) (FWA) an employer must not dismiss an employee because the employee is temporarily absent from work due to an illness or injury. Temporary absence has been defined as a three-month period, either consecutively or a series of absences totalling three months over a twelve-month period.

However, requirements under each state and territory’s Workers Compensation Laws provide for additional time periods during which an employer is prohibited from terminating an employee. In NSW an employer cannot legally terminate an employee for a period of six months (or the length of any accident pay in the employee’s award or agreement) after the employee becomes unfit for work due to a work-related injury.

As such, the obligations placed on the employer differ depending on whether the illness or absence is work-related.


Valid reason for dismissal

When making the decision to terminate an ill or injured employee after the protected period of absence has passed, an employer must consider whether the employee, despite their injury, is able to perform the inherent requirements of their position presently and into the foreseeable future. This requires evidence from the employee’s treating medical practitioner, or from an independent medical examination.

An employer may consider termination if such evidence suggests that the employee:

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

Medical evidence

Employers considering terminating an ill or injured employee must ensure that supporting medical evidence provides the medical practitioner’s opinion as to whether the employee has the capacity to perform the inherent requirement of their pre-injury/pre-illness position. Employers must also ensure that such supporting medical evidence is current and available to be relied on.

Supporting medical evidence can be obtained, with the employee’s consent, from the employee’s treating medical practitioner. Alternatively, if the employer is reasonably satisfied that there is an existence of circumstances justifying the need for a medical examination, an employer may consider directing the employee to undergo an independent medical examination. However, in directing an employee to undergo a medical examination, employers will need to be satisfied that factors and circumstances exist which make such a direction lawful and reasonable.

It is incumbent on employers to provide the medical practitioner with the inherent requirements of the employee’s pre-illness/pre-injury position so that an informed assessment can be made. The supporting medical evidence should focus on the employee’s ability to undertake the inherent requirements of their pre-illness/pre-injury position and whether any reasonable adjustments or accommodations could be made to assist the ill or injured employee’s return to their pre-injury/pre-illness position.

Reasonable adjustments

The Disability Discrimination Act 1992 (Cth) (DDA) prohibits discrimination based on a mental or physical disability. As such, before making the decision to terminate an ill or injured employee, an employer should consider whether any reasonable adjustments or accommodations can be made to the employee’s role, or whether any accommodations can be made in the workplace to facilitate the employee’s continued employment in their role. This is an important consideration on the part of employers to mitigate the risk of a claim by the ill or injured employee that they have been discriminated against on the basis of disability.

The Courts have found that the requirements of the DDA make it necessary for the employer to make reasonable adjustments designed to facilitate the ill or injured employees return to their pre-illness/pre-injury position. Such reasonable adjustments may include offering the employee:

  • a varied version of pre-illness/pre-injury position, with a reduced number of tasks or alternative working arrangements; or
  • a different position that accommodates their injury, particularly in circumstances where the employer has allowed the ill or injured employee to remain long term in an alternative role.

Consultation

An employer considering termination of an ill or injured employee must still comply with their obligations under the FWA, including notifying the employee of the reasons for the consideration to terminate the employee, the medical evidence being relied upon, and providing the employee with an opportunity to respond.


Key Takeaways

  • Once the protected period has elapsed, an employer may consider terminating an employee if the employee is still unable to perform the inherent requirements of their pre-illness/pre-injury role, even with reasonable adjustments or modifications, and the employee is unlikely to be able to perform the inherent requirements of their role for the foreseeable future.
  • If an employee is terminated during the protected period because of their incapacity to perform their role, this may give rise to an unfair dismissal claim by an employee.
  • Before moving to termination, an employer should consider whether the employee can perform alternative productive work, even if it is different from the work the employee had performed pre-illness/pre-injury.
  • An employer’s failure to consider whether reasonable adjustments or accommodations can be made may give rise to a claim of disability discrimination.
  • Employers must obtain consent from the employee prior to consulting with the employee’s treating medical practitioner.
  • Where employees do not consent to the employer consulting with their treating medical practitioner employers may consider if they can lawfully and reasonably direct the employee to undergo an independent medical examination.
  • Employers must provide the medical practitioner with the details of the employee’s pre-illness/pre-injury duties and the inherent requirements of their position.
  • Employers must ensure they are complying with their obligations under the FWA when dismissing an ill or injured employee.

Ultimately, an employer can validly terminate an ill or injured employee, however, there are various considerations that must be had by the employer, both at present and into the foreseeable future.

Dismissing an ill or injured employee gives rise to a storm of legal obligations with the risks of getting it wrong including claims of unfair dismissal, adverse action, discrimination, and breach of privacy. An employer’s understanding of their rights and obligations when dealing with ill or injured employees is imperative to mitigating those risks. As such, employers should seek legal advice when they are considering whether to terminate an ill or injured employee so that employers are informed of the risks and can develop a comprehensive strategy that complies with the current legal requirements.