When is it okay to terminate someone’s employment if they can’t work because of an illness or injury? It’s the question that keeps a lot of employers up at night, and a challenging scenario for any workplace to manage.
Every employer has ill or injured employees in their workforce at some point. And when an employee does become ill or injured, there are a number of overlapping legal protections that apply to them. If fact, this is one of the most highly protected areas of employment law.
Rather than waiting for the worst to happen, it’s important to understand how this area works so you can effectively manage ill and injured employees while minimising your exposure to legal risk.
Let’s break down the basics:
The first three months
The Fair Work Act makes it unlawful to dismiss an employee because they are temporarily absent from work because of an illness or injury until they have been away for at least three months. This could either be one three-month period, or three months in total over a 12-month period (which could be for separate illnesses or injuries).
There is an exception where an employee has been on paid personal/carer’s leave for the entire absence. If this is the case, they can’t be dismissed until they have exhausted their paid personal/carer’s leave. The employee also needs to have provided the required evidence of their illness or injury.
After three months
Once the three months is up, you can’t just terminate. There are still other claims an employee can bring if they are dismissed because of their illness or injury. For example, the employee could:
- bring an unfair dismissal claim if they come within the jurisdiction
- bring a general protections claim asserting that adverse action (dismissal) was taken against them because of a physical or mental disability
- allege that they have been unlawfully discriminated against.
If you do want to terminate after three months, this is definitely the time to get legal advice.
You’ll usually need to establish that the person is no longer capable of performing the inherent requirements of their role, taking into account reasonable adjustments that could be made that would enable them to do so.
This would need to be established by medical evidence, and often by having the employee undergo an independent medical examination. You would ask a qualified medical examiner to answer particular questions to establish whether there is a medical basis for termination.
You usually also need to ensure that a fair process is followed before the termination. Show cause letters are often used in these situations.
Workers compensation
Each state and territory has its own workers compensation scheme, so make sure to take into consideration the specific rules of the employee’s state or territory.
For instance, in NSW it is an offence to dismiss a worker because of a work-related injury within six months from when they first became unfit to work. In Queensland it’s unlawful to dismiss a worker within 12 months of them sustaining an injury solely or mainly because the worker is not fit for employment because of the injury. Check your state or territory’s workers compensation rules for more information.
Other reasons
Keep in mind that none of the above prevents you from terminating someone’s employment for other reasons while they are absent because of illness or injury. For example, it is still possible to make a position redundant. However, you need to ensure that there is a clear business reason for the redundancy that is not related to the employee’s illness or injury.
Want to know more?
Managing ill and injured employees can be a complex area of employment law to navigate. For more insights, watch our free three-part webinar series, where Source experts take you through the tools and strategies every business needs for managing ill and injured employees.
Need help ensuring you comply with employment laws? With Source, you gain access to an in-house style legal team that supports you with the day-to-day legal needs – all within a fixed monthly retainer. Reach out today to learn more.