How to Manage and Dismiss an Employee with a Physical Injury

In Short

• Employers must navigate employees’ legal entitlements when managing workers with physical injuries.

• Dismissing an employee due to injury can expose businesses to legal risks, including unfair dismissal claims.

• Ensure compliance with sick leave laws and provide fair adjustments to mitigate potential legal consequences.

Tips for Businesses

When managing employees with physical injuries, ensure compliance with the Fair Work Act by providing clear documentation of sick leave entitlements. Maintain open communication with injured employees and regularly assess their ability to perform their roles. Ensure that any dismissal process is carried out fairly to avoid legal repercussions.

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Table of Contents

• How Much Paid Sick Leave is the Employee Entitled To?
• Can I Dismiss an Employee for Taking Sick Leave?
• What are the Risks of Dismissing an Employee for Taking Sick Leave After Three Months?
• Key Takeaways
• Frequently Asked Questions

As a business owner, you will probably need to manage an employee with a physical illness or injury at some point. While handling these situations, you will need to navigate the employee’s legal entitlements and consider the risks of dismissing an injured employee. You should ultimately seek an outcome that: 

• is beneficial for you and the employee; and
• avoids the potential for the employee to make a legal claim.

This article explains:

• employees’ entitlements; 
• the legal risks associated with dismissing an injured employee; and 
• how to mitigate those risks.

How Much Paid Sick Leave is the Employee Entitled To?

Under the Fair Work Act 2009 (Cth) (the Act), a full-time permanent employee can take ten days of paid sick and carer’s leave for each year of service.

An employee may take paid sick or carer’s leave:

• if they are not fit for work because of sickness or an injury; or
• to provide care to a member of their immediate family or household.

Sick leave accrues progressively throughout the year. This means that your employees need to work a certain number of days to be entitled to this form of leave. 

However, sick and carer’s leave will not accrue over periods where a worker takes unpaid leave. This is except for:

• community service leave; or
• any contradictory provision in an award or agreement.

Sick leave also accumulates from year-to-year, so employees can build their balance of leave over time.

Employers can be uncomfortable with employees accruing significant sick leave, as it may pose a financial risk to your business. To control against employees’ dishonest behaviour, you can require that they provide you with evidence that:

• they are sick: or
• they must provide care to a family or household member.

Importantly, paid sick leave does not apply for any period covered by workers compensation.

Who is Entitled to Sick Leave?

Part-time employees are entitled to sick leave in proportion to the number of hours they work in a full work week. 

Casual employees are not entitled to paid sick leave, unless they are engaged on an ongoing and systematic basis, with an ongoing expectation of work. However, the casual nature of their employment allows them to refuse to work a shift, including due to sickness.

Can I Dismiss an Employee for Taking Sick Leave?

Absences of Less Than Three Months

You cannot dismiss an employee merely because they are temporarily absent from work due to an illness or injury, where the:

• employee has provided a medical certificate for the illness or injury within a reasonable timeframe; and
• employee’s absence extends for less than three months or their absences over a twelve month period total less than three months.

Absences of More Than Three Months

You may be able to dismiss an employee if they are temporarily absent from work because of illness or injury where:

• the employee’s absence extends for more than three months or their absences over a 12 month period total more than three months; and
• the employee is not on paid sick leave for the duration of this absence.

However, you may be subject to certain risks, and as such legal advice should always be sought.

What are the Risks of Dismissing an Employee for Taking Sick Leave After Three Months?

Although the law does not prohibit you from dismissing an employee for absences of more than three months, you may still be at risk of a claim under the FairWork Act’s:

• general protections provisions; or
• unfair dismissal provisions;

You may also face a claim made under other State, territory and federal anti-discrimination legislation. These claims may cause your business financial harm or damage your reputation.

1. General Protections Claim

An employee may lodge a general protections claim if you take adverse action against them because they exercised a workplace right. This type of claim is broad and intends to secure employees rights, for instance:

• protection from discrimination (for example, on the basis of a disability);
• joining a union; and
• taking sick leave.

Therefore, you cannot dismiss an employee merely because the employee took sick leave.

You also cannot take adverse action against an employee, including dismissing them because of a physical disability. 

If an employee brings a general protections claim against you under the Act, you must demonstrate that you dismissed the employee solely because they were no longer able to perform the inherent requirements of the role. 

2. Unfair Dismissal Claim

Similarly, you may only dismiss an employee if you:

• have a valid reason; and
• provided procedural fairness to the employee.

Ensuring procedural fairness to the employee requires you to be equitable and unbiased, such as allowing the employee to explain themselves.

You likely cannot dismiss an employee just because of their sickness or injury. This means you will need to consider other ways they are failing to uphold their workplace duties. To ensure procedural fairness, you should also maintain communication with the employee throughout their absence. 

3. State, Territory and Federal Anti-Discrimination Legislation

You should also be aware of specific State, territory and federal anti-discrimination laws. State, territory and federal legislation prohibits an employer from discriminating against an employee. 

You must also consider reasonable adjustments that would allow the employee to meet these requirements. However, you will not be required to undertake these adjustments if they would impose an unjustifiable burden.

Key Takeaways

You should ensure that you understand your employee’s leave entitlements so that you treat them fairly and avoid breaching the Act. You cannot dismiss an employee if they are absent for less than three months. Even after this three month period, you may be at risk of the employee bringing a claim for unfair dismissal or discrimination.

If you would like legal advice concerning the removal of an employee with a physical injury, our experienced employment lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 1300 544 755 or visit our membership page. 

Frequently Asked Questions

Can I dismiss an employee for taking sick leave?

You cannot dismiss an employee simply for taking sick leave if their absence is less than three months. After three months, dismissal may be possible but could lead to risks, including claims under general protections, unfair dismissal, or anti-discrimination laws.

What sick leave entitlements do employees have?

Full-time employees are entitled to ten days of paid sick leave each year. Part-time employees are entitled to proportional leave based on the hours worked.