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The Fair Work Act 2009 (Cth) (FWA) prohibits an employee’s termination for certain reasons. One of these includes if an employee has had a temporary absence from work due to illness or injury. Terminating an employee who has been absent from work due to a prolonged illness or injury is complex. As an employer, it is important to be aware of the protections that exist for employees. There are risks when it comes to terminating an employee due to prolonged illness or injury. This article will explain whether you can terminate an employee due to illness.

Can I Terminate an Employee Due to Illness?

You cannot dismiss an employee if an employee is temporarily absent from work due to an illness or injury.

A ‘temporary absence’ includes an absence where the employee is away for three months or less. This can include a combination of paid and unpaid personal leave.

However, suppose your employee has used all of their accumulated personal leave and has been on unpaid leave for more than three consecutive months or more than three months over 12 months. In that case, an absence will no longer be considered ‘temporary’. 

An ‘illness or injury’ exists if the employee provides a: 

Disability Discrimination

Importantly, you should exercise caution in terminating employment due to a disability. You must not discriminate against an employee by terminating their employment because of a physical or mental disability. The word ‘disability’ includes any physical or mental weakness or incapacity. This can include a condition which limits a person’s movements, activities or senses.

Further, the Disability Discrimination Act 1992 (Cth) (DDA) prohibits discrimination on the basis of a mental or physical disability. The DDA makes it unlawful to dismiss an employee on the grounds of their disability. Employers can also be found to have discriminated against an employee if they fail to make reasonable adjustments to accommodate the employee’s disability.

Workers Compensation Laws

State and territory workers compensation legislation can also prohibit an employer from terminating an employee within a specific period of time from when an employee suffers a workplace injury. For example, in NSW, it is an offence to dismiss an injured employee within six months of incapacity. 

Seek Advice

In light of the above, it is crucial to seek advice to confirm whether you are in a position to terminate an employee due to illness or injury. Furthermore, even if the termination is valid, it is important to ensure that a procedurally fair and equitable process is followed in order to mitigate any likelihood of a claim.

The Inherent Requirements of the Role

If your employee is unable to perform the inherent requirements of their role, you may be protected from an adverse action claim. It is not discrimination if the action taken relates to the requirements of the job because of the particular position concerned.

The concept of inherent requirements of a job will vary depending on the job. They may include:

  • the ability to perform the necessary functions of the position;
  • productivity and quality requirements of the position;
  • the ability to effectively work as part of a team or the organisation; and
  • the ability to work safely and adhere to Occupational Health and Safety policies and legislation.

This means that you will generally not be in breach of the Fair Work Act if you dismiss an employee who has been absent with a long-term illness or injury if:

  • they are no longer able to fulfil the requirements of their position; and
  • you have considered whether adjustments to their job could be made which would allow them to work.

You should always confirm with any treating health professional of your employee that they are no longer able to fulfil the requirements of the position.

Can You Make Reasonable Adjustments to Accomodate Their Illness?

To lawfully terminate an employee for longer-term absence due to illness or injury, you must have attempted to provide your employee with reasonable adjustments to help them perform the job.

Reasonable adjustments include:

  • the possibility of offering an employee a different position that accommodates their injury; or
  • a varied version of the same position with a reduced amount of tasks or different working arrangements, such as work from home.

If reasonable adjustments would not assist your employee in performing their duties OR making such adjustments would cause justifiable hardship on your business, you may be able to lawfully terminate the employee’s employment.

Key Takeaways

Terminating employees who are away on lengthy absences due to illness or injury is risky. Having an employee be absent for a period beyond a “temporary absence” alone will not provide a defence to an adverse action claim. Employers considering such action should be mindful of their obligations. It is recommended that employers complete the following prior to terminating an employee’s employment:

  • keep in contact with the employee during their absence;
  • always obtain medical certificates and if required, liaise directly with the health professional to obtain their view of what the employee can and cannot do as part of their role;
  • keep written records of the employee’s absences and any correspondence with the employee regarding his or her illness or injury;
  • always provide procedural fairness; and
  • seek legal advice to confirm that the correct steps have been followed.

If you are unsure whether your employee will still be able to perform their inherent duties, or you want to know whether you should provide adjustments, get in touch with LegalVision’s employment lawyers today by calling 1300 544 755, or fill out the form on this page.

Frequently Asked Questions

Can I terminate an employee if they are temporarily absent?

The Fair Work Act states that an employer cannot dismiss an employee if an employee is temporarily absent from work due to an illness or injury. A ‘temporary absence’ includes an absence where the employee is away for three months or less. This can include a combination of paid and unpaid personal leave.

Can I terminate my employee due to their disability? 

You should exercise caution in terminating employment due to a disability. The Fair Work Act states that an employer must not discriminate against an employee by terminating their employment because of a physical or mental disability.

What is a reasonable adjustment to work if an employee has an injury?

Reasonable adjustments include, for example, the possibility of offering an employee a different position that accommodates their injury. They also include a varied version of the same position with a reduced amount of tasks or different working arrangements, such as work from home.

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