Reading time: 7 minutes

Under the Fair Work Act (FWA), there are several reasons why you cannot terminate an employee. One of these reasons includes employees who take a temporary absence from work due to illness or injury. Terminating an employee who has been absent from work due to illness or injury can be a complex issue. As an employer, it is important to be aware of the protections for employees given the risks when terminating an employee for prolonged illness or injury. This article will explain whether you can terminate an employee due to illness and break down your obligations as an employer should you wish to do so.

The Ultimate Guide to Hiring & Retaining Employees

Whether it’s your first hire or your fiftieth, this guide will help you understand the moving parts behind building a high-performing team.

Download Now

Can I Terminate an Employee Due to Illness?

The FWA contains ‘general protections’ which aim to protect employees from adverse action against them because of a prescribed reason.

Furthermore, under the FWAan employer cannot take adverse action (such as dismissal) against an employee if they are temporarily absent from work due to an illness or injury. A ‘temporary absence’ includes an absence where your employee is away for three months or less. This absence might include a combination of paid and unpaid personal leave entitlements. On the other hand, an ‘illness or injury exists if the employee provides a medical certificate; or statutory declaration. However, they must do so within 24 hours after the commencement of the absence. Alternatively, they may do so within a more extended period that is reasonable given the circumstances.

In cases where your employee is absent from work for longer than three months, you should still be careful in terminating their employment. You still risk facing an unfair dismissal or discrimination claim, mainly if the dismissal is proximate to the leave. 

Disability Discrimination

Moreover, the Fair Work Act also provides protection for employees from discrimination.

The Act states that an employer must not take adverse action (such as dismissal) against an employee because of their 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.

Likewise, the Disability Discrimination Act prohibits discrimination against an employee’s mental or physical disability. Further, the Act makes it unlawful to dismiss an employee on the grounds of their disability. Employers might also be discriminating against an employee if they fail to make reasonable adjustments to accommodate the employee’s disability.

Workers Compensation Laws

Worker’s compensation laws in Australian states and territories also prohibit employers from terminating an employee within a specific period when an employee suffers a workplace injury. For example, in NSW, dismissing an employee with an injury within six months of incapacity is an offence. If you are unsure whether worker’s compensation law prohibits you from terminating an employee after suffering a workplace injury, it would be wise to seek legal advice. 

Seek Advice

In any event, 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 you follow a procedurally fair and equitable process. Doing so will help to mitigate any likelihood of a claim against you.

The Inherent Requirements of the Role

If your employee cannot perform the inherent requirements of their role, you may be able to terminate their employment without facing an adverse action claim. Ultimately, it is not discrimination if the termination of an employee relates to their job requirements. In particular, if your employee cannot fulfil the requirements of a specific position.

The idea of inherent requirements of a job will vary depending on the job. Some requirements 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 first consider whether you can make adjustments to their job to allow them to work.

In saying that, you should always confirm with any treating health professional of your employee that they can no longer fulfil the requirements of the position.

Can You Make Reasonable Adjustments to Accommodate Their Illness?

To lawfully terminate an employee for long-term absence due to illness or injury, you must first attempt to provide your employee with reasonable adjustments to aid their performance.

Reasonable adjustments include:

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

Suppose reasonable adjustments would not assist your employee in performing their duties, or making such adjustments would cause justifiable hardship to your business. In that case, you may be able to lawfully terminate the employee.

Flexible Work Arrangement

Additionally, upon your employee’s return from long-term sick leave, they may request a flexible working arrangement. Your employees may request a flexible working arrangement if they have worked for your business for more than 12 months. Depending on the specific needs of your employee, they may request a change to their:

  • work hours;
  • patterns of work such as a job-sharing arrangement; and
  • location of work, such as working from home. 

As an employer, you should be open to discussing what arrangements will suit both your employee’s and business’ needs. 

In saying that, you must respond to your employee’s request for a flexible working arrangement in writing within 21 days of receiving the request. You should state whether you accept or refuse their request in your response. If you refuse a request for a flexible work arrangement, you must do so on reasonable business grounds. These grounds range from the cost of the arrangement would be too onerous to the request is likely to result in loss of productivity or harm the business.

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. However, employers considering such action should be mindful of their obligations. As an employer, you should complete the following before terminating an employee’s employment:

  • keep in contact with the employee during their absence;
  • always obtain medical certificates and if need be, 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 you are following the correct steps.

If you are unsure about managing a termination, 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 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.

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. It may also include an alternate version of the same position with a reduced amount of tasks or different working arrangements, such as working from home.


New Kid on the Blockchain: Understanding the Proposed Laws for Crypto, NFT and Blockchain Projects

Wednesday 25 May | 10:00 - 10:45am

If you operate in the crypto space, ensure you understand the Federal Government’s proposed licensing and regulation changes. Register today for our free webinar.
Register Now

How to Expand Your Business Into a Franchise

Thursday 26 May | 11:00 - 11:45am

Drive rapid growth in your business by turning it into a franchise. To learn how, join our free webinar. Register today.
Register Now

Day in Court: What Happens When Your Business Goes to Court

Thursday 2 June | 11:00 - 11:45am

If your business is going to court, then you need to understand the process. Our free webinar will explain.
Register Now

How to Manage a Construction Dispute

Thursday 9 June | 11:00 - 11:45am

Protect your construction firm from disputes. To understand how, join our free webinar.
Register Now

Startup Financing: Venture Debt 101

Thursday 23 June | 11:00 - 11:45am

Learn how venture debt can help take your startup to the next level. Register for our free webinar today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer