Jane frequently calls in sick – averaging six days of sick leave a month. Each time she complies with the employer’s policy and provides a medical certificate. The medical certificate states Jane is “suffering from a medical condition” however provides no further detail. Jane’s absences are impacting the team as her work is reallocated to her team members, contributing to burnout and lowering morale.

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People managers and HR professionals will be familiar with situations like Jane’s.

Frequent and recurring absenteeism is generally accompanied by other challenges in the workplace such as disengagement, burnout or underperformance. Managers checking in with their team regularly, through one-on-one meetings, performance reviews, and surveys, will generally get insights as to whether there are other underlying problems in the workplace. However, an employee may be taking time off for genuine personal reasons, including their own health reasons unrelated to work, or family responsibilities.

Flexible work options, Employee Assistance Programs and regular informal conversations may be solutions however, with a shift to greater remote working arrangements, it can be more difficult to notice signs that a team member is struggling or understand what might be happening in or outside of work.

Employers may feel like their hands are tied if there are frequent or prolonged unexplained absences from work and limited or no information about the employee’s medical condition or its impact on work. But this is not the case. Employers may have a legitimate need to request, or direct, the employee to undergo a medical examination. This may include an independent medical examination arranged by the employer, or a request for information from the treating doctor with the employee’s written consent.

Directions to undergo medical examinations

Where medical examinations are directed, the focus needs to be on ensuring the employee’s health and safety at work, understanding their fitness for work and whether any reasonable adjustments can be made. Sufficient details should also be provided to the doctor about the employees’ duties, for example, by providing a job description, the inherent requirements of the role and the employee’s absence.

If an employee refuses a lawful and reasonable direction to undergo a medical examination or provide information regarding their fitness for work, this may be a basis for disciplinary action – including termination. However, employers should exercise caution before considering terminating in such circumstances, including considering whether the direction was lawful and reasonable and whether procedural fairness has been afforded. A hasty decision may expose the employer to an unfair dismissal or general protections claim.

Assessing the medical reports

Employers should review any medical reports received closely, including assessing whether the employee is unfit for work, and if so, whether on a short-term basis or for the foreseeable future, and whether there any reasonable adjustments that can be made. If the medical report is unclear, it is important to follow up with the doctor to ask further questions.

If the medical evidence demonstrates the employee can safely perform the inherent requirements of their role, there is significant risk of an employment claim including disability discrimination, unfair dismissal or unlawful termination claims if an employer considers termination (more on this below). These risks will also exist if the medical evidence supports the employee performing the role with reasonable adjustments such as working part-time – and if those reasonable adjustments are not considered.

If, on the other hand, the medical evidence demonstrates the employee cannot safely perform the inherent requirements of the role (the essential duties of the job), this may form the basis of a valid reason for dismissal based on capacity, provided an appropriate process is followed.

When can an employer consider termination?

There often comes a time when employers find themselves asking, when does an employee’s absence reach a point where dismissal can be considered? Unfortunately, the answer to this is not always that simple. As you may already be able to tell, there are various sources of obligations and rights that impact on decision-making when considering termination of an ill or injured employee. The sources of these rights and obligations include:

Work-related illness or injury

If the injury or illness is work-related, in most cases workers compensation legislation makes it unlawful for an employer to dismiss the employee because of a work-related injury within a specified period.

For example, in New South Wales an employer must not dismiss a worker because of a work-related injury within six months from when the worker first became unfit as a result of the injury.[1]  In Queensland, if a worker has a work-related injury or disease and cannot work in their usual job, employers cannot use that as a reason for dismissal within 12 months of the date of injury or illness.

Workers compensation legislation provides a comprehensive regime of rights for employees who are dismissed due to a workplace injury to apply to be reinstated if fit for work. Employers also need to be mindful they may have obligations to notify replacement employees of the rights of reinstatement of past workers.[2]

Personal illness or injury

If the injury or illness is not work-related, the workers compensation protected periods will not apply. Despite this, protections under the Fair Work Act 2009 (Cth) (FW Act) and anti-discrimination legislation must still be considered – including the rights of employees to bring unlawful termination, adverse action, unfair dismissal and disability discrimination claims.

Under the FW Act, an employee is protected from termination due to a temporary absence. An absence will be a temporary absence if the employee provides a medical certificate or statutory declaration within 24 hours of the commencement of the absence, or such longer period as is reasonable in the circumstances.

An employee is not protected under the FW Act’s temporary absence provisions if:

• their absence extends for more than three months, or the total absences within a 12-month period have been more than three months (whether based on a single illness or injury or separate illness or injuries); and
• the employee is not on paid personal/carers leave for the duration of the absence.

Even if the employee’s absence has been extended for more than three months, unfair dismissal and adverse action risks can still be present – but it is important to manage any potential termination carefully and with advice as appropriate.

It is unlawful for an employer to take adverse action (including dismissing the employee or injuring the employee in their employment) because an employee has a workplace right, has exercised a workplace right, or proposes to exercise a workplace right. Workplace rights include taking personal/careers leave, making a complaint about bullying or making a workers compensation claim. However, it is not unlawful to terminate an employee if they are unable to carry out the inherent requirements of the role. The concept of inherent requirements exists under the FW Act and in anti-discrimination legislation.

Under the Disability Discrimination Act 1992 (Cth), the inherent requirement defence requires the employer to establish the disability would prevent the employee from performing the inherent requirements of the position. This also requires consideration of whether the employee could perform the inherent requirements if reasonable adjustments were made to the position.

Regardless of the length of absence or whether it is a work or non-work-related illness or injury, navigating the legislative framework for managing or terminating an unfit worker is complex and there is little room for error. If this article has raised any questions about managing ill and injured employees, including directions to undergo medical examinations, please reach out to the team at FCB here or call 02 9922 5188.

[1] Workers Compensation Act 1987 (NSW) section 248

[2] See for example Workers Compensation Act 1987 (NSW) section 247.