Managing Sick or Injured Employees

Published 24 August 2022

At some point, every employer will confront managing an employee who is suffering from an injury, medical condition or disability. When this occurs, it is important to know that there are legal protections for injured and ill employees and for employees with a disability. Whilst at times, an employee cannot continue employment due to illness or injury, failures of process in managing or terminating the employment of an ill or injured employee can result in employees having a substantial legal claim against their employer.

The Nature of Obligations
Whilst there are obligations placed upon an employer in relation to managing a sick or injured employee, there are also limitations on those obligations. For example, if an employee cannot perform the inherent requirements of their position, after any reasonable adjustments have been made, an employer is not required to continue the employment of the employee.

Another issue which arises frequently in the workplace is where the medical condition of the employee is such that it may place the employee, or other employees, at risk. If, even with reasonable adjustments, the employee still cannot perform their essential tasks safely, the employer is not required to continue the employee’s employment.

Short Absences from Work
Great care is needed before reaching the decision to terminate the employment of an employee who is temporarily absent, but likely to regain their health and be able to perform the inherent requirements of the position.  There are a number of statutory protections in place to protect the status quo of a worker’s employment in these situations.

Many contracts of employment will provide that the employee’s employment can be terminated if the employee has been absent for a period of three months in a calendar year. Whilst this may provide a contractual right to terminate, this is not sufficient to displace the many numerous statutory protections.

Legal Risks Arising from the Termination of an Absent Employee
Firstly, it should be noted that the legal position will depend on whether or not the employee’s injury or illness occurred at work.

If it is a work injury
Where an employee has been injured at work, state legislation offers further protections to employees who are absent due to a work injury. In New South Wales, section 248 of the Workers Compensation Act 1987 (NSW) prohibits an employer from dismissing an employee on the grounds that they are not fit for employment due to having suffered a work-related injury. This protection is afforded for a period of six months after the employee first becomes unfit to work due to the injury.

State legislation also requires that employees who have suffered a work injury, must be given ‘suitable’ employment, with consideration given to factors such as:

  • the employee’s incapacity and medical advice;
  • the employee’s age, education, skills and work experience;
  • any return-to-work plan, injury management plan or similar document; and
  • any occupation rehabilitation services being or has been provided.

A return-to-work program should be prepared for the employee, with appropriate adjustments made to the employee’s duties, location, or hours of work, as may be reasonable to support their recovery.

It is also important in these cases for employers to consult with their insurer in relation to any implications for premiums if suitable duties are not provided for the employee.

If it is not a work injury
By comparison, federal legislation provides certain protections to all employees who are injured or ill, regardless of whether that injury occurred at work.

Section 352 of the FW Act prohibits an employer from dismissing an employee because the employee is temporarily absent from work because of an illness or injury. Specifically, section 352 of the FW Act (together with the Fair Work Regulations 2009 (Cth)) provides that an employer must not dismiss an employee who is absent for a period of up to three months, after having exhausted all personal leave. This three-month period can also be assessed from a series of absences over a 12-month period, resulting from one or more injuries or illnesses.

Irrespective of whether it is a work injury
Whilst a dismissal may not be prohibited due to the period of absence, it may still constitute an unlawful dismissal under state and federal discrimination legislation or the general protections provisions of the FW Act.

While it is often overlooked, a temporary illness may constitute a disability under discrimination legislation. Under the federal Disability Discrimination Act 1992 (Cth) (DD Act) it is unlawful to discriminate against a person by terminating their employment. This is regardless of whether that person has been absent for a period of three or six months, or longer. However, section 21A of the DD Act provides an exception to this. It will not be unlawful to dismiss a person for their disability (including a temporary or long-term illness) if that disability means that the employee is unable to carry out the ‘inherent requirements’ of the job. Employers must objectively assess what duties are ‘inherent requirements’ of the role and they can only determine that a person is unable to carry out those duties by reference to medical advice. Employers must then also consider if any reasonable adjustments could be made to the employee’s role that would allow them to continue to work. If there are no reasonable adjustments that can be made, or if those adjustments would cause an unjustifiable hardship to the employer, then employers may rely on the section 21A exception.

In addition to this, section 351(1) of the FW Act prohibits employers from taking any adverse action against employees for an unlawful reason, such as ‘a physical or mental disability’. However, an exception to this is provided under section 351(2) of the FW Act, which sets out that adverse action may be taken if it is lawful under any anti-discrimination law or if the action is taken because of the inherent requirements of the role. ‘Anti-discrimination law’ includes various discrimination legislation at the federal and state level, but relevantly for managing sick or injured employees, it also includes the DD Act. As such, to avoid risk of liability under the general protections provisions, employers should follow the same process of determining the inherent requirements of the role, making any reasonable adjustments, and only then determining whether dismissal is necessary or appropriate under the circumstances.

Lastly, as with any termination of employment, employers should consider whether the employee is covered by the unfair dismissal provisions of the FW Act and always follow proper process for termination. For more information on this, please refer to our e-Publication Termination of Employment: A Lawful and Ethical Approach.

If an employee has been injured and absent from work for a period of more than three or six months of unpaid personal leave (depending on whether they were injured at work or outside of work), employers should adopt the following approach, prior to considering termination of employment;

  1. Determine whether an employee can perform the inherent requirements of the role.
  2. Consider what adjustments can be made to the employee’s duties, location, or hours of work to assist with their recovery and return to work.
  3. Consider whether those adjustments are reasonable.
  4. If the employee cannot perform the inherent requirements of the role, and no reasonable adjustments can be made to assist them, follow the process of procedural fairness for termination.

Medical Information
An employer should never make decisions about what an injured employee can or cannot do based on generalisations or assumptions. It is always important to obtain information from the treating doctor and/or an independent expert. If the employee refuses to provide consent to the employer obtaining medical information or a medical report, it may be appropriate for the employer to notify the employee that in these circumstances, they will have to manage the employee as if they do not have a medical condition. If it is already known from medical advice that the employee has a medical condition and the employee refuses to allow the employer to obtain updated information, this could be grounds for dismissal, particularly if the employer has genuine safety concerns associated with the employee performing his or her role.

Tips for Managing Injured Employees
There are some things an employer must not do when managing an injured or ill employee:

  • Do not make assumptions about a medical condition without obtaining expert medical information regarding the condition.
  • Do not do anything to the employee’s detriment because of the illness or injury if the illness or injury has no impact on the employee’s work, or safety at work.
  • Do not assume that it is okay to treat all employees the same. An employer has an obligation to make adjustments (provided those adjustments are reasonable and do not impose unjustifiable hardship upon the employer) to enable an employee to carry out their position.
  • Do not assume that the position description sets out the inherent requirement of a position. A position description may contain things that are required by an employee, but not necessarily ‘inherently’ required.
  • Do not base employment decisions entirely on what the employee tells their employer about a medical condition.
  • Do not make assumptions about an employee’s particular condition based on generalised information (such as information from the internet).

There are some things an employer must do when confronted with an employee suffering an injury or illness:

  • Make an assessment of the job performed by the employee to determine what the inherent requirements of the position are.
  • Obtain the consent of the employee to either speak to or obtain a report from the treating doctor or send the employee to an independent medical officer.
  • Provide a doctor or other expert with information regarding the inherent requirements of the position.
  • Carefully consider the medical condition of the employee based on the opinion of the expert.
  • Ensure that any views formed about the employee’s employment are put to the employee for their comment and response.
  • Ensure confidentiality is maintained at all times in relation to medical information.

This is a complex and high risk area of law and employers are advised to proceed with caution and seek legal advice for their specific situation.

The content of this publication is general in nature and provides a summary of the issues covered. It is not intended to be, nor should it be relied upon, as legal or professional advice for specific employment situations. Olexo Workplace Law recommends that specialist legal advice should be sought about specific legal issues.