Managing some employees can be difficult at the best of times. In the current employment law environment, employees have powerful statutory rights that must be respected. However, employees must also fulfil certain obligations in their role. If those obligations cannot be met, you will have a valid reason to bring the employee’s employment to an end.
What do you do when an employee has been on extended sick leave for a long period of time? You may have concerns about the employee’s ability to fulfil the inherent requirements of their role. This can be a sticky situation to navigate, but there are core principles and a clear legal framework that assists employers deal with an employee’s extended sick leave.
Requesting an Independent Medical Examination
It is not uncommon for employees to become absent from the workplace for a long period of time because of an illness. In most cases, employers have the right to direct an employee to undergo an Independent Medical Examination (IME) to determine whether the employee can continue to fulfil the inherent requirements of the role. In the context of extended leave, these directions can be characterised as a ‘reasonable and lawful direction’. If an employee chooses not to comply with this direction, there may be grounds for termination.
What do you do if your employee fails to attend an Independent Medical Examination?
Depending on the factual circumstances, you may have a valid reason to bring the employment relationship to an end[1]. It is important that you seek advice before taking this next step, because if the process is not carried out properly, you may expose your business to liability including the risk of having to defend an unfair dismissal application[2], general protections application[3] or even a discrimination claim.
The good news for you, is that we can guide you through this process and ensure that each step is carried out in accordance with the legal framework set out in the Fair Work Act 2009 (Cth).
The steps in the process include:
- Providing the employee with a number of opportunities to attend an Independent Medical Examination;
- Making it very clear that failing to attend would mean that a reasonable and lawful direction has not been complied with;
- If the employee refuses to attend the IME a notice that lack of compliance can lead to termination must be provided to the employee;
- The employee must be provided with an opportunity to respond to the notice; and
- If the employee’s employment is terminated, a notice of termination with a valid reason for dismissal must be provided to the employee.
What have you done to protect your business from extended absences?
Hopefully, you are getting the idea that managing an employee on extended sick leave is a delicate process that must be managed carefully. However, one way that you can protect your business from the very start is by including a clause in your contract of employment that failing to comply with a reasonable and lawful direction is a breach of the contract and will lead to termination. We can help you with the drafting of this clause in your employment contracts.
What to do next
Call us on (02) 9199 8597 or email us to get us involved in managing an employee that is on extended sick leave.
We can help you by:
- Reviewing your employment contracts by ensuring that there is a clause relating to following a reasonable and lawful direction;
- Guiding you through the IME process; and
- If the employee is not cooperative, helping you formulate an exit plan.
The information contained in this post is current at the date of editing – 13 October 2025.
[1] Hudson v RMIT University [2020] FWC 4289.
[2] Fair Work Act 2009 (Cth) s 385.
[3] Ibid s 342.