Terminating an employee because they have been taking excessive sick leave is a difficult process and can expose your business to great risk if it is not managed carefully. We’re here to guide you through the process.
The Court’s position on terminating for excessive sick leave
The recent Federal Court case of Robinson v Western Union Business Solutions (Australia) Pty Ltd [2018] FCA 1913 (‘Robinson’s Case’) is a warning to employers that terminating an ill employee can expose your business to compensation and penalties if not carried out carefully.
The employee in Robinson’s Case was an ill employee who was away from work for a period of 7 months. The employee had medical certificates and doctors’ reports to justify his absence from work.
The applicant’s employer requested that the employee undergoes an independent medical examination (IME) so that his fitness for work could be determined. The employee refused. The employee was then terminated a few months after his refusal to submit to an IME.
The employee’s argument
The employee argued that the employer should be held liable under section 351 of the Fair Work Act 2009 (Cth). This section provides that:
‘an employer must not take adverse action against a person who is an employee … because of the person’s … physical or mental disability’.
The employee argued that he was terminated because of his ‘disability’.
For this argument to be successful, there needed to be a clear connection between the termination of the employee, and his disability or a manifestation of his disability.
The employer’s argument
The employer argued that the employee was terminated because he could not fulfill the ‘inherent requirement of his position’. This argument is supported by section 351(2)(b) of the Act which says that it is not discrimination if an employee takes adverse action (termination of employment) because ‘of the inherent requirements of the particular position concerned’.
The decision
The Court ultimately held that adverse action had been taken against the employee. This is because the employer had stated in its termination letter and other statements that there were concerns about the employee’s ‘capacity’ to return to work. The court held that there is no distinction between ‘capacity’ and ‘mental disability’. Ultimately, they both reinforce each other.
Furthermore, the employer did not frequently request an independent medical examination. Further requests should have been made by the employer prior to termination.
The aggrieved employee was entitled to compensation of $370,144 which composed of:
- His past economic loss; and
- Future economic loss for six months.
The employer was also imposed with a penalty of $20,000 in accordance with section 546(1) of the Fair Work Act 2009 (Cth).
The lesson to be learnt from Robinson’s Case is that an employee who is ill must be managed very carefully. An employer must ensure that they do not expose the employee to adverse action. All correspondence with the employee should be carefully worded to address the real concerns of the employer, and that those concerns are legitimate within the context of the Fair Work Act.
What to do next?
If you wish to take action against an employee who has been on extended sick leave, then you need to formulate an appropriate strategy that fully complies with the law, and takes into consideration the particular circumstances of your business and of the employee involved.
We can help you do this, call us on (02) 9199 8597 or email us for a no obligation chat.
Other resources to read on this topic
Dealing with excessive sick leave and termination
The information contained in this post is current at the date of editing – 29 August 2024.