Terminating an employee on excessive sick leave is a very difficult process and can expose a company to great risk if not managed carefully.

The Court’s position on excessive sick leave termination

The recent Federal Court case of Robinson v Western Union Business Solutions (Australia) Pty Ltd [2018] FCA 1913 (‘Robinson’) is a warning to employers that terminating an ill employee could expose the company to penalties and liability.

The applicant in Robinson 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 so that his fitness for work can be determined. The employee refused. The employee was consequently terminated, a few months after his refusal.

The employee’s argument

The employee argued that the employer should be held liable under section 351 of the Fair Work Act 2009 (Cth). That 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 must be a clear connection between the termination of the employee, his disability or a manifestation of his disability.

The employer’s argument

The employer argued that the employee was terminated because he could not fulfil the ‘inherent requirement of his position’. This argument is supported by section 351(2)(b) of the Act which provides 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 request should have been made by the employer.

The aggrieved employee was entitled to compensation of $370,144 which composed of:

  1. His past economic loss; and
  2. Future economic loss for six months

The employer was also imposed with a penalty of $20,000.00 in accordance with section 546(1) of the Fair Work Act 2009 (Cth).

The lesson learnt from Robinson, 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 otherwise they will be exposed under the Fair Work Act.

If you require assistance or would like more information about excessive sick leave, please do not hesitate to contact JFMLAW on 02 9331 0266.