Employers who want to dismiss injured employees are confronted with a confusing spaghetti bowl of regulations that often trip up even the most experienced human resources advisers. This article helps you to untangle the overlapping laws and provides some key principles that you can use to keep out of trouble.

When might it be OK to dismiss an injured employee?

Generally speaking, an employer cannot dismiss an employee because they have an injury or disability arising from work. An employer who does so could find themselves subject to an ‘adverse action’ or ‘general protections’ claim.

However, except during the first six months of a workers compensation claim, an employer can dismiss an employee if the employee is unfit to perform the ‘inherent requirements’ of his or her role and is not likely to be able to do so in the foreseeable future. An ‘inherent requirement’ of the employee’s role something that is essential to the role that the employee is ordinarily employed to perform, not any temporary role that the employee was instructed to perform as a result of his or her injury

It has also been accepted that employers are entitled to dismiss injured employees if they would impose an unreasonable productivity burden on the business or if their continued employment would impose an unreasonable burden on other employees

Can you dismiss an employee who is on workers compensation?

If an employer dismisses an employee who is on workers’ compensation because he or she is unfit for work, the employee may apply to be reinstated. The employee will only be reinstated if a medical practitioner provides a certificate stating that the employee is fit for work.

It is a criminal offence for an employer to dismiss an employee who is on workers’ compensation leave because he or she is unfit for work as a result of his or her injury during the six months after his or her injury.

Can you dismiss an employee who is absent from work or on workers compensation for another reason?

An employer can dismiss an employee who is on workers’ compensation for a legitimate reason other than that he or she is unfit for work. These include:

  • the employee performing poorly in areas in which he or she is fit for work;
  • the employee engaging in gross misconduct; and

However, employers should be mindful that, in any court proceedings, it will be presumed that the employee was dismissed because they were unfit for work. This means that the employer must prove on the balance of probabilities that the employee was dismissed for some other reason.

In practical terms, the presumption in favour of employees means that employers who wish to dismiss employees who are on workers compensation must use rigorously documented human resources practices to ensure that they are able to prove that they dismissed the employee for a legitimate reason.

Are there any other protections that you need to keep in mind?

You should be mindful that an employer is not allowed to dismiss an employee who has been temporarily absent from work for three months or less. An employer who does so may be subject to an adverse action claim. Many injured and ill employees take breaks of around that length.

Key lessons for employers

So where are we left? Employers can stay out of hot water by keeping the following principles in mind.

  • It is illegal to dismiss an injured employee who is not on workers compensation because:
  • he or she has a disability or injury; or
  • he or she has been temporarily absent from work for three months.
  • It is illegal, during the first six months after his or her injury, to dismiss an employee who is on workers compensation because he or she is unfit for work.
  • An employer can dismiss an employee who has not made a workers compensation claim, or who has made a workers compensation claim but whose injury occurred more than six months ago, because he or she is unfit to perform the ‘inherent requirements’ of his or her role and is not likely to be able to do so in the foreseeable future.
  • An employee can dismiss an employee who has not made a workers compensation claim if he or she would impose an unreasonable productivity burden on its business or an unreasonable burden of its other employees.
  • It is always legal to dismiss an employee for a reason unrelated to their injury or absence from work, but you should make sure that you have sufficient documentary evidence to prove the real reason for the dismissal.

How can JFMLAW help?

JFMLAW regularly assists employers with complex disputes involving injured employees. Get in touch on 02 9331 0266 or by filling in our contact form if you need help. You may also be interested in our step by step guides to terminating employees and dealing with long term absentees in our Managers Tool Kit.