Terminating an employee due to injury or illness is a complex area fraught with legal, ethical, and human resource challenges. In Australia, the legal framework surrounding this issue is designed to protect both the rights of employees and the operational needs of employers.
This article delves into the key considerations and legalities of terminating an injured or ill employee, with a focus on NSW and workers' compensation implications.
Understanding the legal landscape
In Australia, employment laws strictly regulate the termination of employees, especially those suffering from injury or illness. The Fair Work Act 2009 and state-specific legislation like the Workers Compensation Act 1987 (NSW) provide a clear framework that employers must navigate carefully.
Terminating an injured employee: the considerations
Terminating an injured worker is a delicate and legally complex matter. While you might face justifiable business concerns, navigating this situation ethically and within the bounds of Australian law is paramount.
Fair Work Act protections
The Fair Work Act prohibits dismissal on the grounds of an employee's temporary absence due to illness or injury. This is provided the absence is supported by appropriate medical evidence and does not exceed three months, or a total of three months over a 12-month period.
Workers’ compensation in Australia
Workers' compensation is a mandatory insurance scheme that provides financial support and medical care to employees injured or sickened because of their work. Workers' compensation legislation differs across states and territories, but in general, employers must purchase workers' compensation insurance to cover themselves and their employees.
Workers' compensation benefits include things like expenses for medical treatment, lost wages, permanent impairment, and death benefits. Terminating an injured employee on workers' compensation is illegal unless there are exceptional circumstances like redundancy.
Workers’ compensation in NSW
Employees on workers' compensation in NSW are further protected. The Workers Compensation Act states that you cannot dismiss an employee within six months solely because of their injury or incapacity to perform work resulting from a workplace injury. Beyond six months, dismissal of an injured employee is permissible only once the employer has fulfilled all responsibilities towards the employee.
Genuine operational reasons
Employers must demonstrate that any decision to terminate is based on genuine operational requirements of the business and not the employee's incapacity. This might include the inability to adjust the work or provide suitable duties after reasonable adjustments have been considered.
Consultation and support
Before making any termination decision, employers should consult with the employee, review possible workplace adjustments or alternative positions.
Documentation and communication
Maintaining transparent communication and thorough documentation throughout the process is vital. This includes keeping detailed records of consultations, medical assessments and any efforts made to accommodate the employee's condition.
Explore alternatives to termination
If the injured worker can't return to pre-injury duties, this could include modified duties — performing adjusted duties with less physical or mental demand — redeployment, flexible working arrangements, rehabilitation programs to support the employee's return to work or utilising accrued leave entitlements, including sick leave, annual leave or personal leave, to cover the absence.
Risks of unlawful termination
Terminating an employee without adhering to the legal and procedural requirements can lead to claims of unfair dismissal, discrimination or breach of employment contracts. These cases may be referred to the Fair Work Commission (formerly the Industrial Relations Commission). Employers in NSW must be mindful of the potential legal implications and the importance of proceeding with caution and due diligence.
Best practices for employers
Running a small business comes with its fair share of challenges, and navigating employee illness or injury can be particularly tricky. Here are some best practices for striking the right balance between supporting your people and maintaining business continuity.
Develop clear policies and procedures
Establish well-defined guidelines outlining sick leave, workers' compensation claims and return-to-work processes. Ensure policies are readily accessible and easily understood by all employees and stay updated on relevant workers' compensation legislation and workplace safety regulations.
Train managers on legal requirements and sensitive communication
Equip managers with the knowledge and skills to handle sensitive conversations about illness, injury, and performance concerns. Train them on legal requirements, fair dismissal principles and respectful communication practices.
Build a positive and supportive workplace culture
Promote empathy and understanding towards employees facing health challenges. Implement programs to promote employee well-being and mental health and encourage a culture of mutual respect.
Prioritise communication and compassion
When dealing with injured workers, it is best practice to approach the situation with empathy, maintain open lines of communication, and explore all possible options to retain the employee within the organisation.
Seek legal advice
Given the complexity of employment and workers' compensation laws in Australia and NSW, seeking legal advice is prudent. This ensures any actions taken are compliant and in the best interest of both the employer and the injured employee.
Empowering employers with knowledge and support
Understanding your obligations and the rights of your employees is crucial when facing the challenging decision of terminating an injured or ill employee. By adhering to legal requirements and adopting a compassionate approach, employers can navigate these situations with integrity and fairness.
Need guidance on terminating an injured or ill employee?
Terminating an employee due to injury or illness requires careful consideration and expert guidance. Peninsula is dedicated to supporting Australian businesses through complex HR and legal challenges.
Contact Peninsula today for comprehensive advice on managing terminations ethically and legally while upholding the dignity and rights of your employee.