Terminating Workers on Sick Leave

A common issue for many employers is dealing with the issue of staff members who abuse their sick leave entitlements or underperforming  staff accessing their sick leave for a stress claim straight after a disciplinary meeting.

An employer is not prevented from terminating an employee whilst on sick leave if the termination is attributed to performance-based or other lawful reasons, however they need to be able to prove this is the case. Employers are likely to be exposed to a claim if that employee then lodges an unlawful termination complaint.  

Small to Medium businesses with an underperforming employee are often too busy to plan an appropriate course of disciplinary action against them. Then the employer loses patience when that staff member takes more sick leave at an inconvenient time and moves much too quickly to dismiss that person.

A good example of this is in the matter Kavassilas v Migration Training Australia Pty Ltd[2012] FMCA 22.  Kavassilas ('the applicant') took two days of sick leave. This she was entitled to in her contract. Her employer, Migration Training Australia ('MTA'), though dismissed her. This was despite  Kavassilas informing the MTA that she would provide a medical certificate upon returning to work.

She received a letter terminating her position. This gave the reasons for her dismissal based on several performance based-reasons including:

  • Failure to carry out her duties in a satisfactory manner
  • Disrupting the activities of the company, resulting in a loss of income
  • Harassment and bullying of fellow staff members
  • Failure to diligently and consistently apply herself to the discharge of her duties
  • Failure to keep them aware of her absences from work

When the matter went to a hearing, the evidence given by MTA's directors contradicted each other and did not justify any of the reasons given. MTA's directors also admitted to knowing that the applicant was on sick leave and was going to produce a medical certificate upon return.

The Federal Magistrate was of the opinion that the real reasons for her dismissal were "impulsive and irrational" and that her termination was "triggered by her absence from work".

FWA found that the termination of the applicant contravened s352 of the Fair Work Act, which protects employees from dismissal whilst on sick leave because of illness or injuries prescribed by the Fair Work Regulations.

The regulations do require that a medical certificate be produced within 24 hours of the start of the leave but an employee may take a longer period of time provided it is "reasonable in the circumstances". This reaffirms the intent of the Fair Work Act on protecting employees against dismissal in relation to an employee's exercise of rights to take sick leave. MTA may have held an incorrect view that an employee could be terminated whilst absent on sick leave at any time until a medical certificate was actually submitted.

Employers should be very careful if they choose to dismiss staff who are currently taking sick leave. If an employer is found to have contravened s352, they will be liable for the payment of wages and compensation. It can easily be assumed that if an employee has been dismissed whilst taking sick leave, it was due to the fact that the employee was on sick leave. To prove otherwise, employers must have clear evidence showing that the dismissal was not connected to the leave being taken and that there was no unlawful motivation for the dismissal.

Opinion is that proving that someone was not entitled to take sick leave is virtually impossible.

Employers would be better to focus on the employee’s poor performance and make sure that all relevant documentation is in order. If this is a concern and you do not want to take the risk handling these issues yourself, an ideal policy to take out is the Employsure cover where they basically prevent, advise, audit and ultimately compensate you if Fair Work Australia still finds against you.

Call us today if you would like to discuss this further.

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