Termination – Employee Absence or Illness

Posted by

Can you terminate an employee’s agreement due to illness or incapacity?

There are some circumstances where an employer will be justified in dismissing an employee due to prolonged illness or incapacity. However these circumstances are limited and careful procedures must be followed to protect the employer against claims for unfair dismissal, unlawful termination or adverse action.

Employee absence due to illness

The Fair Work Act 2009 and the National Employment Standards offer general protections against employee dismissal, which include protection against dismissal due to temporary absence from work. “Temporary” means a period totalling 3 months within a 12 month period. Employee absence may extend beyond 3 months if they are on paid sick leave.

If the employee has suffered a work-related injury, worker’s compensation will usually impose a period of protection during which an employee is protected from dismissal.

If an employer dismisses an employee because they are temporarily absent from work due to illness or injury, this is likely to be considered as discriminatory and may constitute unlawful termination or an adverse action against the employee.

Evidence supporting reason for absence

Where an employee is absent due to illness or injury, an employer has the right to request evidence that would substantiate the reason for absence. This could include a request for the employee to provide a medical certificate.

A medical certificate does not always state the nature of the illness or condition. Under normal circumstances, if a medical practitioner has determined that the employee is not fit for work, an employer cannot demand to know the nature of the employee‟s illness or condition. Such a demand can place significant stress or embarrassment on an employee.

However, if an employee is frequently taking sick leave an employer can meet with the employee (and their representative if requested) to ask for their cooperation in determining more details about the nature of the employee‟s condition. This meeting must not be in the form of a disciplinary meeting, and must be for the purpose of determining whether the employer can do anything to help the employee perform their job. This may include discussing more flexible hours, or more favourable working conditions.

If the employer has reasonable grounds for suspecting that the employee is fit for work despite the evidence provided by the employee, the employer may be able to request a second opinion from a doctor of their choosing. This should be done at the employer’s own cost and with respect to the employee’s condition. The employer must be wary to avoid actions that could be seen to be aggravating or unnecessary.

Disciplinary action and termination

An employer may only commence disciplinary action if the employee:

  • fails to provide the employer with sufficient notice of their intention to be absent due to illness or injury. Such notice procedures may be detailed in an employment agreement, award or collective agreement. Sufficient notice is defined by the Fair Work Act 2009 as being “as soon as practicable”;
  • refuses to provide evidence substantiating the reason for absence;
  • refuses to cooperate in providing the employer with sufficient detail about their condition to allow the employer to adopt measures more favourable to the employee, for the purposes of preventing their frequent absence.

If an employer engages in disciplinary proceedings with the employee, it is advisable to adopt the following measures:

  • allow the employee an opportunity to respond to any allegations;
  • allow the employee to have a representative with them during any meeting;
  • ensure that all reasonable measures have already been adopted to help the employee perform their job;
  • take detailed records including the days in which the employee was absent, any medical evidence produced, the quality of the employee‟s performance when they are at work, and what is discussed during any meeting that takes place.

After an employee has exhausted their worker’s compensation period of protection or their temporary absence, or when disciplinary proceedings have been unsuccessful, an employer may be able to justify termination of employment.


Employee incapacity

In the event of an employee becoming incapable of performing their work, an employer may be justified in terminating their employment. An employee may become incapacitated due to a variety of reasons including injury or degenerative disease, therefore sensitivity and discretion must be exercised by the employer in these circumstances.


The termination process

Termination can be considered if the employee remains unable to perform the inherent requirements of the job now and in the foreseeable future, and after any worker‟s compensation protection or temporary absence periods have been exhausted.

In considering dismissal, an employer should proceed on the basis that termination is the last resort, rather than it being inevitable.

The employer should first consider the following:

  • the inherent requirements of the employee‟s position;
  • the extent to which they can no longer perform these requirements;
  • whether they will be able to perform these requirements in the foreseeable future;
  • whether the employee’s injury or condition is improving, stable or deteriorating; and
  • whether the employee is still productive despite the fact that they may not be fulfilling the inherent requirements of their position. An employee who is still productive may not be able to be justifiably dismissed, depending on a number of factors.

Once these have been considered, the employer will be in a better position to determine whether the employee‟s position can be modified, or whether they would be better suited to a permanent alternative position.

The employee should always be made aware that termination is a possible consideration. This should be in the form of a meeting, where the employee is allowed a representative and the opportunity to respond and make suggestions.

If the position can be modified, an employer should take care in ensuring that this modified position does not become a “new position” for the employee. If a court is required to assess the employee‟s level of incapacity, the employer will want this assessment to be against the requirements of their original position, rather than what could be taken to be their new position.


Medical evidence

It is likely that medical evidence will be required by the employer to help determine the extent of the incapacity. It is preferable that such evidence is in the form of a current, written medical opinion or report, and the employer should request that such a report be directed at the inherent requirements of the employee’s position and their capability of performing these now and in the foreseeable future. An employer is not entitled to know any details about the injury or condition other than to the extent that it affects the employee‟s ability to perform their required duties.



If it is apparent that the employee‟s employment will not be able to continue after the above process has been followed, the employer may be able to terminate employment. In the event of termination, employers should note that all relevant notice provisions must be adhered to.



Employee absence can be a sensitive and complex issue. It is vital that employers make every effort to assist and accommodate the employee to prevent termination. If termination is considered, it is essential that the correct process be followed to avoid claims for unfair dismissal, unlawful termination or adverse action. This should be done on a case-by-case basis, rather than adopting any set company procedures for these situations.


If you have any queries or require any advice in relation to this, or any other employment law matter please contact Tony Pattinson at Ferguson Cannon Lawyers.

Tags: , , , , , , , , , , ,

Category: Employment Law, Fact Finders, General

Comments are closed.