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Long-Term Illness And Employment

Employees in Australia are legally entitled to paid and in some cases unpaid, sick leave. Most employees suffer from short-term illnesses at some point, and employers are obliged to provide leave to allow employees time off to recover. However, the situation becomes more complex when an employee has a long-term illness that prevents them from discharging their employment duties. An employer must balance their legal responsibility to the employee with the needs of their business. This article explains the legal rights of an employer and employee in this situation.

Sick Leave

In Australia, all employees apart from casual workers are entitled to personal leave, otherwise known as sick and carer’s leave. Employees can take personal leave to deal with their own illness, caring responsibilities, or family emergencies. Under the National Employment Standards (NES), a full-time employee accrues 10 days of personal leave per year, prorated for part-time workers. An employee’s contract, agreement, or award can specify a different entitlement to personal leave, but it must match or increase on the provisions of the NES.

An employer must treat employees on sick leave fairly and reasonably and avoid any actions that might be construed as medical discrimination in the workplace. In other words, an employer cannot treat their employee less favourably because of their health.

Long-Term Illness And Employment

An employee may be absent for an extended period because of a range of medical conditions or injuries, including both physical and mental illnesses. Some common causes of long-term absence from the workplace include recovery from surgery, mental illness, or serious disease.

If an employee runs out of paid sick leave and is still unfit to return to work, they are entitled to access unpaid extended leave. An employee who is on unpaid leave for more than three months (consecutively or over a year) is not protected from dismissal. Still, an employer should be careful to follow procedural fairness when terminating a worker’s employment because of long-term illness. In fact, employers are advised to proceed with extreme caution with any actions they take.

The Fair Work Act 2009 prohibits an employer from taking adverse action (including termination) against an employee on the basis of a physical or mental disability. If the employee is not able to perform their standard duties, the employer must make all reasonable adjustments to allow the employee to return to work. This might mean modifying the employee’s workload or offering alternative employment within the company that better suits the employee’s needs. An employer might also allow an employee to work from home or work reduced hours. If no arrangements will allow an employee to perform their inherent duties, the employer has a valid reason for dismissal and a good defence against any unfair dismissal claim.

Long Term Illness Policy

One safeguard that an employer should have in place is an employee leave policy. Employers, employees and managers then have a clear idea of expectations and the procedures involved in cases of long-term illnesses. This policy should set out:

  • The employee’s entitlement to sick leave;
  • The medical evidence an employee needs to provide and when;
  • What is meant by a long-term illness;
  • If an employee can use other leave entitlements if they run out of paid sick leave; and
  • Return to work processes.

New employees should read the long-term illness policy during induction and sign to confirm their understanding and agreement.

In a recent case before the Federal Circuit and Family Court of Australia, an employee claimed she was unfairly dismissed because of a long-term illness. Ms Tapping was working for Empress Diamonds Pty Ltd when she was diagnosed with aggressive breast cancer. She informed her employer of her intention to take annual and personal (sick) leave as she was scheduled for surgery. She claimed that when she explained that she would need several weeks to recover, her employer responded that he was “giving [her] the sack”. Her employer denied this claim.

The court believed the employee’s account, particularly as the employee emailed the employer’s accountant directly afterwards to inform him that she was being terminated due to her cancer treatment. Additionally, the employee had a separation certificate that the employer had signed, which gave the reason for separation as relating to her breast cancer treatment. The court dismissed the employer’s assertion that he was unable to read written English and therefore could not understand the certificate’s contents. The employer also published a job advertisement in the days after the conversation to replace the employee. The advertisement did not specify that it was a temporary position due to employee leave. The court was satisfied that the employer unfairly dismissed the employee when he heard that she was intending to access her workplace entitlement to personal and annual leave.

Employers must have a valid reason to dismiss an employee. Long-term illness may be a valid cause for termination, but only if the employee cannot discharge the duties of the position and has exhausted their employee entitlements to paid and unpaid leave. Please contact Armstrong Legal’s commercial law team if you have questions about employment law, unfair dismissal or employee entitlements.

Dr Nicola Bowes

This article was written by Dr Nicola Bowes

Dr Nicola Bowes holds a Bachelor of Arts with first class honours from the University of Tasmania, a Bachelor of Laws with first class honours from the Queensland University of Technology, and a PhD from The University of Queensland. After a decade working in higher education, Nicola joined Armstrong Legal in 2020.

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