Illness and Termination – What are the risks?

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How should employers deal with workers who are ill or incapacitated?

What are some of the risks employers might face if they proceed to terminate a worker’s employment in these circumstances?

And can individuals involved in these types of decisions face separate penalties?

These matters were recently considered by the Australian Federal Circuit Court in the matter of Collison.

The Facts

The worker was employed by the first respondent as a hotel events manager for approximately nine months.

It was alleged that the worker visited her GP and psychologist displaying symptoms of severe anxiety and stress. These conditions, it was claimed, had been aggravated by a disagreement the worker had with the second respondent, the manager of the hotel.

The worker subsequently provided a medical certificate for five days personal leave. The second respondent wrote to the worker purportedly on a “without prejudice” basis, claiming that he could see no sign of illness in the worker when she left work.

At the end of her period of personal leave, the worker advised the second respondent that she would require further personal leave. In addition, the worker claimed that she could not advise the second respondent as to when she was likely to return to work, but that she would provide further medical certificates if required.

The second respondent responded to the worker by advising that:

  1. the worker’s paid personal leave entitlement had been exhausted;
  2. any worker’s compensation claim brought by the worker would likely be rejected;
  3. in order to facilitate the worker’s safe return to work, he would need to be put into contact with the worker’s doctor; and
  4. a failure to assist the second respondent in this regard might jeopardise the worker’s employment.

The second respondent’s approach, in this regard, was ultimately found by the court to be unreasonable and not by any standards “the industrial norm”.

It was also found that the second respondent’s mere mention of a worker’s compensation claim and admissions of being “cautious” and fearful of being “set-up” , were indicative of the reason for dismissal. This was despite submissions made on behalf of the respondents that the worker was dismissed for a failure to assist in facilitating her return to work.

Representations were also made on the worker’s behalf to the respondents by her solicitor after the worker sought legal advice. The court held that this request constituted an inquiry in relation to the worker’s employment within the meaning of the relevant provisions of the Fair Work Act (Cth) (“the Act”).

In response to an email from the worker’s solicitor, the second respondent terminated the worker’s employment.

In his email to the worker, the second respondent said:

Later in the evening your solicitor informed me (presumably with your instructions) you were ‘sick and will not be returning to work until further notice.’
The response is highly unsatisfactory and provides grounds for dismissal”.

The second respondent also offered to re-employ the worker on the same terms and conditions, if she demonstrated a capacity to return to work within the following month.

The court held that the first respondent contravened the Act in terminating the worker’s employment, as a consequence of the worker having “workplace rights” in being entitled to claim personal/carer’s leave, and benefits under the Accident Compensation Act 1985 (Vic).

Although the second respondent had not yet assumed legal ownership of the hotel, he managed the business and “made all decisions relevant to the proceedings, without recourse to the (then) owner”. As such, the second respondent was taken to have contravened the Act.

The matter has been stood over to deal with the issues of relief and penalties.


This case demonstrates that care should be taken in the management of injured workers, particularly when they have or are exercising “workplace rights” in the form of personal/carer’s leave or workers’ compensation. If a decision is made that is likely to affect the worker’s employment, thought must be given to the reason for making that decision. Is it because worker had taken, or could take, such leave? If the answer to that question is in the affirmative, then it is possible that the employer will face liabilities under the Act.

The case also shows that not only can corporate employers be held liable for breaches of the Act, potentially leading to the civil penalties being ordered against them, but that those individuals involved in the breaches can also face liability.

For further information, please do not hesitate to contact us.

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