Employees have an absolute right to take leave when they are unwell or injured, or if they need to care for someone else, and generally a couple of days recuperation and they are back on the job and everything is hunky dory.  Sometimes though, a decision may have been made, or needs to be made, about the ongoing nature of an employee’s position in your company and you need to know if you can terminate the employment of someone who is on personal leave due to illness.

Can an employee be terminated while on sick leave?

Short answer: yes.

However,…   There’s always an however …!

However, terminating the employment of someone on personal leave due to illness is only legal if:

• There is a lawful reason for the employee’s termination.
• The employee doesn’t have any protection against termination.

For example, Jeffrey is on personal leave as he is unwell.  During this leave the employer is considering closing his business down due to financial concerns and he is about to start a redundancy consultation process with the team. Although Jeffrey is on sick leave, he should be included in any consultation processes, and he can decline if he is too unwell or doesn’t wish to attend.

If the business made the decision to close, and terminations due to redundancy resulted, including that of Jeffrey’s, the termination of employment would be deemed lawful as it is due to the financial position of the business and has nothing to do with Jeffrey being on sick leave.

But here’s an alternate situation. Jeffery is on leave as he is sick and after four weeks, he receives a termination of employment notice.  The business is still operating, there are no redundancies, the position is still required, and Jeffrey is expecting to return to work in the next few weeks once he has recovered from his illness. However, his employer is frustrated because of Jeffrey being on leave, so has decided that he wants him gone so he can replace him.  This example is absolutely unlawful, and you’ll find yourself in all sorts of trouble if you attempt to remove someone simply because they are sick. To be clear – an employee has the right to be sick, and you cannot take action against someone for exercising a workplace right!

National Employment Standards (NES)

It’s generally well known that full and part time employees are entitled to personal leave that covers them for when they are unwell.  As per the NES, full time employees are provided with ten days leave per year with part timers receiving a prorated number of days according to the number of hours they work. This leave is cumulative from year to year, so an employee may end up with a large amount of paid sick leave entitlements.  

Also under the NES, all employees are allowed to take unpaid sick leave.  This includes casual employees.

Protection from termination while on sick leave

During sick leave, employees are typically protected from dismissal, provided that certain conditions are met. To qualify for protection, employees must fulfill the following requirements:

• The employee must provide evidence of their illness or injury if requested
• The employee must be utilising their paid sick leave entitlements.  This point is important as an employer cannot terminate employment regardless of the duration of their leave, if the employee is using their accrued paid sick leave entitlements for the entire period of their absence and they have provided evidence of their illness or injury OR
• If the employee has exhausted their paid sick leave entitlement, they have been on unpaid sick leave for a period of less than three months

If you have an employee who has exhausted their paid sick leave entitlements AND has subsequently been on a period of unpaid sick leave for a period exceeding three months (or 3 months in a 12 month period), you may have grounds to terminate their employment due to them being unable to perform the inherent requirements of the role. There is a procedure to follow in this event, where you ask the employee to provide you with information on their condition, and their prognosis for returning to work for you to consider prior to making any decision. It is important to follow a fair and transparent process if you are considering terminating someone’s employment due to long term illness or injury, to avoid being on the end of an Unfair Dismissal or General Protections claim. 

Employees have the right to contest the termination of their employment through various avenues, including:

• Filing an unfair dismissal application if the dismissal is deemed unfair (no valid reason), harsh, unjust, or unreasonable
• Making a general protections claim if the dismissal is based on the employee exercising a workplace right
• Bringing a claim under relevant state or federal anti-discrimination laws.

Ultimately, you can terminate the employment of someone who is out on personal leave for illness or injury, but it comes with restrictions and there are risks if you fail to follow a fair and legal process.  If you are facing this situation and need advice, contact the HR Staff n’ Stuff team now to discuss your individual circumstances.