Can An Employee Be Terminated While on Sick Leave?

Can An Employee Be Terminated While on Sick Leave?

As an employer, have you ever wondered if you can terminate an employee while they are on sick leave? Alternatively, as an employee, have you ever wondered whether you can be terminated while you are on sick leave?

Employees on full-time and part-time contracts are entitled to a certain number of paid sick days per year. The issue of sick leave, however, becomes murky, where a period of sick leave overlaps with dismissal.

In this article, we will explain whether an employee can be terminated while they are on sick leave, which employees are protected and which aren’t from termination while on sick leave, as well as answers to other frequently asked questions. 

Table of Contents

Can an employee be terminated while they are on sick leave?

The short answer is yes. According to the Australian Government’s Fair Work Ombudsman(FWO), employees can be terminated while they are on sick leave. 

However, sick leave termination is only legal under the following circumstances:

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

Example of lawful termination while an employee is on sick leave: 

Jay Shawn has worked for the company Cash Money for the last four years, but he is currently on sick leave. During his sick leave, his employer Dwayne Karter provides him and his fellow employees with notices of termination due to company closure related to financial issues. This termination of employment would be considered legal due to Jay Shawn’s dismissal due to the company’s financial issues rather than due to him being on sick leave.

Example of unlawful termination while an employee is on sick leave:

Chris Brown is on paid sick leave since he has been sick for two weeks, and his employer terminates him while he is on sick leave because he wants to hire a new employee to replace him. This termination would be unlawful because Chris Brown is being terminated because he is on sick leave.

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What are the laws in relation to sick leave in Australia?

In Australia, employees are well-protected by laws at the State and Federal level. The FWO outlines the laws governing paid sick leave in Australia. According to the FWO, employees are entitled to take sick leave if they are unable to work due to injury or illness or injury. The entitlement to paid sick leave is provided by National Employment Standards (NES) entitlements.

Full-time and part-time employees are entitled to paid sick leave, but casual employees are not. However, all employees are allowed to take unpaid sick leave, including casual employees. Full-time employees are provided with 10 days of paid sick leave per year, but part-time employees receive paid sick leave prorated according to the hours they have worked.

Generally, employees who are absent from work temporarily because they are sick or injured may be provided with protection from being dismissed. However, when you’re on sick leave, you may or may not be protected from dismissal based on whether you’re a casual or permanent employee.

Which employees are protected from being terminated while they are on sick leave?

Employees are generally protected from dismissal during their sick leave, but there are certain conditions that must be met. An employee must show the following:

  • The employee must provide evidence of their illness or injury
  • The employee must be absent from work due to their illness or injury for less than three consecutive months, or a total of fewer than three months during the last 12-month period
  • To be protected from termination, the employee must still be using their paid sick leave

It’s important to note that employers can’t terminate employees no matter how long they’ve been on leave if they are using paid sick leave for the entire duration of their absence.

Employees can also be protected from being terminated even if they have taken all their paid sick leave and been absent for more than three months. For example, additional protection can be provided to employees in accordance with state and territory workers’ compensation and rehabilitation legislation. 

Furthermore, employees have the ability to contest their termination if they believe their employer hasn’t followed the appropriate procedures for terminating them. 

When applying for sick leave, employees can choose to take paid, unpaid, or a combination of paid and unpaid sick leave for their absence. The combination of paid or unpaid leave will not affect their eligibility for protection within the required period of time.

Which employees are not protected from being terminated while they are on sick leave?

Employees are likely not to be protected if they are taking sick leave for a relatively long period of time. An employer may legally dismiss their employee, regardless of their employee providing  medical evidence, under the following conditions:

  • The total length of their absence due to illness or injury is more than three consecutive months or a total of more than three months over the latest 12-month period; and
  • If during that period, the employee has taken all of their paid sick leave 

The only exception to this rule is if employees take sick leave that is paid for the whole time. In that case, they would be protected from dismissal regardless of how long they were on leave.

What should employees do if they think they have been illegally terminated while they’re on sick leave?

Employees can contest their termination by using the following methods:

You should be aware that there is a 21-day limitation period to make a general protections claim. The Fair Work Commission(FWC) helps employees check their eligibility for a general protections dismissal claim

Similarly, through the FWC, you can check your eligibility for an unfair dismissal claim. Furthermore, you can hire a lawyer to help you determine whether you can contest your termination.

What requirements have to be met for an unfair dismissal claim?

Unfair dismissal claims are made in accordance with section 394 of the Fair Work Act 2009. If an unfair dismissal claim is successful, the employee who has been unfairly dismissed will be provided with a remedy. Generally, unfair dismissal claims have to be made within 21 days after the dismissal has occurred. 

However, the FWC can provide an extension for the application to be made. In these situations, the following factors outlined in section 394(2) of the Fair Work Act are taken into account:

  • The merits of the application
  • What caused the delay
  • Whether the employee was aware that they had been terminated at the time they were dismissed or whether they discovered that they were terminated at a later date
  • Whether the employee had taken any action to contest the termination that caused a delay in making an unfair dismissal application

It’s important to note that to make an unfair dismissal claim, you must have been employed for at least six months. If you’re an employee of a small business, you have to be employed for a minimum period of 12 months before you can make an unfair dismissal claim.

Frequently Asked Questions(FAQs)

What is considered sick leave abuse in Australia?

Abuse of sick leave occurs when an employee takes sick leave for reasons other than being ill.

What to do if you run out of sick leave in Australia?

Your employer may allow you to take unpaid sick leave or annual leave if you have run out of paid sick leave.

Conclusion

Ultimately, as an employer, you can terminate an employee while they’re on sick leave under certain circumstances. Whether you’re an employer planning to terminate your employee who’s sick leave or an employee who believes that they have been unfairly terminated while they are on sick leave, it is important to approach the situation through a legal channel.
Whether you’re an employer or an employee, you should hire a lawyer to help you make an informed decision instead of a rushed one.

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