Frontline Intelligence - Legal Experts: Managing chronic sick leave

by 21 May 2012

All employers should have a well-defined policy on the taking of sick leave. Such a policy should include clear counselling and/or disciplinary guidelines to be followed in the event of non-compliance. Such a policy must not of course contravene the requirements of the National Employment Standards (NES) with respect to personal/carer’s leave. Employers also have to ensure that disciplinary action in relation to sick leave matters does not amount to a contravention of a range of laws that exist to protect employees with genuine illness.

Unlawful termination, discrimination and adverse action claims

In dealing with employees who take excessive and/or “suspicious” sick leave, an employer must be mindful of the consequences that they may be faced with if they terminate an employee for that reason.

Under the Fair Work Act 2009 (Cth) (FW Act) an employee whose employment has been terminated on the ground of excessive use of sick leave may bring a claim alleging unfair dismissal or unlawful termination or adverse action. In addition to the provisions of the FW Act, state and federal anti-discrimination legislation applies to such circumstances. Such claims, of course, will be decided with regard to the particular circumstances of each case but the consequences of discriminating against an employee with a genuine illness are potentially very significant for an employer.

Temporary absence due to illness

The FW Act provides that an employer is in breach of the Act if an employee’s employment is terminated on account of the employee being temporarily absent from work due to a “prescribed kind of illness or injury”.

However, it is not a prescribed kind of illness or injury if the illness or injury extends for more than three months or the total absences of the employee within a 12-month period have been more than three months and the employee is not on personal/ carer’s leave for the duration of the absence.

Be proactive to prevent a problem arising

Excessive sick leave needs to be dealt with on a systematic and regular basis; it should not, for example, be on the basis that something needs to be done about a particular employee whose continued absence comes to notice as a consequence of the disruption to the section in which the employee is working as a result of that person’s absence. Sick leave absences of all employees should be reviewed on at least a three-monthly basis. This is not a difficult task in these days of easily generated computer printouts.

Where it comes to notice that a particular employee is considered to have taken excessive sick leave or a pattern is developing as to the days on which the absences are occurring then immediate action should be taken by that employee’s supervisor to discuss/counsel and/or discipline the employee as the situation requires.

If immediate action is not taken and the excessive use of sick leave continues then it could be justifiably concluded that the employer, by not taking such action, had in some sense condoned the absences.

Another good initiative for an employer is to ensure that its employment contracts have a provision to allow the employer to direct an employee to a medical examination, where illness may be significantly affecting an employee’s contribution, or causing a risk to health and safety of that employee and/or other employees.

Without specific contractual entitlement, it is often legally difficult for an employer to compel an employee to submit to a medical examination.

So firstly, it is vitally important that employers have in place a well-defined policy for the taking of sick leave and the processes for dealing with cases of excessive use. Secondly, there needs to be a regular and systematic review of all employees’ sick leave so that action can be taken as soon as it becomes obvious that a particular employee is taking excessive sick leave. Employers should not wait until an employee’s sick leave record is “chronic” but should deal with it at the first signs of a problem developing.

In view of the legislative hurdles to be jumped before an employer can legally terminate an employee on the grounds of excessive use of sick leave, it would be wise for an employer to seek advice before taking such action. All of the members of the Workplace Solutions team of Carroll and O’Dea are well experienced in providing such advice and would welcome any enquiries in this regard.

About the author

Peter Punch is partner, workplace solutions at Carroll & O'Dea Lawyers. For further information visit www.codea.com.au

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