Fair Work deems employee dismissal for workplace injury unfair

In a recent case, the Fair Work Commission considered a worker dismissed after taking a prolonged absence due to a workplace injury. The employer terminated the worker due to her “continuing incapacity” to perform her role. However, the Commission found both substantive and procedural flaws in the employer’s approach, leading it to conclude that the dismissal was unfair.

The employee worked as a medical receptionist at a health centre in Queensland. In 2020, she was diagnosed with an acute stress reaction, which was brought on by workplace bullying by the centre’s director. The employee began receiving weekly workers’ compensation payments for her psychological injury and was absent from work from August 2020.

In February 2021, the employee received an email from the centre advising that her employment was terminated due to “continuing incapacity to undertake the position”. The employee subsequently filed an unfair dismissal claim with the Fair Work Commission.

The Hearing

The employee submitted that, in circumstances where the centre failed to investigate the extent of her incapacity to work, it had no valid reason to dismiss her. She also asserted that she was never provided with any warning nor notice that she was at risk of dismissal.

The Commission heard evidence that the employee received an unsatisfactory performance review prior to making a claim for workers’ compensation. However, it noted that, even if the dismissal was due to her performance review, there was no evidence to suggest that the employee was warned that she was at risk of termination.

Given the centre failed to communicate with the employee about the expected duration of her absence before deciding to dismiss her, the Commission found that it had no “sound, defensible or well-founded reason” for her termination. Further, the Commission found that the employee was denied procedural fairness, as she was not afforded an opportunity to respond to the reasons for her dismissal.

With this, the Commission was satisfied that the employee was unfairly dismissed. However, it declined to award the employee compensation as she suffered no material loss of income due to her workers' compensation payments.

Key Takeaways

• An employer cannot typically dismiss an employee who is absent from work due to a workplace injury
• An employer should take steps to determine the extent of an employee’s incapacity to work before dismissing them
• Employers must have a valid reason to dismiss an employee – one that is “sound, defensible or well-founded”
• Employers must also show procedural fairness throughout the dismissal process, which includes providing the employee with an opportunity to respond