The FWC has settled a key question about injured workers and unpaid leave
Unpaid leave is not a sacking, a Fair Work Commissioner has ruled, but one sentence in an employer's letter came uncomfortably close to suggesting otherwise.
The case centred on Peter Gerber, an employee of Bunbury Drilling Company in Western Australia, who filed a general protections claim alleging he had been constructively dismissed after his workers compensation payments were stopped and he was placed on leave without pay.
Gerber had suffered a workplace injury on 18 February 2025. His workers compensation claim was accepted by GIO, the company's insurer, and he began a return-to-work program on 7 April 2025, working six hours a day, three days a week. During that program, he suffered a second injury.
An Independent Medical Examiner (IME) assessed that the original injury had resolved and found no causal link between it and the second injury. GIO accepted that finding, declined liability for the second injury, and ceased payments to Gerber effective 6 August 2025.
On that same date, the company wrote to Gerber confirming the end of his workers compensation payments. Given medical evidence from his own general practitioner indicating he could not perform all duties, the company also sought a second IME before allowing him to return, even in a modified capacity. Gerber was told he could access his remaining paid leave entitlements. Those ran out by 2 September 2025, after which he was placed on leave without pay.
Gerber argued the 6 August 2025 letter effectively sought to terminate his employment. He further alleged that the company's involvement with GIO and the IME, which resulted in his second workers compensation claim being denied, amounted to constructive dismissal.
Commissioner Schneider, sitting in Perth, disagreed. In a decision handed down on 9 March 2026, the Commissioner found that neither seeking a second IME nor placing Gerber on unpaid leave constituted a dismissal. It was, the Commissioner found, entirely reasonable for the company to request further medical clearance before returning an employee to the workplace, and equally reasonable to move him to unpaid leave once his entitlements were exhausted.
One line in the letter, however, attracted scrutiny. The company had written that "we understand that GIO may be exploring a potential settlement offer, which could assist with financial support, continued treatment and enable you to consider future work opportunities outside of BDC." The Commissioner acknowledged this "may have created confusion" about Gerber's employment status, but found it fell short of evidence that the company intended to bring the relationship to an end.
Notably, Gerber had continued to lodge timesheets throughout the period and confirmed before the Commission that he had not resigned. Both parties agreed there was no evidence that Gerber had resigned from his employment at all — meaning the forced resignation limb of the dismissal definition was simply not engaged.
The Commission upheld the company's jurisdictional objection and dismissed the application.
For HR leaders managing employees on extended medical leave, the case confirms that seeking a second IME and transitioning a worker to unpaid leave after entitlements are exhausted are both defensible actions under the Fair Work Act 2009. What the case also illustrates is that correspondence with injured employees carries real legal weight. A single sentence referencing settlement offers and opportunities outside the company was enough to prompt a Commissioner to question the employer's intentions, even if it did not ultimately change the outcome. The language used when managing an absent or injured worker deserves the same level of scrutiny as the actions themselves.
