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    Long Term Illness

    It can be challenging when one of your employees has a long-term illness. You have to balance your concern for their health with the needs of your business. You can neither terminate their employment due to their long term illness nor can you treat them less favourably because of their illness.

    When an employee runs out of paid sick leave and is still unfit for work, they can take unpaid leave in the form of extended sick leave. For at least three months of unpaid leave, or longer if they have lodged a workers’ compensation claim, they may be protected from dismissal. Even after three months of unpaid leave, ending the employee’s employment may still not be lawful. Employers are advised to tread with extreme caution with respect to actions they take, including termination of employment, in these circumstances.

    One safeguard is to have an absence policy. Always treat them in a fair and reasonable way and avoid medical discrimination in the workplace at all times.

    To prevent the risk of an unfair dismissal or general protections claim, it is always recommended to seek expert advice.

    Can you Terminate the Employment of Somebody on Long-Term Sick Leave?

    An employee on long-term sick leave can place uncertainty on the business. You may ask yourself: Will they return to work? And if they do, will they assume the same role as before? Is there enough staff to cover for the absent employee? During this period, it is important to remain calm and not resort to any rash decisions.

    Under the Fair Work Act 2009 it is unlawful to terminate the employment of an employee who is temporarily absent from work due to an illness or injury. An employee may be protected from dismissal during their absence if they:

    • Are absent from work for less than three consecutive months, or for less than three months over a 12 month period, due to an illness or injury.
    • Took either paid sick leave or unpaid sick leave, or a combination of both, during their absence.
    • Provide evidence of their illness or injury

    After three months of unpaid sick leave, an employee may no longer be protected from dismissal. Of course, you must still follow the appropriate rules to carry out the dismissal, and the employee can still make a claim for unfair dismissal.

    Again, employers are advised to exercise extreme caution in these circumstances as there are several issues at play here. There are also several different claims an employee may have access to in the event that the termination of employment does not comply with the relevant pieces of legislation.

    Dismissing an Employee with a Long-Term Illness or Injury

    To reduce the chances of a successful claim against the business, you should consider reasonable adjustments that could be made to allow the employee to return to work.

    You could try to modify or reduce the number of tasks the employee performs in their current role. Or you could offer suitable alternative employment within the company with a role that better fits the employee’s needs. Alternatively, you could negotiate with the employee to set up a flexible working arrangement (e.g. reduce work hours due to ill health).

    If no reasonable adjustments are available, you may have reasonable grounds to commence the dismissal procedure and give the employee their notice of dismissal and final pay.

    Always maintain a record of your attempts to support the employee during the transition period back to work. This information may assist in the event that the company has to face a claim.

    Long-Term Absence Due to a Disability

    Be careful about how you manage an employee absent for a long period of time due to a disability. Section 351 of the Fair Work Act states that you must not take adverse action against an employee (e.g. by terminating their employment) because of a physical or mental disability.

    There are circumstances where may be unreasonable for an employee with a disability to resume employment at your workplace. For instance, if the disability:

    • prevents the employee from being able to fulfil the inherent requirements of their position
    • poses a health and safety risk to the employee and other staff, clients, and customers.

    When an employee with a disability is unfit for their current work, you must consider any reasonable adjustments that could be made to allow the employee to return to work. Any suggestions made by the employee should be considered in depth. Where an employee is not able to perform the inherent requirements of the role, with reasonable adjustments, there may be a valid reason for dismissal and a defence.

    Long Term Sickness Policy

    Keep your employees informed when it comes to long-term sickness with a long-term sickness policy in your employee handbook.

    This guide should set out the expectations and procedures for employees, employers and management to follow. Some of the key information to include is: What is classified as a long-term illness? What evidence do employees need to provide? How much extended sick leave are employees entitled to receive? What is the process for transitioning back into work?

    Make sure your employees read and understand the long-term sickness policy and have them sign a confirmation form.

    Flexible Working Arrangements

    Permanent and regular and systematic casual employees who have worked for the same employer for more than 12 months can request a flexible working arrangement if they have a disability.

    Requests for a flexible working arrangement must be in writing and clearly explain what kind of changes they are asking for, and the reason for these changes. Depending on the specific needs of the employee they can request to change their:

    • Work hours (e.g. reduce work hours due to ill health)
    • Patterns of work (e.g. split shifts or job sharing)
    • Location of work (e.g. transfer to a closer branch or work from home)

    You must respond to a request for a flexible working arrangement in writing within 21 days which states whether you accept or refuse. As an employer you have a right to refuse a request for a flexible working arrangement only on reasonable business grounds.:

    Amendments to Flexible Working Arrangements

    Recent amendments to modern awards have slightly altered the obligations on employers with respect to responding to flexible working requests made by award-covered employees. Employers should ensure they are complying with the new requirements in considering flexible working requests made by award-covered employees.

    Keep in mind you should not simply outright refuse a request for a flexible working arrangement. In your response, outline if there are any aspects of the new arrangement you will agree to – if not, invite the employee to discuss the matter with you in-person, so you can both agree on a working arrangement that keeps everyone happy.

    Need Help?

    Employsure regularly produces resources to support employers and small business growth. To learn about other essential Workplace Policies that are critical to workplaces download our Policies & Procedures toolkit.

    Alternatively, Employsure’s specialists can help you with creating a long-term illness policy, as well as help you manage any specific employee circumstance around long-term illness. Please call our 24 hour Advice Line now on 1300 651 415.

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