Managing Long-Term Sickness Absence

We are often asked for advice by clients about how best to handle long-term absences when employees are on sick leave or absent due to a workers compensation claim. Some of the advices are related to if they are able to, and how best to possibly terminate an employee who has been absent due to illness or injury. Failure to properly and prudently manage a long-term absence or indeed the termination could result in the employer being exposed to an unfair dismissal claim, discrimination claim or a general protections claim.

In essence, there are a number of stages to managing an employee’s long-term sickness absence:

•          managing the employee’s absence from work;

•          managing their return to work; or

•          termination of employment.

An employee’s absence should be managed proactively with the primary aim of supporting the employee and facilitating a return to work as soon as possible.

To achieve this, the employer should regularly review:

•          the employee’s length of absence;

•          state of health;

•          readiness to return; and

•          whether anything can be done to facilitate a return. 

This should be done in discussion with HR, rehabilitation providers (if applicable) and, where appropriate, the absent employee.

Maintaining Contact with the Employee

Employers should take positive steps to keep in touch with the employee, so that an employee on sick leave knows the employer is interested in his or her health and wellbeing, and that support is available.

Once an employee has been absent for a week and there is no indication that they are likely to return to work, the employer should write to the employee indicating a desire to maintain contact and asking the employee whether he or she would prefer telephone contact, email communication or a combination of these. Thereafter, we would suggest weekly contact be maintained with the employee.

The employer should indicate that this contact is as a result of concern about the employee’s welfare and progress and in order to offer any support that is reasonable and practicable.  Keeping in touch personally will also allow the employer to keep up-to-date with the employee’s state of health and progress and his or her perspective on the likelihood of a return to work.  This in turn will allow the employer to organise temporary cover more effectively.

In the event that the employer is unable to make contact with the employee, the employer should seek to contact the employee’s next of kin.

The employer should keep a record of all contact made with the employee and details of any conversations.

Obtaining Medical Advice

Once the employee has been absent from work for approximately 2 months and there is no indication that they are likely to return to work, the employer should begin the process of obtaining their own medical advice. An employer may wish to start this process sooner if there is some doubt about whether the employee is being genuine about their condition.

Firstly, the employer should write to the employee and request permission to approach the employee’s treating doctor to ascertain directly the effects of the condition, the likely duration of the condition and whether or not there are any steps that the employer could take to facilitate the employee’s return to work.    If the employee refuses, then the employer should request the employee attend an independent medical examination (IME) to determine these matters. 

Where an employee does not consent to an IME it may be necessary for the employer to make decisions without the benefit of further information.  On receipt of the Occupational Health assessment the employer should consider it carefully with a view to identifying what specific further actions should be taken.

If the employer believes further medical information is required from an employee’s own doctor, specialist or consultant, they should speak to the employee in the first instance.  Employers should be aware that the Access to Medical Reports Act 1988 places certain restrictions on employers that wish to obtain medical information about employees from their own doctor and also gives individuals a range of rights in relation to any such medical report.

Managing the Employee’s Return to Work

Once the rehabilitation provider or the employee’s doctor or specialist has indicated that the employee may soon be ready to return to work, the employer should consider the steps that might reasonably be taken to support the employee’s return.  The employer should take account of the doctor’s advice which could help to identify any appropriate steps that the employer could take to help the employee return to work, which might include:

  • Checking if the employee is still taking any medication and whether or not there are any likely side effects, for example drowsiness;
  • Considering a phased return to work and discussing the options with the employee (and rehabilitation provider where appropriate);
  • Discussing with the employee (and rehabilitation provider where appropriate) whether he or she will be fit to perform all the duties of the job or whether some adjustments may need to be made;
  • Discussing the employee’s capabilities with him or her, either when the employee returns to work or just prior to this, and reviewing if any special arrangements or support need to be provided initially;
  • Planning to give the employee meaningful work to do so that he or she quickly feels useful;
  • Making sure that the employee is not overloaded with work or faced with a mountainous backlog;
  • Advising the employee what support will be available during the first weeks or months after his or her return, and how progress will be monitored;
  • Consider arranging for one of the employee’s colleagues to act as his or her “buddy” for a period, taking responsibility for helping the employee with any difficulties in the first few weeks after his or her return;
  • Actively monitoring the situation for a period of time to make sure that the employee is coping adequately with the day-to-day work and its associated pressures.

In essence, ideally the employer should be doing all that is reasonably possible to ensure a smooth transition back into the workplace, and to try and ensure that there is no exacerbation or aggravation of the illness or injury. This is particularly so in cases of mental illness.

The employer should take into account that the employee may feel very anxious about returning to the workplace after a long absence and may be worried about how he or she will be perceived and treated by colleagues and management. Again, this may be a particular concern if the employee’s absence was the result of a mental illness.

It will therefore be extremely important for the employer to take positive steps to make the employee feel comfortable and facilitate their reintegration into the workplace.

Phased Returns

Phased returns can be implemented to help facilitate an employee’s return to work after long-term sickness absence.  Legally, it could constitute a “reasonable adjustment” that an employer must make and, in practice, a phased return can be beneficial for both the employer and the employee when trying to achieve a successful return to work.

A phased return to work will not be suitable in every situation.  The premise of a phased return is that the employee is well enough to carry out some work, and is likely, given time, to recover sufficiently to return to their previous role (or previous role with some adjustments).  Where the employee is not capable of any work, the question of a phased return will not arise.

A phased return to work should be based on medical advice, either in a medical clearance from the employee’s doctor, or in a rehabilitation assessment.  In the case of a medical clearance, in addition to ticking the “phased return to work” box, the doctor is required to provide details of what the employee is or is not capable of doing.  If a phased return is recommended on a medical clearance, the employer should always seek advice from the rehabilitation provider in the first instance.

In the event that a phased return has been recommended and is supported by doctors or rehabilitation providers, the employer should discuss the following with the employee:

  • When the phased return is to start;
  • With what work and hours the employee will start the phased return;
  • At what location the employee will start the phased return (e.g. at home or in the workplace);
  • Whether or not there are any other changes to the working arrangements that might need to be made (e.g. a special chair or computer equipment to help support an employee with a disability);
  • What changes in work, hours and/or location are thereafter expected to occur, and when they are expected to occur;
  • What arrangements will be put in place to monitor the employee’s progress and any difficulties;
  • What will happen to the employee’s pay during the phased return to work; and
  • To whom the employee should report if he or she has any difficulties with the arrangements.

Arrangements should take into account the individual circumstances and addressed on a case by case basis.  However, a phased return should normally be for a period of no more than about six weeks on full pay.

At the end of a phased return, if an employee is fit for work but does not feel ready or able to resume their full contractual hours, he or she may wish to consider the following options:

  • To reduce his or her contractual hours on either a temporary or permanent basis, with an associated reduction in pay;
  • To take annual leave either in one block or staggered over a period of time; and/or
  • To take unpaid leave.

There is no guarantee that a request for a reduction in contractual hours, annual leave or unpaid leave will be agreed to.  Before making a decision, the employer will need to consider the impact on service, budgets and colleagues.

Termination of Employment

An employer must not dismiss an employee because they are “temporarily absent” from work for a prescribed kind of illness or injury (s352 Fair Work Act 2009 (Cth)).

It is not a ‘temporary absence’ if an employee’s absence 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 paid sick leave for the duration of the absence. (Reg. 3.01 of the Fair Work Regulations 2009)

This means an employee who takes a period of sick leave that is paid sick leave for the entire period is protected from dismissal regardless of how long they are on leave.

After the three month period has elapsed and the employee’s sick leave is exhausted, the employer may terminate the employee’s employment, provided there is a valid reason to do so. Examples of a valid reason may include the employee’s inability to perform the inherent requirements of the job and where a reasonable redeployment is not available. So, it is advisable to obtain medical advice from the treating doctor or specialist as to whether or not the employee is likely to return to pre-injury duties in the foreseeable future, prior to terminating an employee.

Despite this, employees may still challenge the termination of their employment by:

•          making an unfair dismissal application if the reason for the dismissal is harsh, unjust or unreasonable

•          making a general protections claim if the reason for the dismissal is another protected reason, or

•          making a claim for discrimination.

Another factor to consider is that State and Territory workers compensation legislation can also prohibit an employer from terminating an employee within a specific period of time from when an employee suffers a workplace injury. For example, in NSW, it is an offence to dismiss an injured employee within six months of incapacity.

In conclusion, employers should exercise extreme caution when seeking to terminate an employee for long-term sickness absence and should always seek legal advice prior to doing so. Also, it is prudent to ensure that any decisions that are made should be based on medical reports and advice and not to make decisions based upon assumptions or suspicions.




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