I’ve noticed a concerning trend lately and hearing about numerous cases of employees having their employment terminated or threatened subsequent to workers’ compensation claims being submitted. Often this occurs whilst the employee is still within their probation period. Unfortunately, it seems some employers may not understand their legal obligations correctly. Whilst employers are protected from unfair dismissal complaints whilst an employee is on probation, they are not protected from unlawful dismissals – and there are some important provisions under legislation to be aware of.
Why is terminating an employee on workers’ compensation problematic?
Now I am not a lawyer and don’t profess to be an expert in industrial relations and workers’ compensation law – so it’s always good to get professional legal advice. Nevertheless, I thought I would draw attention to the fact that workers’ compensation laws around Australia do stipulate that an employer may not terminate an employee due to a compensable illness or injury, and these protections tend to stretch for 6 to 12 months after the date of illness or injury.
This is certainly not straightforward…
If there is a legitimate need to terminate that’s not due to the injury, such as the employee engages in significant misconduct, or the business is going through a restructure and redundancy process, then it is likely lawful to proceed. Assuming the usual requirements under Fair Work are adhered to.
But if the issue is frustration with an employee’s absence from work and the operational impacts of this, or the employee is not able to perform their usual duties or has reduced capacity to perform due to their illness or injury, terminating their employment could lead to liability for an unlawful dismissal claim.
Does termination of employment result in workers’ compensation entitlements ceasing?
In short, no. If an employee is terminated whilst on workers’ compensation, they will continue to be compensated as per standard process for the insurer. So, if a doctor continues to assess the worker as having no or limited capacity for work, they will likely be eligible to continue to receive payments beyond the termination of their employment.
Other consequences of terminating or failing to support ill or injured workers
The experience of a work-related injury is often a very difficult time for employees. I haven’t yet worked with an employee that isn’t motivated to get back to work of some kind. However, any threats of termination, adverse action, or lack of support and flexibility usually sees the employee becoming increasingly uncomfortable and resistant to returning to work with their employer. This doesn’t of course mean they don’t want to work at all… just that the employee/employer relationship has been damaged. This may unnecessarily lengthen the employees time away from work or to fully recover, which is does not serve the interests of the organisation or the employee.
Negative organisational and leadership sentiment regarding an injured worker may also negatively influence the opinions and perspectives of team members if they are exposed to this. This could lead to team members becoming increasingly hostile, resentful, unsupportive, and unwilling to work with an employee requiring adjustments to their work. This all around makes the rehabilitation and return to work process harder, and likely to reinforce managerial beliefs that termination would be an easier path forward.
Lack of support, communication, and consultation regarding return to work is likely to delay the worker’s return, and the longer they are away, the less likely they are to return. But employers should be aware – this is not a good reason to ignore an injured or unwell worker. Engaging in poor rehabilitation and return to work practices and failing to respond to any health and safety issues raised through a claim is likely to increase risks of non-compliances and further legal issues.
What actions can be taken to facilitate positive relationships and support a return to work?
Recent Australian research demonstrated some of the most significant and frequent barriers to return to work included related factors of anxiety, fear-avoidance, and worry (Brough et al., 2021). At times, such anxiety is related to fear of failure on return to work, concerns about exacerbating physical and psychological injuries, and worries about reduced capacity to perform effectively. However, I regularly discuss concerns with clients about: perceived lack of support from managers; concerns that organisations don’t care about factors that have negatively impacted them and ultimately resulted in their injury; fears of reprisal for having raised issues; anxiety about being forced out of the job; and anxiety about working with managers they feel they cannot trust and speak openly with.
The reality is, whether it is intended or not, actions (or perhaps importantly lack of action) taken when a worker is off work may result in negative beliefs, hindering recovery.
In order to avoid this becoming the case, here are 5 key tips to enable a positive return to work:
Engage in supportive and appropriate contact – reach out to workers early after a claim for compensation has been made. Determine appropriateness of contact with the employee and discuss with them how often you will check in. If the employee is experiencing high degrees of stress and doesn’t want to be contacted, consider an appropriate third party to maintain contact through. Keep the employee up-to-date on anything important happening at the workplace that may affect their job, ensure they retain access to important information, such as emails and information about pay and entitlements (as is required by Fair Work), and consult on the level of information and updates they would like to receive. A key objective here is to ensure the employee feels they are valued, part of their team, and haven’t been forgotten.
Boost self-efficacy and confidence – employees often have concerns about undertaking work subsequent to injury or illness, managing their work demands, performing effectively, and avoiding re-injury. Engage positively and optimistically with the employee, encourage them to see that having reduced work capacity is not the same as being less competent or capable, and reassure them that all possible supports will be put in place to ensure their success at work.
Consult on return to work plans – ensure collaboration on a return to work plan, seeking employee input and involving necessary stakeholders (including the advice/opinion of treating practitioners that can comment on work capacity). Employees should feel they are part of the decision-making process have opportunities to provide feedback on what would enable them to return to work. Note that at times employees may look to HR and WHS personnel for their expertise on what adjustments are possible and what may alleviate concerns they have. Don’t expect the worker to be an expert on how to manage the causes of their injury, as this may be complex and require specialist knowledge.
Ensure a supportive, collegiate environment – if necessary, and within the boundaries of privacy and confidentiality, engage colleagues in supporting an employee on return to work. Short-term adjustments may result in other team members having to take on tasks they wouldn’t ordinarily be responsible for. Ensure they have enough information to understand why this is important, and that the team around the injured worker is set up to perform effectively.
Provide reassurance of fair treatment – employees may feel vulnerable and insecure after having made a compensation claim, worried that will be mistreated or adversely impacted. Be open and let them know what to expect, remind them of their rights and protections, and remain positive about the goals and objectives of return to work.
Need support?
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Further helpful reading
Brough, P., Chan, C., Wishart, D., Spedding, J., & Raper, M. (2021). Psychological response to injury: Research to support workers’ psychological responses to injury and successful return to work. Retrieved from https://www.safeworkaustralia.gov.au/resources-and-publications/research-support-workers-psychological-responses-injury-and-successful-return-work
Casey, T., Hu, X., Lee, Q. Y., & Carden, C. (2021). Stigma towards injured or ill workers: Research on the causes and impact of stigma in workplaces, and approaches to creating positive workplaces cultures that support return to work. Retrieved from https://www.safeworkaustralia.gov.au/doc/research-causes-and-impact-stigma-workplaces-and-approaches-creating-positive-workplace
Office of Industrial Relations, Queensland Government (2016). Guidelines for standard for rehabilitation, second edition. Retrieved from https://www.worksafe.qld.gov.au/__data/assets/pdf_file/0029/25688/guidelines-for-standard-for-rehabilitation-second-edition.pdf
Fair Work Ombudsman. Ending employment during workers’ compensation. Retrieved from https://www.fairwork.gov.au/employment-conditions/workers-compensation/ending-employment-during-workers-compensation
Fraser, C. (2016). Terminating an employee on workers’ compensation. AiGroup, December 1. Retrieved from https://www.aigroup.com.au/resourcecentre/resource-centre-blogs/hr-blogs/terminating-an-employee-on-workers-compensation/
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