“My employee keeps taking sick leave and it’s affecting the team, is there anything I can actually do about?”
We regularly hear from frustrated employers who feel like they are constantly dealing with the impact of one employee’s repeated absences. Trying to run a business when employees take excessive time off work is challenging. This unreliability can cause disruption to your operations, put pressure on other staff to pick up the slack and creates uncertainty about whether to hire someone extra.
In Australia, our workplace laws provide strong protections around personal leave. So, before taking any action, it’s important to understand what is lawful, what is risky, and how to address the situation in a way that protects both your business and your legal position.
Prosper Law is here to help you get the best outcome for your business and manage your employees, including when they are absent for excessive periods. Contact us today for a free consultation and no obligation, fixed fee quote for legal services for employers.
What is sick leave and when does it apply in Australia?
Sick leave (or Personal Leave) is a legal entitlement under the National Employment Standards (NES). Full-time and part-time employees are entitled to paid sick leave, while casual employees are not, and it builds up over time.
Section 352 of the Fair Work Act 2009 makes it unlawful to dismiss an employee simply because they are temporarily absent from work due to illness or injury. That said, employers have circumstances where ongoing absences may lawfully lead to termination.
Below, we’ve also included real-world examples showing how this can play out in practice, along with practical workarounds to help you choose the best approach for your business.
My employee has been absent from work for a long time
Trying to run a business when employees take excessive time off work is challenging. This unreliability can cause disruption to your operations, put pressure on other staff to pick up the slack and creates uncertainty about whether to hire someone extra.
As an employer, you do have options to deal with this problem. Before we get into that, I want to touch on two examples that can lead to terminating employment because of excessive sick leave absences from work:
Scenario 1 – Employee is injured at work and has exhausted their leave
An employee was injured outside of work and was on leave for approximately 9 months over a 12-month period. When the employee was at work, they weren’t performing to a satisfactory standard because of their injury. Although the employee had been employed for over 10 years, they had used all of their accrued sick leave.
This meant that for approximately 6 months of the period they were off work, they were on unpaid leave.
At Prosper Law, we advised the employer to double check the employee’s unpaid absences to ensure that the 3-month threshold had been met. Once that was confirmed, the employer was advised to:
- Check whether another suitable role was available within their organisation and, after confirming there wasn’t
- Schedule a meeting with the person to discuss the issues – this was important to avoid the person being surprised
- Step through a discussion process with the person so as to ensure procedural fairness
- If a solution wasn’t feasible, formally end the person’s employment, ensuring that it was clear that the reason for termination was excessive absences from work
Scenario 2 – Employee is suffering from mental health issues
This staff member had taken approximately 12 weeks of unpaid leave. They were suffering from mental health issues which were not connected to work. Over the last year, the person had also stopped coming into the office. They had been working from home and the business owners were concerned the staff member was not doing productive work during this period.
The employer had already had many discussions with this person and this person acknowledged that it was becoming untenable and was impacting their team members.
At Prosper Law, we advised the employer that they still had to wait until three months had lapsed. This is because the prohibition no longer applies after three months and shouldn’t be calculated in weeks. 12 weeks is slightly shorter than 3 months.
It’s important for employers to ensure that the threshold has definitely been exceeded. For the sake of retaining the employee for a few additional weeks, it is worth taking a conservative approach when calculating unpaid time off work.
What do I need to know before terminating
Be proactive in seeking an explanation from the employee
Your employees are protected from dismissal because of a temporary absence from work. However, they still need to provide a medical certificate or statutory declaration to evidence that they are sick or injured or need to care for someone. This evidence must be provided within 24 hours or within a reasonable period of time after the start of the absence.
Evidence should become a focus point if an employee has unexplained absences or there are concerns about whether they can continue to perform the role. We would generally advise employers to be proactive in requesting medical or other evidence to explain the absence rather than passively waiting for the person to provide documents.
Genuinely work with your employee to fix the problem
Don’t adopt a ‘tick box’ approach by simply waiting for the 3 months to expire. Instead, work with your employee to try and understand:
- Why the person is absent from work
- Whether your business can accommodate any adjustments to help the person (this doesn’t mean you have to negatively impact your business)
- Whether you should ask for more detailed medical evidence around the person’s capacity to return to work
If their employment is ultimately ended, your employee will not be taken by surprise, even if there is no ‘fix’ available. An employee that is taken by surprise is more likely to feel aggrieved and this raises the likelihood of them making a legal claim.
The calculation needs to be done carefully
Calculating when the 3-month threshold has been met is a bit complicated. To help, I’ve set out a table that sets out what is included, and what isn’t:
Include when calculating unpaid absence
Do not include when calculating unpaid absence
A period of sick leave that is paid but for which the employee has failed to provide a medical certificate (or statutory declaration) to explain the absence
A period of sick leave that is paid and there is a medical certificate (or statutory declaration) to explain the absence for that period
Periods of unpaid sick or personal leave (regardless of whether there is a medical certificate or statutory declaration to explain the absence
Any other period of leave that is paid (such as annual leave, domestic violence leave, public holidays, community service leave and long service leave)
For partial days worked, that part of the day that was unpaid and for which the employee was absent (for example, if the employee works a 7.5 hour day and was absent for 3.25 hours, half the day is included
Periods where the employee was receiving workers’ compensation payments
Periods of paid sick leave where a medical certificate or statutory declaration was provided more than one month after the absence
Periods of unpaid leave outside a 12-month period
Consider what might create more risk
You need to tread very carefully once a decision is made to terminate employment. This is because although you might no longer be prohibited from terminating your staff member’s employment, this doesn’t mean you have an automatic right to terminate.
We have seen employers misstep by not considering other things that might increase the risk that an employee will make a legal claim. While you might ultimately be successful in defending an unfair dismissal claim or an adverse action claim, you will likely incur legal costs in doing so. There is also the time, effort and stress involved in responding to a formal employee dispute.
You should therefore consider:
- Whether any previous complaints the person has made are likely to be used to argue that that was the reason for the dismissal, and not the absence from work
- The person’s personality: if they have a strong sense of justice, consider they are hard done by, or do not appreciate how their absence impacts your business
If these ‘red flags’ are present, an alternative you may want to consider is whether a deed of release (with a ‘goodwill’ ex gratia payment) is warranted to avoid any disputes.
Frequently asked questions
What if the employee has upcoming paid leave entitlements—does that reset the clock?
If your employee has upcoming paid leave entitlements, this does not automatically reset the clock. The 3-month unpaid absence threshold already excludes periods of paid leave.
It might be that the person hasn’t been absent on unpaid leave in one single 3-month block. However, they may well have accumulated periods of unpaid absences that exceed three months over a period of 12-months.
Can I require independent medical exams before deciding on termination?
Yes, you can ask for more detailed medical evidence and/or a medical examination to determine whether the person is fit to continue in their role. If there is objective evidence to indicate the person cannot return to work in the near future, this will help to legally justify terminating their employment. I also recommend that you, as the employer, cover any costs associated with the medical examination.
How do I handle terminations if the employee is in a unionised workplace?
The involvement of unions often leads to more scrutiny over the accuracy of calculations and whether there is another, prohibited reason for the dismissal. You need to make sure your process is squeaky clean and you have records to justify the dismissal if your business interacts with unions. We, at Prosper Law, can help you with that process.
Are there alternatives like redundancy if the role can't be filled temporarily?
Redundancy is an option for you if the person’s role is genuinely redundant. However, you’re likely to still face the same challenges in that the person can allege that redundancy is an excuse but it’s not the reason for their dismissal. It’s therefore recommended that you don’t proceed with redundancy until you’ve met the three-month rule.
You must then strictly follow a compliant redundancy process so that you can defend yourself against allegations of unfair dismissal or adverse action. If you find yourself in this situation, we strongly recommend that you contact Prosper Law to talk through your options and the best way to go about managing the process.
What happens if the absence is intermittent rather than continuous?
You can rely on the three-month rule for absences that are intermittent (and add up to more than three months over a 12-month period) as well as for continuous absence periods. Intermittent periods of absence can mean the calculating the three months is more difficult and has a greater margin of error.
How soon after the threshold can I initiate discussions without risking claims?
There is no set timeframe for when you can start having a conversation with your employee after the three-month threshold has been met. However, we do recommend that these conversations are had while the excessive absences are accruing. This is important to understand why, demonstrate support for the employee and avoid the element of surprise.
About the Author
Farrah Motley
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