Adverse Action claims avail­able despite lengthy absence from work

In Brief

The Fed­er­al Cir­cuit Court has dis­pelled any lin­ger­ing doubts as whether or not employ­ers can safe­ly ter­mi­nate employ­ment fol­low­ing a lengthy absence from work, and with­out poten­tial­ly fac­ing dis­crim­i­na­tion claims aris­ing from the termination.

The Facts

This issue arose in the con­text of ter­mi­na­tion of an absent employ­ee, a Mr McGar­va, who had been seri­ous­ly ill for some time with the diag­no­sis of grade 4 stom­ach and liv­er can­cer. The employ­ee kept his employ­er informed as to his ill­ness and his progress. Hav­ing been absent from work for around 10 months (the lat­ter part on unpaid leave), Mr McGar­va indi­cat­ed by email, that he was look­ing to return to work 2 to 4 weeks later.

His employ­er Eng­house Aus­tralia Pty Ltd, respond­ed by serv­ing him with a let­ter of ter­mi­na­tion. The ter­mi­na­tion let­ter gave as a key rea­son for ter­mi­na­tion, Mr McGar­va’s ​“extend­ed leave of absence”.

Mr McGar­va brought an ​“adverse action claim” under­pinned by the propo­si­tion that the ter­mi­na­tion was due to the employ­ee’s phys­i­cal disability. 

Judge Dri­ver of the Fed­er­al Cir­cuit Court of Aus­tralia deter­mined that a thresh­old issue need­ed to be deter­mined before fur­ther pro­ceed­ing with the adverse action claim. That thresh­old issue con­cerned the rela­tion­ship between Sec­tion 352 of the Fair Work Act and Sec­tion 342(3)(a) of the Act. 

Sec­tion 352 of the Act essen­tial­ly pro­hibits an employ­er from dis­miss­ing an employ­ee because they are tem­porar­i­ly absent from work due to ill­ness or injury (of the kind pre­scribed by the Reg­u­la­tions). Loose­ly stat­ed, under the Reg­u­la­tions an ill­ness or injury may not (depend­ing on the cir­cum­stances) be pre­scribed, if it extends for more than 3 months. In this case, the peri­od of absence was around 10 months. 

Sec­tion 342(3)(a) of the Act essen­tial­ly excludes from the mean­ing of ​“adverse action” any action which is ​“autho­rised by or under the Act”.

It might be observed that sec­tion 351 of the Act address­es the bring­ing of an adverse action claim based on discrimination.
The ques­tion for deter­mi­na­tion by Judge Dri­ver was, whether because at the time of the dis­missal the employ­er was not pro­hib­it­ed from dis­miss­ing the employ­ee under Sec­tion 352 of the Act, such action was autho­rised by or under the Act and as such was exclud­ed from ground­ing any adverse action claim.

Judge Dri­ver deter­mined that the mere fact that an action (in this case dis­missal) might be autho­rised under Sec­tion 352 of the Act and Reg­u­la­tions, does not car­ry any impli­ca­tion in rela­tion to bring­ing an adverse action claim under Sec­tion 351 of the Act. A dis­missal may be autho­rised due to a peri­od of absence but it may also still con­sti­tute an unlaw­ful dis­missal under the Com­mon­wealth or State anti dis­crim­i­na­tion legislation.

This ini­tial point hav­ing been dealt with the mat­ter was then referred for medi­a­tion which, if unsuc­cess­ful, would result in the mat­ter pro­gress­ing to a final hear­ing.

Impli­ca­tions for employers

The above case high­lights to employ­ers that the mere fact that more than 3 months may have elapsed since an employ­ee left their employ­ment due to ill­ness (and the Reg­u­la­tion oth­er­wise sat­is­fied), is not going to deprive a ter­mi­nat­ed employ­ee from being able to bring an adverse action claim in rela­tion to dis­crim­i­na­tion aris­ing from the ter­mi­na­tion. At best, all that an employ­er may achieve by wait­ing the required peri­od of time (and oth­er­wise sat­is­fy­ing the Reg­u­la­tions) is to avoid a ded­i­cat­ed adverse action claim being brought for ter­mi­na­tion dur­ing a tem­po­rary absence due to ill­ness or injury.

Employ­ers should there­fore tread care­ful­ly in mak­ing any deci­sions around ter­mi­na­tion of ill or injured employ­ees and be com­plete­ly sat­is­fied that they have fol­lowed appro­pri­ate process­es and pro­ce­dures which estab­lish the nature of the ill­ness or injury, its diag­no­sis and prog­no­sis and the cir­cum­stances of if, when and on what basis, that employ­ee might be able to return to work. In par­tic­u­lar, whether the employ­ee will be able to ful­fil the inher­ent require­ments of the posi­tion if they return to work.