*The contents in this blog relates to legislation in New South Wales.

After an injury, it is common for an employer to provide an injured worker with suitable, or light, duties, so that they can continue working in some capacity. Sometimes, if a worker cannot return to their pre-injury role, their employment is terminated by their employer on medical grounds.

Find out the answers to some frequently asked questions about termination of employment whilst on workers compensation in NSW.

Can my employment be terminated when I am on workers compensation?

An employer can terminate a worker’s employment after an injury in certain circumstances.

Under the Fair Work Act 2009, section 352 states “an employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the regulations.”

A prescribed illness or injury under the regulations includes an illness or injury for which an employee provides a medical certificate or statutory declaration within 24 hours after their absence, or, such a longer period as is reasonable. If a worker’s employment is terminated in these circumstances, it may be unlawful.

However, this only applies if an injured worker returns to work within three months, or, is absent from work for a total of three months or less within a twelve month period. Workers who are absent from work for more than three months are not protected under the Fair Work Act 2009 and the regulations.

Injured workers are also somewhat protected under state legislation. Under section 248 of the Workers Compensation Act 1987, an employer of an injured worker who dismisses the worker is guilty of an offence if:

  1. “The worker is dismissed because the worker is not fit for employment as a result of the injury, and
  2. the worker is dismissed during the relevant period after the worker first became unfit for employment.”

The “relevant period” is defined as six months after a worker first became unfit for work (except for in other limited circumstances, set out in section 248). If an employer terminates an injured worker in these circumstances, it may be guilty of an offence. The employer may be prosecuted and/or required to pay a monetary penalty.

Unfortunately, this means that injured workers who are absent from employment for more than six months are not protected from dismissal under either state or federal legislation.  As a result, their employment can usually be lawfully terminated by their employer.

Can I bring an unfair dismissal claim?

In certain circumstances, the termination of an injured worker may also constitute unfair dismissal, and the worker may be able to bring an unfair dismissal claim. A dismissal may be considered unfair if it was harsh, unjust or unreasonable, was not a genuine redundancy and, if a small business, the dismissal was not consistent with the Small Business Fair Dismissal Code. 

Are my workers compensation entitlements affected?

Usually, if an injured worker’s employment is terminated, their workers compensation entitlements remain unaffected. If a worker is being paid workers compensation weekly benefits by their employer, this is taken over by the workers compensation insurer, who will pay the worker directly. The insurer will also continue to pay reasonably necessary medical treatment expenses.

Have you been terminated?

If you have been affected by a workplace injury and want to discuss your rights and entitlements under the workers compensation scheme, please don’t hesitate to contact us on 13 43 63. Our workers compensation lawyers are Approved Legal Service Providers of the Independent Review Office (IRO) and we can apply to have your legal costs funded by IRO.