Adverse Action claims available despite lengthy absence from work
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.
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.