An employee was recently awarded nearly $30k after he was dismissed for allegedly falsifying an illness. What went wrong for the employer in this case, and how should HR address suspected misuse of sick leave?

Access to paid sick leave plays a critical role in maintaining workforce wellbeing, and is something every employee will rely on during their career.

But what should employers do if they suspect an employee is abusing sick leave entitlements?

This dilemma was explored in a recent case heard by the Fair Work Commission (FWC).

The employee in this case, a senior supervisor at a waste management company, was abruptly terminated in October last year on the grounds that he had failed to adequately communicate with his employer during a six-week period of sick leave.

During the employer’s cross-examination in the FWC, the employer admitted that it suspected the manager of falsifying his illness, despite the fact that he provided valid medical certificates stating he was unfit to work during his six weeks of absence. 

Taking into account the fact that the conceded reasons for the termination did not align with the reason given to the employee in the termination letter, the short timeframe in which the dismissal occurred, the fact that the employee was dismissed without notice and the employee’s eight years of unblemished service, the FWC found the dismissal unfair. 

As a result, the business has been ordered to pay the employee $28,443 (plus superannuation) in compensation.

“[A key lesson] from this case is that if you’re dealing with a situation like this, you should be clear and specific about what you’re saying rather than [hiding it] in shades of grey. It’s always better to have the direct conversation,” says Chris Hill, Principal at Onside Law.

“In this case, the direct conversation could have been saying, ‘We want you to provide more information or to send you to another doctor, because we do not have enough information about what is going on.’”

How far can employers go to verify sick leave?

Employers have the right to ask for evidence when an employee takes sick leave, but how far can they go in investigating whether an illness is genuine?

“If you’re [an employee] on paid sick leave, under the Fair Work Act, you’ve got an obligation to provide evidence that would satisfy a reasonable person that you need to take paid sick leave,” says Hill.

In many cases, a simple valid medical certificate stating incapacity to work will suffice as evidence.

“Sometimes, when it’s just one or two days, employers might not bother with a medical certificate. But even then, if it’s happened a few times [or for a long period], you’re entitled to say to the employee that next time they’re sick, they need to give you a medical certificate.”

In cases such as the one above, where an employee has taken an extended period of sick leave and has not provided sufficient information, employers are entitled to investigate further.

“If you’re not satisfied with the responses, then you’d start [looking to] gather more information.”

There are a few different ways you could do this, he says.

“You could ask the employee if you can speak to their doctor, or give the employee a letter which they take to their doctor that has a series of questions like, ‘How long do you think this illness is going to last?’ or ‘What support will they need when they’re better?’. Another option is to send them to a doctor arranged by the company, [known as] an independent medical expert, or IME.”

If an employee refuses to provide additional information or engage with an IME, the employer may have grounds to initiate a disciplinary process.

“When employees are disengaged with work, absenteeism goes up. It’s sometimes the beginning of the end of an employment relationship – but it’s definitely on the employer to get [that process] right.”  – Chris Hill, Principal, Onside Law

While the employer in this case may have had grounds to request more information about the employee’s illness, it tripped up by acting too quickly and making a decision based on an unsubstantiated suspicion. 

What’s more, the employer cut off the employee’s paid sick leave two weeks before his termination, which contributed to the dismissal being deemed unfair.

“It feels like the employer got engaged with this idea that he was lying, and it snowballed from there,” he says. “The FWC in this case was critical of the fact that the whole process, from him submitting the first medical certificate to his dismissal for serious misconduct, only took six weeks.”

How to respond to suspected abuse of sick leave entitlements

The debate in this case centred around the legitimacy of a single, long-term period of sick leave. 

However, a situation employers may find themselves in more often is managing an employee who habitually takes shorter periods of sick leave without a legitimate reason for doing so.

“You may have an employee who’s off every few Mondays after the weekend or after public holidays, and you’re starting to see a pattern,” says Hill. 

“You might also be consistently getting the same medical certificate, or medical certificates from lots of different doctors, because sometimes a doctor won’t do repeat ones all the time.”

Read HRM’s article on what to do when an employee runs out of sick leave.

In cases like these, Hill recommends approaching the employee, mentioning that you have noticed a pattern in their sick days, and explaining that in order to plan for the business’s needs, you require more information from their doctor about their capacity to work.

Just as in cases of long-term sick leave, employers are entitled to request more information or direct an employee to see an IME when a pattern of short-term sick leave arises, and failure to cooperate can be grounds for disciplinary action.

However, Hill stresses that the disciplinary process should be undertaken slowly and carefully, and dismissal should ideally only be considered after the employee has been absent from work for a total of three months or longer.

The Fair Work Act prohibits an employer from dismissing an employee due to a temporary absence from work due to illness or injury if the absence does not exceed three months (either consecutively or cumulatively over a 12-month period), he explains.

After this period, an employer may be able to dismiss an employee on the grounds that they cannot perform the inherent requirements of their role.

“I’d generally recommend against dismissing an employee for the reason of their illness or absence from work until you have gone past that three-month period. And once you’re outside of that period, you have to be mindful of discrimination law, which states that it may be permissible to dismiss someone for an illness or a disability if it affects their ability to perform the inherent requirements of the job.”

Termination should not be seen as the first or only choice in cases like this, he adds.

“You can always try and resolve a matter amicably with an employee. You can sit down with the employee and have an authentic and empathetic conversation and ask, ‘Why is this happening? Are you not happy here?’. And it might come out that actually they’re not happy, and hopefully you can reach a mutual resolution or solution to fix the problem.”

Ultimately, consistent absenteeism is often a symptom of the problem rather than the problem itself.

“When employees are disengaged with work, absenteeism goes up. It’s sometimes the beginning of the end of an employment relationship – but it’s definitely on the employer to get [that process] right.”

All information, content and materials available on this site are for general informational purposes only. The contents of this article do not constitute legal advice and should not be relied upon as such.

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