The Federal Circuit Court has ruled against an employer who told an employee “I can’t keep your job” because she needed time off to recover from cancer treatment.

After an employee was diagnosed with aggressive breast cancer in 2020, she informed her boss, owner of Melbourne-based retailer Empress Diamonds, that she would need five weeks off to recover from surgery. She alleges that he responded by saying, “I can’t keep your job”, and was subsequently let go.

Understandably distressed by the diagnosis, and further anguished by her employer’s reaction, the employee subsequently took her boss to court for wrongful dismissal. 

When the matter appeared before the Federal Circuit Court last month, judge Karl Blake ruled that Diamond Empress breached adverse action provisions by refusing to allow the employee to take “a lengthy and indeterminate” period of personal and annual leave.

The judge found, however, that the employer did not knowingly breach the employee’s entitlements when it came to providing four weeks’ written notice or payment in lieu, informing the employee of her classification under the award, and paying annual leave loading. The judge noted that the employer took steps to rectify the award breach after her employment.

On these points, Michael Byrnes, partner at Swaab, says “as a general proposition it seems odd that you would say the employer knew about one set of rights but not others”.

The employer is now facing penalties and a compensation bill – the exact amount is yet to be determined.

Before unpacking the judge’s ruling, let’s first dive into the timeline of events.

Employee dealt a heavy blow

A few weeks after the employee informed her boss that she had received a cancer diagnosis, she claims to have suggested he bring a contract worker on board to cover her work load, or have his daughter fill in on a temporary basis, to which the owner allegedly responded: “No, you don’t come back”.

The employee is alleged to have sought clarification by asking, “Are you giving me the sack?” and claims the owner replied, ‘Yes’.

Further, despite the company’s accountant saying the employee had accrued 20 days of annual leave and 15 days of personal leave, the employee claims her boss said to her: “You are getting nothing. I owe you only your weeks’ pay that you have worked up to.”

The employee also allegedly sent an email to the accountant, which said the owner “has just given me the sack because I can’t work because I have cancer”.

The next day, the employee claims her boss asked her to transcribe the following statement for a separation certificate: The employee “can not keep position because of breast cancer treatment and can not hold [the] job after”.

On the employee’s final scheduled day of work, she sent a text to her boss saying she was “unwell today, with having breast cancer and you giving me the sack from my position”.

Empress Diamonds also placed a job ad on SEEK to replace the employee, and the listing made no reference to the position being temporary.

The employer, however, denied dismissing the employee, and said she took advantage of the owner’s vulnerability in having a poor grasp of English.

The judge wasn’t convinced by this argument, stating: “If anyone was vulnerable in the situation as it developed, it was the [employee]” as she was  “the one that was diagnosed with an aggressive form of cancer” and faced major surgery and a “significant period of recovery, time off work and loss of income”.

(Read HRM’s article on how to facilitate a responsible return to work plan for cancer survivors).

Employer in the wrong

Without doubt, the entire situation should have been handled very differently by the employer, says Byrnes.

Terminating a staff member for taking leave to deal with surgery and recovery is, unsurprisingly, a clear breach of the general protection provisions of the Fair Work Act.

“The employer needs to explore ways in which that absence can be managed or addressed, particularly in circumstances where the absence is going to be because the employee is exercising a workplace right to take leave that they have accrued.”

Once the judge found a dismissal had occurred – due to the presentation of evidence including the separation certificate, which made clear a dismissal had taken place, and the job advertisement – he considered the reasons for termination. 

Given the owner had rejected the notion that he had dismissed the employee from the outset, the employer was put in a difficult position, argues Byrnes.

“Where there is ambiguity – i.e. it’s not quite clear if an employee is still employed – that needs to be resolved sooner rather than later. It leaves an employer in a vulnerable position if, down the track, the employee contends that their employment was terminated, and the court accepts the decision for termination.”

“The employer then has to argue a particular reason for termination even though they were disputing the very fact of termination. It’s a messy situation and leaves the employer right behind the eight ball and in a very unenviable position.”

The case also drives home the importance of employers keeping clear and detailed records.

“This is particularly important in general protection matters where there is a reverse onus – i.e. the onus is on the employer to show that the reason for termination for employment was not a prohibited reason – such as the employee exercising a workplace right,” says Byrnes.

“There should be a decision maker who is able to give clear, cogent reasons for what that reason is, and the documentation should be consistent with that reason for termination. That includes the letter of determination and the separation certificate.”

In this case, the documentation supported the employee’s account of events.

In more general terms, providing a reason for termination is paramount.

“An employer who doesn’t give a reason for termination is handing the employee a blank canvas on which to paint a picture as to the reasons for termination. That’s the danger of not giving a clear reason as to the termination of employment.”

On top of that, Byrnes says failing to provide a clear reason indicates the employer hasn’t adequately reflected upon the real reason for letting the employee go.

Understand an employee’s rights

This case presents a prime example of how not to respond when an employee receives a serious health diagnosis. 

Of course, the first response should always be one of empathy and compassion, but what are the subsequent steps to take thereafter from a legal standpoint?

It’s prohibited to terminate a worker’s employment because of illness for three months in any 12 month period.

“That’s an absolute prohibition,” says Byrnes.

“But even if the absence extends beyond that period, then it could be an unfair dismissal in circumstances if the employer is unable to show that the employee is incapable of performing the position for the foreseeable future.”

That is, the employer must be able to provide medical evidence that indicates the employee is unable to perform their usual work tasks, in order for the dismissal to not be classed as unfair.

Though Byrnes acknowledges extended absences can create difficulties for employers, especially small businesses, he says they must look at “alternative resourcing models or staffing models to try and fill the gap rather than simply terminating the employment”.

It’s also not just a matter of the law, but of human decency.

“When you are dealing with an employee who has a very serious adverse health diagnosis, you need to reflect on the manner in which you treat a person in those circumstances. It’s not just about honouring their strict legal rights, but honouring them in a dignified and respectful way.”

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