Legal Framework for Employers: Managing Illness and Injury in the Workplace

A summary of the framework of laws that underpin the management of ill and injured employees in the workplace.


Managing ill and injured employees can be one of the most complicated areas of workplace relations practice.  This article provides a summary of the legal framework that underpins the rights and obligations of an employer who is managing an employee who is suffering a medical condition (whether physical or mental) that affects their capacity for work.


Each case will turn on its own facts.  We recommend you seek legal advice if you require assistance to manage or dismiss an ill or injured employee.


Why is managing ill and injured employees complex?


Several factors contribute to the difficulty of managing ill and injured employees, including:

  • overlapping duties in complex areas of law, including work health and safety, workers’ compensation, discrimination, general protections, unfair dismissal and contract law
  • harmonising the needs of the employee with the business objectives of the employer 
  • navigating discussions having regard to privacy and confidentiality
  • challenges around having sensitive discussions with employees.

Framework of laws


Work health and safety

Employers have duties under the relevant work health and safety laws in their state or territory.  Employers must ensure, so far as is reasonably practicable, that the health and safety of employees (and others) is not put at risk from work carried out as part of the business or undertaking. 


If an employee is injured at work, employers have obligations under work health and safety laws.  Similarly, if an employee’s injury is not work-related, an employer must consider how the illness or injury may impact on health and safety at work. 


An employee who is ill or injured may create a risk to their own health and safety, or that of others.  Employees have duties under work health and safety laws:

  • to take reasonable care of their own health and safety, and to take care that their acts and omissions do not adversely affect the health and safety of other persons
  • to comply, so far as they are reasonably able, with any reasonable instruction given by the employer and cooperate with any reasonable work health and safety policy or procedure.

Workers’ compensation

If an employee’s illness or injury is work-related, they may be entitled to workers’ compensation.  Workers’ compensation laws differ depending on the state or territory. 


Broadly stated, employers:

  • must comply with any return to work obligations under the relevant law
  • may be prohibited from dismissing the employee because of the illness or injury within a period of time (normally up to 52 weeks) of suffering the condition.


An aggrieved employee may make a discrimination claim under commonwealth, state or territory anti-discrimination laws.   Anti-discrimination laws provide protection for employees who are discriminated against by their employers because of an illness or injury that is considered to be a ‘disability’.   The definition of ‘disability’ is broad.


Discrimination can be direct or indirect:

  • direct discrimination is less favourable conduct which is directly based on the disability, with the effect of disadvantaging the employee (or prospective employee).  This occurs where a person is treated less favourably than a person without the disability would be treated in circumstances that are not materially different.   For example, where an employer chooses not to hire a candidate because of their disability.
  • indirect discrimination is where the employer requires or proposes to require the employee (or a prospective employee) to comply with a requirement or condition which, because of the disability, the employee could only comply with if the employer made reasonable adjustments and the employer refuses to do so (or proposes not to do so).  For example, where an employer requires all employees to commence work at 7 am and this is difficult for an employee who struggles to wake up early due to medication taken for a mental health condition.

A defence to discrimination exists where an employer dismisses an employee because they are unable to carry out the inherent requirements of the position in which they are employed, even if reasonable adjustments are provided.  An employer is not required to create a new position for an ill or injured employee.  


An employer is not required to provide an adjustment if this would cause unjustifiable hardship to them.  


Fair Work

General protections

An employer must not:

  • take ‘adverse action’ against an employee (i.e. action that disadvantages the employee) for exercising workplace rights or on the ground of their physical or mental disability.  Examples of workplace rights that may be exercised by an ill or injured employee include making a workers’ compensation claim, taking personal (sick) leave, and raising health and safety issues
  • dismiss an employee because of a temporary absence due to illness or injury.  Generally, an employer should not consider dismissal until the employee has exhausted their paid personal (sick) leave and been absent due to the condition for more than 3 months in a 12 month period.


Unfair dismissal

An employer who proposes to dismiss an employee due to illness or injury must follow a process that involves consultation with the employee, consideration of medical information, and assessment of any reasonable adjustments.


An employer must not dismiss an employee without a valid reason and procedural fairness, or force an employee to resign from their position.


Employment contract

If an employee is employed under a contract there is an implied duty that the employer will take reasonable care to avoid exposing the employee to unnecessary risk of injury. 


Employers should also be aware of situations where promises in a work health and safety policy are incorporated into the employment contract and are therefore express terms of the contract. 


General rule against ‘double dipping’

In general, multiple actions cannot be commenced in respect of the same complaint.  For example, an aggrieved employee cannot bring a discrimination claim against an employer in both the Fair Work Commission and a Human Rights Commission in relation to the same issue.


The workers’ compensation system operates separately, on a ‘no fault’ basis.  A workers’ compensation claim can be brought alongside a complaint in another jurisdiction, even where this deals with the same subject matter. 


Takeaways for employers

  • Implement a clear position description from the outset.  Ensure that the position description accurately reflects the inherent requirements of the job
  • Ensure employment contracts permit the employer to direct an employee to undergo medical examination, if there is doubt about the employee’s fitness for work
  • Train managers to have emotionally sensitive discussions with employees, and to ensure the issues are kept confidential
  • Seek legal advice before dismissing an employee due to illness or injury. 


The information contained in this update is intended as a guide only.  You should seek professional advice before applying any of the information to particular circumstances.  Whilst reasonable care has been taken in the preparation of this update, EmploySafe Legal does not accept liability for any errors it may contain.


Kate Simpson

Managing Director – Employment & Safety Lawyer

+61 420 972 497

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