Making employees on workers compensation redundant

Q&A

Making employees on workers compensation redundant

There are laws protecting employees on workers compensation from dismissal for specified periods of their incapacity, but how do these provisions sit with genuine redundancy situations that would otherwise apply to these employees.

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There are laws protecting employees on workers compensation from dismissal for specified periods of their incapacity, but how do the provisions sit with genuine redundancy situations that would otherwise apply to these employees.
 
This question has been put to WorkplaceInfo.
 
Because of a downturn in our business, we will have to make a number of employees redundant. One of the employee’s whose position will become redundant is currently absent on workers compensation.
 
We have been told that an employee could claim unlawful dismissal because there is a prohibition on terminating an employee who is absent due to illness or injury.
 
Because the company is located in New South Wales, we have also been told there is state legislation that prohibits the dismissal of an employee absent on workers compensation.
 
Can we dismiss this employee because the position is redundant or are we obliged to keep the employee on our books?
 
The protections referred to in your question only apply if the reason for the dismissal is based on the employee’s absence from work on workers compensation.
 
If the reason for the dismissal of this particular employee is due to the position no longer existing, provided the selection criteria used by the company in determining which employees would be dismissed was based on an objective test, the dismissal could proceed.
 
The employee’s absence on workers compensation could not be used as a reason to justify their selection for redundancy, however, the employee’s absence because of injury is not a protection from dismissal if the employee’s performance or work capabilities are not as favourable when compared on objective grounds with other employees being considered for redundancy.
 
Federal and state legislation
 
Both the federal Workplace Relations Act and, in the case of NSW employees, the Workers Compensation Act, provide protection from termination where the reason for an employee’s dismissal is due to their absence on workers compensation.
 
In the case of other states and territories, however, there may be some prohibition of termination of an employee’s employment under the relevant state or territory workers compensation legislation; therefore, reference should be made to the relevant workers compensation legislation to determine whether an employee can be dismissed while absent on workers compensation.
 
Source: Paul Munro, IR Consultant.
 
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