Managing the return of employees with long-term injuries or illness

Managing employees with long-term ill health is one of the most challenging tasks for an HR professional and an employer. It is not much fun for the employee either.

More than half a million Australians sustain work-related injuries or diseases annually at an estimated economic cost of AU$68.1 billion. Australia's workers compensation system alone bears direct costs of AU$9 billion per annum through income support, treatment and rehabilitation, and lump sum payments (ref: National Return to Work Strategy 2020-2030).

Managing long-term ill health claims and endeavouring to return employees to work requires employers to understand the legislative protections for employees at both federal and state level, the legislative obligations of employers, the employee's enterprise agreement, modern award and/or contract of employment, and the employer's policies and procedures.

COVID-19 has added uncertainty and changed work practices of employees which impact upon the skills necessary to return an employee to work. These add to the complexity of return-to-work programs to ensure they are reasonable in the circumstances of today's workplace culture.

An employer should approach long term absences due to illness or injury on the premise that it does not wish to terminate the employment of an employee and it will endeavour to act reasonably to ensure that this does not happen. It is not a case of going through the motions towards dismissal but to act reasonably and to consider all alternatives short of dismissal.

A key consideration is whether the injury or illness is due to a work-related or a non-work-related issue.

If it is a matter that is covered by workers compensation, then there will be different rules concerning the obligation to keep open a job of an employee for a period of time from when the injury occurred. Nor should an employee who has clicked over that period under workers compensation law be subject to immediate termination, as it is not an invitation to do so.

Of course, if termination does occur past the period where the job has to be held open, then that won't end the employer's workers compensation obligations. If an employee is not at work because the employment has been lawfully terminated, then it may be more difficult to end the compensation payments. The costs of a long period of workers compensation payments are ultimately borne by the employer.

Obligations of an employer to assist a worker to return to work

Workers’ compensation legislation across the country outlines compensation entitlements for work-related injuries and focuses on the management of work-related injuries with a view to successfully returning workers to work.

The employer's return-to-work responsibility to injured workers includes:

• developing and implementing a return-to-work plan
• providing an offer of suitable employment if the worker has some capacity for work but cannot return fully to their normal role
• supporting and monitoring the worker when they return to work.

While each state and federal workers’ compensation scheme operates differently, the general principles are the same, being that if a claim is accepted then the regime requires where possible efforts be made to develop a return-to-work plan so the worker can return to work either in a full capacity or in a partial capacity.

Where a return-to-work plan under the workers’ compensation system has been reasonably proposed and is rejected by an employee, that can lead to the termination of the compensation payments if the employee has acted unreasonably.

Legislation also provides a period during which the employer is prevented from terminating the employment of a worker related to their illness or injury. The time period varies depending on the scheme, but, for instance, in New South Wales it is 6 months (ref: s248B Workers Compensation Act 1987 (NSW)) and in Victoria (ref: ss96 & ss103 Workplace Injury Rehabilitation and Compensation Act 2013 (Vic)) and Queensland it is 12 months (ref: s232B Workers Compensation and Rehabilitation Act 2003).

There is a difference between a work-related injury or illness which the workers’ compensation system manages and an injury or illness which is unrelated to work but which impedes the worker from performing the full set of their duties or working at all.

Even where the injury or illness is not work related, an employee has the right to come back to work if they have partial capacity to do so. Where an employer refuses a request for an employee to return to work on a partial basis due to an illness or injury without justification, then such conduct could give rise to a discrimination claim during employment. The fact of an injury or illness does shift the obligations on an employer to act reasonably in endeavouring to accommodate an employee returning to work where they have been temporarily injured or temporarily ill.

The test as to whether a return-to-work plan that is sought by an employee is reasonable, is a test of whether it creates an unjustified hardship for the employee to return to partial duties or perform suitable temporary duties. An employer must act promptly in dealing with a return-to-work proposal to avoid liability for discrimination.

Managing a return to work

Employers have a legal obligation to support ill and/or injured employees returning to work in a safe and suitable manner. Specific obligations will differ in each state and territory, as the governing authority within varies. However, obligations generally commence once a workplace injury claim has been made and the employer is advised of this.

Broadly, planning a return to work requires employers to consider:

• nominating a 'return-to-work' contact for the employee to liaise with and having clear communication of return-to-work arrangements
• obtaining information about an employee's capacity and considering options for suitable employment
• considering reasonable supports, aids or modifications to be made to enable the employee to perform work
• setting clear and realistic expectations of the returning employee and monitoring their progress, and
• consulting directly with the employee, and their treating practitioner if consent is provided, about their health.

It is imperative that employee information be kept private and confidential during the return-to-work process. It also may be worth considering how the management of underperformance or disciplinary processes for a returning ill and/or injured employee may need to be altered to ensure the employee is appropriately catered for.

Importantly, financial penalties may apply where employers fail to comply with their return-to-work obligations.

Nick Ruskin is a partner in the labour, employment and workplace safety team at K&L Gates.

Note from the editor: Please note that this article has been prepared for informational purposes only, and is not to be construed as advice (legal or otherwise).