Managing ill and injured workers: A guide for employers

To manage ill and injured employees effectively, employers should monitor for signs and assess their fitness for duty when concerns arise, write Megan Cant and Louise Hogg.

Managing ill and injured workers has become more complex than ever, particularly with the prevalence of psychological injuries and the requirements under workers’ compensation laws. Poor management can lead to team disruption, legal claims and financial penalties. To minimise these risks, employers must understand their obligations.

In Australia, several legal frameworks govern how employers manage ill or injured workers. These include the Fair Work Act 2009 (Cth), Disability Discrimination Act 1992 (Cth), state anti-discrimination laws, and workplace health and safety legislation. Workers’ compensation laws also apply when the illness or injury is work-related.

Assessing an employee’s fitness for duty

Extended absences or drops in performance may indicate concerns about an employee’s fitness for duty. In such cases, employers should consider a formal assessment to evaluate the employee’s capacity to work.

Employers can begin by seeking the employee’s written consent to contact their treating doctor. This allows the employer to request a medical report to determine potential role adjustments, prognosis and recovery time. If consent is not provided, consider an independent medical examination.

Depending on the findings, employers may implement temporary adjustments, redeploy the employee, or, if the employee cannot perform the inherent requirements of the role, consider termination.

Return to work and suitable duties

When an illness or injury is work-related and a workers’ compensation claim is made, employers are generally required under workers’ compensation laws to provide suitable duties to the affected employee. These duties should be tailored to the employee’s current capacity, and may involve reduced hours, modified tasks, or relocation. The goal is to support a genuine return to work.

This obligation is not absolute, but employers must take reasonable steps to identify and provide suitable work. Some businesses may be required to appoint a return-to-work coordinator and implement a return-to-work policy to support this process.

If no suitable duties are available, employers must document the steps taken and notify their insurer. Importantly, lack of capacity or suitable duties does not automatically justify termination. Injured workers are usually protected from dismissal for 12 months in Queensland and six months in NSW, unless another valid reason applies, such as serious misconduct.

Disability Discrimination Act review

The Disability Discrimination Act is undergoing its first major review in 15 years, following recommendations from the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability.

Proposed changes in the issues paper released by the federal government may, in future, require employers to take reasonable and proportionate measures to eliminate disability discrimination, so far as reasonably practicable. This will form part of an employer’s duty to take positive steps to prevent discrimination in connection with work.

Another proposal is to amend the term “reasonable adjustments” to “adjustments” to make it clear that employers must make adjustments unless they can demonstrate that doing so would impose unjustifiable hardship on the business.

When termination may be reasonable

If all reasonable steps have been taken and the employer cannot provide suitable duties, modify the role or redeploy the employee, they may start considering termination.

Best practice for employers

To manage ill and injured employees effectively, employers should monitor for signs and assess their fitness for duty when concerns arise. Engage with the employee about their capacity and any role adjustments if necessary. Decisions should be based on objective medical evidence, and if treating doctor reports are unavailable or vague, consider an independent medical assessment.

Throughout the process, maintain clear documentation and ensure existing workplace policies align with legal obligations. By understanding the requirements and proactively addressing any signs of concerns, employers can support their ill and injured employees while minimising disputes and legal claims.

Megan Cant and Louise Hogg are partners at national law firm Holding Redlich.