Unfortunately, it is not uncommon for injured workers to be terminated whilst on worker's compensation in NSW. It is illegal for an employer to terminate an employee within the first six months of a workplace injury purely because that employee is unfit to resume work at that time.
After the first six months, an employer can terminate an injured employee but only after they have met all their obligations to their employee. Even if an employee is terminated, they may still be eligible for worker's compensation benefits like weekly payments and medical expenses. There are also avenues to explore for seeking reinstatement - if that is what you are looking for.
Employer obligations prior to terminating an employee who is on worker's compensation
Before an employer considers terminating an injured employee, even after the so-called 'protected period' (being six months from the date of injury), they are obligated to do all things possible to help their employee get back to work.
Your employer is required to do the following:
- Play an active role in developing an injury management plan to get an injured employee back to work. This step is usually done hand in hand with the worker's compensation insurer;
- Comply with all their obligations set out in the finalised injury management plan;
- Seek to provide the injured employee with suitable work duties once cleared to return to work, under certain restrictions (for example, shorter hours, restrictions on weights lifted etc);
- Provide suitable work duties, wherever practically reasonable, that are similar to the duties prior to injury.
It is absolutely in an employer's best interests to help an injured employee return to work and support and maintain the skills and knowledge of their experienced employees. This in turn reduces recruiting and training costs and generally affords an employer the opportunity to do the right thing by their staff. Therefore, working with an employer to get back to work is always the number one preferred option.
Worker's compensation benefits continue despite termination
If an injured employee is terminated for not being able to carry out their normal duties due to their injury, eligibility for worker's compensation benefits continues.
If an injured employee has been receiving worker's compensation benefits and employment is terminated, those benefits will keep being paid as long as the injured employee's doctor certifies that they are unfit to carry out their pre-injury duties.
- If certified unfit to return to work altogether, an employee will continue to receive reasonably necessary medical treatment and weekly benefits in accordance with their entitlement period.
- If certified unfit for pre-injury duties but fit for suitable duties, the employee will continue to receive medical treatment and pro-rata weekly benefits in accordance with their entitlement period. For example, if an employee's full-time hours are 40 hours per week b and they are only fit to work 20, then weekly benefits will be paid to make up their pay to the 80% PIAWE rate in accordance with their capacity to earn and during their entitlement period.
If the employee has left their employment and the employer was previously paying the weekly benefits, this will now cease and the worker's compensation insurer will pay the weekly benefits directly to the employee.
Can an employee sue the employer in a common law claim?
There is no need to follow the path of suing an employer to receive treatment expenses and weekly benefits if injured at work - these are covered by worker's compensation insurance, which all employers pay for. If, however, the claim is declined or you disagree with a decision about work capacity, for example, your IRO-funded lawyer can refer the insurer's decision to the Personal Injury Commission on your behalf.
Being terminated does not preclude an injured employee from suing for work injury damages (a common law claim) if the injury was caused by the employer's negligence and once the injury has been accepted by the insurer as reaching the 15% whole person impairment threshold.
A work injury damages claim is a claim for past and future loss of earnings.
Options for reinstatement after termination while on worker's compensation
If an employee has been terminated or made redundant purely because they were unfit for work due to a work injury, then they may be able to apply for reinstatement once they are certified fit for previous duties.
The first step is to ask the employer for reinstatement to a position that is no less preferential than the position that was held prior to becoming unfit because of injury.
If the employer does not agree with the requested reinstatement, the employee may apply to the Industrial Relations Commission (IRC) for a reinstatement order. This will require the evidence of a doctor to certify that the employee is fit to resume pre-injury duties. This process needs to be applied within two years of dismissal. We recommend you obtain advice from your union or an employment lawyer regarding termination or applying for reinstatement
Penalties for employers who fail to meet their obligations to injured workers
If an employer fails to adhere to their obligations, injured employees do have the option to refer them to the worker's compensation insurer and the State Insurance Regulatory Authority (SIRA). There may be other actions possible against the employer and you should discuss this with your union or an employment lawyer
Failure to adhere to their obligations could see employers at risk of fines in excess of $11,000.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.