Reasonable direction or coercion? Federal Circuit Court considers whether employee on extended sick leave was unlawfully dismissed


5 July 2021


In the recent decision of Wildman v IMCD Australia Limited [2021] FCCA 1161 the Federal Circuit Court rejected an employer’s attempts to verify an employee’s reason for taking an extended period of sick leave and determined that the employer’s subsequent decision to dismiss the employee was unlawful.

 

Background facts

Mr Wildman was employed by IMCD Australia Limited (IMCD) in the position of Commercial Manager.

In March 2017, Mr Wildman sought medical advice in relation to his mental health.  His doctor advised him to take one week of personal leave and provided a medical certificate certifying that he was receiving medical treatment and was unfit for work for a one-week period.

Mr Wildman’s mental health continued to deteriorate over the course of 2017 and culminated in him seeking medical advice in January 2018.  At this point his doctor advised him to take a one-month break from work and provided a medical certificate for that period.

Mr Wildman did not return to work following his one-month break and provided successive medical certificates in respect of his continued absence from work.  None of the certificates disclosed the nature of his illness or the reason for his absence.

IMCD doubted the genuineness of the medical certificates provided and took steps to try to ascertain the nature of Mr Wildman’s illness, including by:

  • directing him to attend a meeting at his workplace;
  • directing him to attend a medical examination; and
  • seeking to communicate directly with his doctor.

 

After declining to follow the directions given to him, Mr Wildman received a final warning.  The warning outlined IMCD’s belief that he was being dishonest and was abusing his personal leave entitlements.  IMCD suspected that Mr Wildman was “acting out” in response to IMCD’s decision to change his work location.

By the terms of the warning Mr Wildman was given a final opportunity to attend a meeting to explain the reason for taking personal leave and put him on notice that unless he was able to satisfactorily demonstrate that his leave was legitimate, his employment was at risk of being terminated.

Mr Wildman did not comply with the demands in the warning and IMCD proceeded to terminate his employment.  

Mr Wildman subsequently brought a general protections application in the Federal Circuit Court, arguing that:

  • his dismissal constituted unlawful adverse action by virtue of his employment having been terminated because he had exercised his “workplace right” to take paid personal leave;
  • in giving the directions referred to above, IMCD unlawfully coerced him not to exercise his workplace right to take personal leave;
  • IMCD unlawfully terminated him for a prohibited reason, being his temporary absence from work because of illness or injury; and
  • IMCD failed to provide him the minimum period of notice of termination (or payment in lieu of notice) required under the National Employment Standards.

 

Findings of the Court

 The main issue for determination by the Court was whether or not the medical certificates submitted by Mr Wildman constituted sufficient evidence (within the meaning of the Fair Work Act 2009 (Cth)) such that he was on personal leave (and thus exercising a workplace right) at the time of his dismissal.

The Act requires an employee to provide evidence that would satisfy a reasonable person that the leave being taken is because of a personal illness or injury affecting the employee.  IMCD argued that the certificates did not satisfy the Act’s requirements because they did not disclose the nature of his illness. 

The Court rejected IMCD’s argument and determined that, notwithstanding the absence of that information, all of the medical certificates were sufficient to satisfy the requirements of the Act.

The Court upheld all of Mr Wildman’s claims and made the following further observations:

  • the directions issued by IMCD in the warning were neither lawful nor reasonable. In particular, IMCD was not able to establish any genuine reason for needing further medical information about his condition from his treating practitioner;
  • it was relevant that Mr Wildman was not seeking to return to work and therefore the information was not necessary in order for IMCD to comply with its work health and safety duties or for operational reasons.

 

Takeaways

While it is unclear at this stage whether IMCD will appeal the Court’s decision, the outcome highlights some of the challenges associated with managing employees who take extended periods of personal leave.

It can be difficult to balance engaging with an ill or injured employee for the purpose of supporting their return to work, and the potential perception of coercion or adverse action.  Employers need to exercise caution before seeking to undermine an employee’s medical certificate.  The Court in this case made clear that a certificate which does not disclose the nature of an employee’s illness will still constitute satisfactory evidence in support of a request to take paid personal leave.

This decision also serves as a timely reminder of the importance of maintaining accurate employment records in relation to the reasons for any decision to terminate noting that, depending on the type of claim, an employer may bear the onus of proving that the reason for termination did not include a prohibited reason.

 

This article provides general comments only.  It does not purport to be legal advice.  Before acting on the basis of any material contained in this article, we recommend that you seek professional advice.

 

Authors:

Paul Dugan, Principal in our Disputes Team

Contact
Email:  pdugan@dmawlawyers.com.au
Direct Telephone:  +61 8 8210 2266

 

Kylie Dunn, Senior Associate in our Disputes Team

Contact
Email:  kdunn@dmawlawyers.com.au
Direct Telephone:  +61 8 8210 2286

 

The authors would like to thank Lachlan Chuong for his assistance in preparing this article