Is it possible to legally make a worker redundant while they are on workers’ compensation? For example, the worker’s role may be moving from NSW to the ACT, meaning the role in NSW would no longer exist. What are our legal obligations to the worker in this scenario?
Part 8 of the Workers Compensation Act 1987 (NSW) (Workers Compensation Act) protects injured workers from dismissal where their dismissal is because they are not fit for employment. Under section 248 of the Workers Compensation Act, an employer may be liable to a penalty if they are found to have dismissed an injured worker within 6 months of the injury because they are not fit for work.
An injured worker who is dismissed from their employment in these circumstances may bring a claim for reinstatement with the Industrial Relations Commission, and is entitled to rely on the presumption that their employment has been terminated on the basis that they are not fit for work.
This will be determined based on whether the injury was a substantial and operative cause of the dismissal. A failure for you, as the employer, to rebut this presumption may lead to penalties under section 248 and an order to reinstate the worker.
In addition, where a worker’s injury is one of the reasons for the decision to terminate their employment, the termination will likely be susceptible to a discrimination complaint to the Australian Human Rights Commission under the federal Disability Discrimination Act 1992 (Cth) or a general protections claim under the Fair Work Act 2009 (Cth).
For claims under either of these acts, the burden you will have to discharge is much higher than that under the Workers Compensation Act. You would need to establish that the injury was not one of the reasons for termination.
If you are able to establish that the redundancy is genuine, this will likely be a defence to any claim that the injury was one of the reasons for dismissal.
Please note that this response should not be taken to be legal advice. It would be worthwhile seeking legal advice on the process of making an employee on workers’ compensation redundant.