Too sick too long? What constitutes a ‘fair’ dismissal?

When employers are confronted with employees who have been absent for prolonged periods, it may be appropriate to require and, in some circumstances, direct an employee to attend an independent medical examination (IME). 

Putting a process in place having regard to the circumstances and complying with legal obligations is paramount. Balancing the rights of employees and the operational needs of employers, an employer’s duty often intersects with the need to assess an employee’s fitness for work, particularly in situations involving workplace injuries, extended absences, or concerns about an employee’s capacity to perform the inherent requirements of their role. However, directing an employee to attend an IME needs to take into account a number of factors including the length of the absence, the availability of remaining personal leave accruals and the operational requirements of the employer. Making decisions based on medical evidence obtained by the employer is crucial to avoid potential unfair dismissal claims, breaching the Fair Work Act 2009 (Cth) (Act) or being exposed to claims of adverse action or unlawful disability discrimination.

Directing employees to attend independent medical examinations (IMEs)

IMEs can be utilised by employers to assess an employee’s fitness for work, particularly in circumstances where health concerns may impact their ability to perform inherent job requirements. These examinations can play a critical role in ensuring that decisions regarding employment are made based on objective medical evidence. However, the use of IMEs must be carefully aligned with legal obligations and avoiding costly litigation. 

Jodie Daunis v Rivercity Ferries Pty Ltd [2026] FWC 740

In this case, the Fair Work Commission (FWC) upheld the dismissal of Ms Daunis by her employer, centred on the applicant’s incapacity to perform the inherent requirements of her role due to ongoing medical issues. 

Ms Daunis began experiencing recurrent health issues, leading to frequent absences from work. By April 2025, she had been absent for 114 days in the preceding 12 months, which made it difficult for the employer to include her in its rosters. The employer raised concerns about her ability to perform her duties, which required prolonged standing and walking on a moving ferry platform. Given her health condition, these activities posed significant risks to her health and safety. 

The employer initiated a process to assess Ms Daunis' capacity to work, by directing her to attend an IME. The IME report concluded that she was unfit to perform the full duties of her role at the time but might return to work with temporary modifications and potentially resume full duties after a planned surgery in November 2025. However, the report also noted that her functional capacity was "highly variable" and that her improvement could not be accurately predicted. 

The FWC found that the employer had followed a fair process in dismissing Ms Daunis. She was provided with a show cause letter, given an opportunity to respond and was provided with reasons for her dismissal. The employer considered her response, the IME report, and medical certificates before making the decision to terminate her employment. Commissioner Simpson noted at [109], ‘I am satisfied the process followed was not procedurally unfair.’ 

Commissioner Simpson noted that the medical evidence available at the time of dismissal did not conclusively indicate that Ms Daunis would be fit to return to her full duties in the foreseeable future. The employer's inability to provide reasonable adjustments, such as reduced hours or modified duties, was deemed justified due to the operational challenges and the nature of the role. 

Mitigating risks associated with employee injuries

This case underscores the critical role of procedural fairness in employment decisions and the importance of obtaining an IME to assess an employee's capacity to perform their role. It also highlights the challenges employers face in balancing operational requirements with their duty of care to employees taking into account work, health and safety considerations and following a procedurally fair process that is both appropriate given the circumstances and lawful. 

Employers must tread carefully when addressing excessive sick leave to ensure compliance with their legal obligations. Key considerations include:

1. Requesting evidence of illness or injury

Employers are entitled to request evidence, such as medical certificates or statutory declarations to substantiate an employee’s need for personal leave. This evidence must be provided if requested, and it must satisfy a reasonable person that the employee was unfit for work.

2. Balancing operational needs

While employers have a right to manage their workforce effectively, they must balance this with their duty of care to employees. This includes considering reasonable adjustments to accommodate an employee’s illness or injury, where possible while taking into account obligations under work, health and safety legislation.

3. Conducting independent medical examinations

In some cases, an employer may need to obtain further information about an employee’s fitness for work. This is where an IME can be a valuable tool. However, the decision to require an employee to attend an IME must be approached with caution. There will need to be appropriate consultation and although not mandatory it is useful for contracts of employment to outline a requirement during the course of employment for an employee to attend an IME at the discretion of the employer.

Addressing excessive sick leave and conducting IMEs requires a careful and considered approach. By understanding their legal obligations and implementing best practices, employers can effectively manage these issues while supporting their employees and minimising legal risks.

For tailored advice on the proper approach to managing excessive personal leave, contact our team today.

Authors: Shawn Skyring & Jonathan Yassa

This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.