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Court confirms employer’s right to direct employees on sick leave

June 07, 2018

By Alex Millman and Lindsay Carroll, NRA Legal

When employees are absent from work on sick leave, employers often have to walk a narrow line between the lawful and the unlawful.

On the one hand, the employee has the right to be absent on sick leave, and interfering with that right can land you on the wrong side of workplace and discrimination laws.

On the other hand, you still have a business to run, and potentially human resources matters to resolve, which simply cannot happen properly without the participation of the employee.

In a decision earlier this year, the Federal Circuit Court reiterated that sick leave doesn’t absolve employees of the obligation to follow the lawful and reasonable directions of their employer.

Swanson v Monash Health [2018] FCCA 538 (9 March 2018)

The claim

Ms Swanson commenced employment with Monash Health in an administrative role in 2002. In October 2015 she commenced a period of personal leave due to illness, supported by medical certificates. 

Ms Swanson’s period of absence extended for quite some time, and Monash Health directed her to attend Independent Medical Assessments (IMAs) three times during her absence (on 8 April 2016, 13 April 2016 and 15 April 2016).

On each occasion, Ms Swanson (by her lawyers) refused to comply with this direction, arguing that her being on personal leave meant that her employer had no right to give her any directions.

Monash Health subsequently dismissed Ms Swanson from her employment for serious misconduct, namely her refusal to comply with the directions to attend an IMA.

Ms Swanson subsequently filed a claim alleging that her dismissal contravened section 340 of the Fair Work Act 2009 (Cth), arguing that she was dismissed (an adverse action under section 341 of the Act) because she exercised her workplace right to not work while on personal leave.

The arguments

Ms Swanson’s case before the court, as it had been before her employer, was that the right to take personal leave was the right to be completely released from any obligations to her employer for the duration of her absence.

Monash Health did not deny that Ms Swanson had exercised a workplace right, this being the taking of personal leave; nor did it deny that her dismissal constituted adverse action under the Act. It did however deny that her dismissal was because she exercised her right to take personal leave, but rather her refusal to obey a lawful and reasonable direction.

In essence, Ms Swanson’s argument was that because she was on personal leave, any directions issued to her by her employer were unlawful.

The court’s consideration

Judge Jones of the Federal Circuit Court had two key questions to answer in this case:

  • what, exactly, was the nature of Ms Swanson’s workplace right; and
  • whether the direction issued by Monash Health was lawful.

What is the nature of sick leave?

Ms Swanson’s representatives attempted to argue that the taking of sick leave ‘suspended’ or ‘broke’ the application of all other elements of the employment contract, including the right to issue directions to the employee. Judge Jones rejected this argument as simply not backed up by the text of the legislation.

Her Honour found that the right to sick leave was the right for an employee to be absent from their ordinary duties, not a free pass on any and all obligations arising out of employment.

If Ms Swanson’s argument was accepted, it would mean that common ongoing contractual obligations such as privacy, confidentiality, and the security of intellectual property would cease to apply during a period of sick leave. The employee would, effectively, terminate their employment contract by taking sick leave. Since the Fair Work Act 2009 (Cth) provides that employment remains ongoing during a period of sick leave, this is quite simply not the case.

As such, Judge Jones found that the right to sick leave was not a right to refuse to comply with directions from the employer, unless those directions were unlawful and/or unreasonable.

Was the direction to attend an IMA lawful and reasonable?

Examining the relevant legislation, Judge Jones found that the employer had a contractual obligation to Ms Swanson to ensure that it was able to provide its workers, including Ms Swanson, with a safe working environment. 

This carried with it the right of the employer to, where necessary, require an employee on paid personal leave to attend a medical examination to confirm the employee’s capacity or incapacity to work.

This common law obligation is supported by health and safety legislation in all States and Territories.

Judge Jones had no issues classifying the direction issued by Monash Health as lawful and reasonable, especially since there was no evidence to suggest Ms Swanson was incapable of attending an IMA.

The court’s conclusion

Because of her conclusion that:

  • the right to sick leave is not a right to refuse to comply with a lawful and reasonable direction; and
  • the relevant direction was lawful and reasonable in all the circumstances;

Judge Jones held that the dismissal of Ms Swanson was not a contravention of the Fair Work Act 2009 (Cth).

What this means for you

This case confirms that sick leave is not a ‘get out of jail free’ card for employees.

Employees on sick leave can hamstring many processes – most commonly, investigations and disciplinary processes.

Whilst this case considered circumstances where the employer sought to ascertain the employee’s capacity to return to work, the principles have application in other areas.

For example, an employer may direct an employee on sick leave to attend an investigatory or disciplinary meeting, so long as the direction is reasonable in all the circumstances, and failure to attend may be grounds for disciplinary action.

Whether the direction is reasonable will vary depending on the circumstances. If, for example, there is medical evidence suggesting that the employee is incapable of attending an investigatory or disciplinary meeting, the direction may be unreasonable and the employee may refuse to comply.

Notwithstanding any of the above, it must be remembered that this case did not deal with anti-discrimination law, and as such care must still be taken. Please contact NRA Legal on 1800 RETAIL (738 245) to discuss your particular circumstances.

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