Navigating employee absence during disciplinary action: Lessons on dismissal while on sick leave
Managing staff absences amid performance management or disciplinary processes is a complex area of employee relations. Balancing compassion for an employee’s health with the organisation’s need to address serious performance or conduct issues requires precision in procedural fairness and any missteps could expose employers to significant risk.
Employers may assume that whilst an employee is on sick leave, an employee cannot be dismissed. However, the recent Fair Work Commission (FWC) decision in the case of Fletcher v Gordon House Management Pty Ltd [2025] FWC 2572 offers timely guidance for employers in approaching these situations. Whilst it does make the process more of a complex exercise, there are options to progress the process depending on the circumstance.
Mr Fletcher, a General Manager, was dismissed for underperformance and unauthorised conduct whilst on certified sick leave. The investigation into his conduct had been ongoing for approximately three months prior to termination, and he was dismissed whilst on a two-week period of sick leave.
Mr Fletcher argued that the dismissal was unfair because it occurred during his medical absence, despite having received the allegations beforehand and being given an opportunity to respond. The FWC disagreed, confirming that while the timing weighed slightly against the employer, valid grounds for termination existed and this meant that the dismissal was not harsh, unjust, or unreasonable.
Under s 352 of the Fair Work Act 2009 (Cth), it is unlawful to dismiss an employee because they are temporarily absent from the workplace due to illness or injury. However, the Act does not give blanket protection from termination during periods of leave. If there are legitimate, well-founded reasons unrelated to the employee’s absence, such as underperformance or misconduct, the dismissal can still proceed whilst exercising a high degree of caution. The Fletcher case underscores that the key distinction is the reason for the termination, not the employee’s leave status.
Although, the FWC noted that the employer’s perception of the sick leave (suspecting it was a tactic to delay the process) was factored into the timing of the dismissal without giving Mr Fletcher a chance to respond. This procedural misstep did not overturn the outcome, but it weighted negatively from the employer’s standpoint. For employers, this illustrates that even when valid grounds exist, cutting corners on process can create legal exposure. The Commission also noted that the lack of a specialist human resource management role from the employer had an impact on the procedures that were followed, although not determinative on whether the dismissal was harsh, unjust, or unreasonable.
Key Takeaways for Employers:
1. Distinguish performance from leave
Clearly document that any action taken is conduct or performance, not the fact an employee is on sick leave. This protects against claims under s 352 of the Fair Work Act (Cth).
2. Build HR capability in leaders
Invest in training managers and HR teams on managing performance, disciplinary processes, and employee absences. A well-informed leadership team reduces the risk of procedural missteps.
3. Consider timing with care
Where possible, pause action while a current medical certificate applies, or give the employee a fair opportunity to respond remotely. Avoid creating the impression that leave itself triggered the decision.
4. Maintain rigorous procedural fairness
Provide clear allegations in writing, allow a support person, and genuinely consider the employee’s responses before finalising a decision. Even strong evidence can be undermined by poor process.
5. Seek expert advice
Overlapping sick leave, disciplinary matters, or long-term absences can raise discrimination, adverse action and unfair dismissal risks.
Navigating this intersection of employment law demands care.
Employers can dismiss an employee who happens to be on sick leave, but not because they are on sick leave.
Employers would be well placed to ensure that every effort is made to remove or mitigate that argument. Transparent processes and empathy will not only reduce legal risks but also support a fair and respectful workplace culture.
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If you have concerns or questions regarding dismissal while on sick leave or any need support navigating workplace issues, please contact us below and one of Workplace Strategists will be in touch within 24 hours.