The purpose of workers’ compensation is to provide valuable protection to workers and employers in the event of a workplace-related injury and/or accident.

Laws regulating workers’ compensation in Australia outlines that a worker is entitled to compensation for any personal injury or disease or an aggravation of an injury or disease occurring during the course of employment.

Under workers’ compensation legislation, the definition of ‘worker’ includes workers who are working full-time on a wage or salary, part-time, casual or seasonal workers, workers on commission, piece workers and working directors.

Owen Hodge, the expert compensation lawyers in Sydney, offer the following advice to employees considering dismissing employees on workers’ compensation.

Workers’ Compensation Law in Sydney

The main purpose of workers’ compensation legislation is to facilitate an employee’s return to work after a workplace-related injury or illness. The Commonwealth, State and Territorial legislations concerning workers’ compensation is different in each state and the employer’s obligations are set out under the relevant state or territory’s workers’ compensation. The main legislations regulating workers’ compensation in the Commonwealth and New South Wales (NSW) are:


  • Safety, Rehabilitation and Compensation Act 1988; and
  • Safety, Rehabilitation and Compensation Regulations 2002;


  • Workers Compensation Act 1987;
  • Workplace Injury Management and Workers Compensation Act 1998; and
  • Workers Compensation Regulation 2010.

Dismissal of Employees and Workers’ Compensation

Dismissing an employee who is in receipt of workers’ compensation may be a breach of law. Most of the legislations throughout Australia prohibit an employer from dismissing an employee absent on workers’ compensation until the lapse of a specified time period.

As per Section 352 of the Fair Work Act 2009 and regulation 3.01 of the Fair Work Regulations 2009 an employer must not dismiss an employee because the employee is temporarily absent from work due to illness or injury of a prescribed kind.

A ‘prescribed kind of illness or injury’ exists if the employee provides a medical certificate for the illness or injury or a statutory declaration about the illness or injury either within 24 hours after commencement of the absence for such period as is reasonable in the circumstances.

An employee who is absent for more than three months is not protected from dismissal under these provisions since an absence of more than three months does not fall within the purview of a ‘prescribed kind of illness or injury’ and hence he or she is no longer protected from dismissal under these provisions.

The employee may be protected from termination under a specified State or Territory workers compensation legislation if the reason for the employee’s dismissal is primarily due to his or her absence on workers compensation.

Dismissal and Workers’ Compensation in NSW

The main legislation governing dismissal of employees in NSW is the Workers’ Compensation Act 1987 (the Act). As per Section 248 of the Act, an employer is guilty of an offence if the employer dismisses an injured worker because the worker was not fit for employment as a result of the injury and such dismissal happened during the relevant period of 6 months after the worker first became unfit for employment except cases stipulated under sub-section 248(2)(b),(c) &(d).

Section 241 of the Act further empowers an injured worker to make an application for reinstatement to his employer in the event of his dismissal from work. If the employer fails to reinstate the worker in his employment, the worker may apply to the Industrial Relations Commission for reinstatement.

For the purpose of reinstatement, it is normally presumed that an injured worker was dismissed because he or she was unfit for employment as a result of the injury received. This presumption can be rebutted if the employer can satisfy the Industrial Relations Commission that the injury was not a substantial and operative cause of such dismissal. However, a Reinstatement Order may not be passed if the application to the employer for reinstatement was made more than 2 years after the injured worker was dismissed.

From the above it can be said that employers should take extreme caution and seek professional advice to gain clarity as to how an employee is protected under the prevailing dismissal laws of a State. Our team at Owen Hodge are the experts in workers’ compensation law in Sydney and can guide you in the event you have any query related to the existing employment and dismissal legislation.

For more information, contact one of our expert compensation lawyers in Sydney.

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