Terminating an employee who has a workers’ compensation claim
Terminating an employee who has a workers’ compensation claim is a complex process, tightly regulated under Western Australian legislation.
Employers must understand their legal obligations during the 12-month employment obligation period, including their obligations to provide the worker's pre-injury position or suitable alternative employment where required and ensure they are using prescribed termination forms – to avoid costly penalties and claim impacts. In this article we outline the key requirements and risks to help employers navigate terminations in compliance with the law.
Terminating the employment relationship
The right to terminate the employment relationship is restricted where the employee has a workers’ compensation claim. During the 12-month employment obligation period, beginning on the first day the worker has an incapacity for work because of the injury, employers have obligations regarding the worker's return to employment.
If the worker is certified as having capacity for work during that period, the employer must, where reasonably practicable, provide the worker with:
- their pre-injury position; or
- an alternative position that the worker is qualified for and capable of performing that is most comparable in status and pay to their pre-injury position. (section 166 of the Workers’ Compensation and Injury Management Act 2023 (WCIM Act))
Employers must not dismiss a worker during the employment obligation period solely or mainly because the worker is partially or totally incapacitated for work. Where an employer intends to dismiss a worker during this period for another lawful reason, they must first provide the prescribed notice. Penalties of up to $10,000 apply for each offence.
Prescribed form to terminate
Where the employer terminates the employment relationship within the 12-month period, the employer must give at least 28 days’ notice to the worker before the termination comes into effect. Notice is to be provided to the worker by completing the prescribed form.
Form CN8 – Intention to Dismiss Worker Notice is available on the WorkCover WA website at workcover.wa.gov.au. If the employer terminates the employment relationship and fails to give the worker the prescribed notice as required, a penalty of up to $10,000 may apply.
Employers should also ensure compliance with any minimum notice of termination provisions in the employee’s contract of employment, industrial instrument and relevant legislation.
The effect of termination on the workers’ compensation claim
Terminating the employment relationship of an employee with an active workers’ compensation claim is likely to affect the ongoing management of the claim. If the employee is not yet certified by the treating medical practitioner as fit for work and remains entitled to weekly income compensation following the dismissal, weekly compensation generally continues in accordance with the WCIM Act.
Where the worker is no longer participating in a return-to-work program because their employment has ended, the amount of weekly income compensation payable will be determined in accordance with the Act and the worker's individual circumstances.
The insurer generally assumes responsibility for coordinating ongoing injury management and return-to-work assistance. Depending on the circumstances, this may include engaging an accredited workplace rehabilitation provider to assist the worker in obtaining suitable employment. These costs may affect the overall cost of the claim and impact future insurance premiums.
Interaction with other legislation
Importantly, complying with the WCIM Act does not automatically make a dismissal lawful or prevent an employee from bringing an unfair dismissal, general protections, discrimination or other employment-related claim under applicable State or Commonwealth legislation. Such legislation includes but is not limited to:
- Fair Work Act 2009 (Cth) – unfair dismissal and general protections
- Australian Human Rights Commission Act 1986 (Cth)
- Equal Opportunity Act 1984 (WA)
- Industrial Relations Act 1979 (WA) – unfair dismissal
How we can help
CCIWA’s Employment Relations Helpline provides free, unlimited advice to Members on HR, industrial relations and employee relations matters.
If you’d prefer to speak to one of our employment lawyers, please contact us at [email protected] or 08 9365 7746.
Also, CCIWA’s partner Epigroup has qualified workplace health and safety experts who provide cost-effective solutions to manage your WHS needs, reduce the risk to your workers and help you meet WA’s WHS laws. Email [email protected] or call 08 6234 0600.
