Three’s company: Psychological injury, workplace compensation and unfair dismissal

Unfair dismissal claims often centre on the harsh, unjust or unreasonable nature of a dismissal relating to an employee’s conduct or performance at work. It is less common that claims of unfair dismissal arise due to an absence from work, where an employee is absent from work due to a workplace injury.


This was, however, the situation in the recent case of Siminsky v Gunlake Concrete NSW Pty Ltd T/A Gunlake Concrete NSW Pty Ltd [2019] FWC 2429 in which the Fair Work Commission (FWC) considered an employee’s claim that he had been unfairly dismissed while incapacitated by a psychological injury sustained and exacerbated in his workplace, all while intending to lodge a workplace injury compensation claim.

What happened?

Between May 2017 and August 2018, the employee worked for the employer as a concrete truck driver.

On 2 May 2018, the employee alleged that he had been verbally abused by his supervisor, who had threatened to report him to the General Manager of the business. When the employee informed his supervisor that he intended to make a harassment complaint against him, his supervisor allegedly mocked him.

An investigation was subsequently held, and at a meeting two days later the employee provided the General Manager with a medical certificate stating he was unfit for work the next day because he was suffering from a nervous condition resulting directly from the incident with his supervisor on 2 May 2018.

In mid-June 2018, subsequent discussions were had between the employee, his supervisor and the General Manager regarding the employee’s unsatisfactory performance at work.

The employee requested a week of annual leave, which was approved. After visiting his doctor regarding his nervous condition, he subsequently informed the General Manager that his period of leave was no longer annual leave but sick leave, and alleged that he was being victimised by management stemming from his complaint on 2 May 2018. This period of sick leave continued for some time.

While the employee was on sick leave, an internal investigation commenced in response to the employee’s complaints found merit in the concerns regarding the employee’s poor work performance but did not find the employee’s complaint of victimisation to be substantiated.

The employee subsequently advised the General Manager that his best option for recovery would be to bring his employment to an end, and that he would consider a settlement offer.

In August 2018, the Respondent offered the employee $15,000 in settlement in exchange for him signing a deed of release. This was declined by the employee on 29 August 2018, who then advised his employer of his intention to lodge a worker’s compensation claim, noting that he had a doctor’s appointment for this purpose in 5 days’ time.

On 30 August 2018, before the employee attended the doctor’s appointment, the employer terminated the employee’s employment on the basis of the employee’s apparent inability to return to work, that it was not reasonably practical to provide the employee with alternate employment, and that it was not possible to modify the employee’s role to accommodate his medical condition.

The employee’s workers compensation claim was subsequently accepted by the insurer on 27 September 2018.

Was the employer’s basis for termination unfair?

The employer disputed that there had been any breach of workers compensation legislation, as the employee’s employment was terminated prior to him lodging a claim. This was accepted by the FWC.

The FWC also accepted the position at law that an employee’s ongoing capacity arising from illness or injury can constitute a valid reason for termination of employment,1 but noted that in capacity related dismissal cases this requires the FWC to make a finding as to whether, at the time of the dismissal, the employee suffered from the alleged incapacity.2

Applying this position to the facts of the case, the FWC found this was not a situation where an employer had failed to accommodate an employee fit to work, either in an alternative or modified role.

Rather, the employee was unfit to perform any work at all for the employer and there was no indication of his ability to return to work in the near future – on this basis, a valid reason for dismissal existed.

The FWC also noted the employer’s concession that its internal human resources processes could have been conducted differently and that the employer did not possess any dedicated human resource expertise.

Given this, and that the employer had attempted to propose an amicable resolution to end the employment relationship, these factors were not considered sufficiently persuasive to establish that the manner of the employee’s dismissal was “harsh, unjust or unreasonable” – a requirement to establish that a dismissal was unfair.3

The takeaway

Interestingly in this case, the employer’s decision to dismiss the employee related solely to his being unfit to return to work in the foreseeable future in any capacity (i.e. unable to perform the inherent requirements of the role even with adjustments), notwithstanding that the employee’s grievances regarding his victimisation at work led to his workplace injury claim in the first place.

Employers and human resources professionals should take note of the FWC’s reaffirmation of the principle that, where an injured employer has no prospect of returning to work in an alternative or modified role, this may offer a valid ground for termination.

Notwithstanding this, caution should still be given to terminating the employment of an injured employee too soon – the absence of a valid reason for dismissal does not mean that a dismissal cannot still be “harsh, unjust or unreasonable” within the meaning of the Fair Work Act. There are also provisions within the Fair Work Act that preclude employers from terminating employees because they are absent due to a temporary absence due to illness or injury. As such, it is always wise to seek advice from us before considering terminating an employee who is absent due to illness or injury.

Want to find out more? At 8am on 9 May 2019, McCabe Curwood’s Employment team and Workplace Risk and Compensation team are holding a joint breakfast seminar on an employer’s obligations to an employee who has made a workers compensation claim.

If you have any questions, would like to attend the seminar or know someone in your network who might, please let us know via email at or give us a call on +61 8252 3560.

1 Smith and Kimball v Moore Paragon Australia Ltd [2004] PR942856 at [44].
2 CSL Limited t/a CSL Behring v Chris Papaioannou [2018] FWCFB 1005 at [77].
3 Fair Work Act 2009 (Cth) s 385.


Ethan Aitchison Law Graduate