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Serious illness in the workplace: a management perspective

14 December 2011

Serious illness in the workplace: a management perspective

Kirryn West, Associate

PCS often receives questions relating to an employer’s obligations when an employee is diagnosed with a serious illness such as HIV/AIDS. If this situation occurs, regardless of whether the serious illness was contracted during the course of an employee’s employment, there are a broad range of issues employers need to be aware of spanning occupational health and safety, privacy and discrimination. In this article we step through the obligations of an employer to an employee who has a serious illness, other employees and third parties.

Obligation to the affected employee

Employers need to treat the management of an employee with a serious illness with a high degree of care and sensitivity given the broad range of potential legal risks attached to it. Potential legal considerations include:

Occupational Health and Safety/Duty of Care

Where an employee contracts a serious illness in the course of their employment, an employer has obligations arising from occupational health and safety legislation. Occupational health and safety legislation provides that an employer has an obligation to ensure the health and safety of employees as far as reasonably practicable. Where an employee has contracted a serious illness in the course of their employment it is arguable that their employer has breached its obligations under occupational health and safety legislation by failing to ensure the employee’s health and safety.

Under occupational health and safety legislation, an employer also has notification obligations where a notifiable or serious incident has occurred. A notifiable or serious incident generally refers to a situation that results in loss of life, amputation of a limb, the placing of the employee on life support and a range of incidents that present an immediate threat to life or require immediate treatment. Even where an illness is not a noti able or serious incident, an employer should continually reassess whether it is necessary to report the contraction of the serious illness to a state regulatory authority such as WorkCover New South Wales.

Employers also have a duty of care at common law to ensure the health and safety of an employee. If it can be shown that an employer breached its duty of care, and this breach resulted in the employee contracting the serious illness, it may be possible for the employee to seek damages from the employer.

Workers’ Compensation

Where an employee contracts a serious illness the workers’ compensation insurer of an employer may have an obligation to make payments to the employee. Workers’ compensation is payable where an employee has suffered an injury causing incapacity arising out of or in the course of their employment. The definition of an “injury” has been defined broadly and would include the contracting of a serious illness.

Where it is possible a workers’ compensation claim could be made, an employer should contact its insurer and review its insurance policy. This is because many insurance policies will contain additional obligations on an employer in situations where it is possible that a workers’ compensation claim could be made. Additional obligations may include the obligation on an employer not to make an admission in relation to the illness.

Return to Work

If an employee recovers from a serious illness and advises that he or she is fit to return to work, an employer will have an obligation to allow the employee to return to work (this may be to the employee’s previous role or, if the employee is not fit to perform this role, an alternative role). Although, an employer should be cautious that returning an employee to work does not breach any of its occupational health and safety obligations to the employee or other employees at the workplace. Therefore, prior to returning the employee to work and as a matter of best practice, an employer should obtain medical advice about the employee’s capabilities, management of the employee’s condition and any risks posed by the employee to co-workers or third parties.


An employer will also have to consider carefully its obligation not to discriminate against an employee at any stage on the basis of the employee’s illness. This is because both Commonwealth and State legislation prohibits direct and indirect discriminatory conduct on the ground of disability (which includes an illness or injury).

Termination of Employment

Should an employee be unable to return to work, and there is no alternative work available or adjustment that can be made so that the employee can return to work, it is open to an employer to terminate the employee’s employment (subject to any workers’ compensation claim made that prohibits termination). However, any termination in this situation would need to be handled with particular care to ensure there is no breach of discrimination law or the adverse action provisions of the Fair Work Act 2009 (Cth) (“FW Act”).

The FW Act deems unlawful any form of adverse action against an employee of the basis of disability. Adverse action includes terminating the employee’s employment or varying the position of the employee to the employee’s detriment.

Obligation to other employees and third parties

In addition to the obligation to an individual employee, an employer also has an obligation to other employees and third parties. There are a range of considerations employers should be aware of in relation to their obligation to other employees and third parties, including:

Privacy Obligations

While it may seem intuitively important to communicate to employees that one of their co-workers has contracted a serious illness, any decision by an employer to inform other employees of the relevant employee’s serious illness may infringe privacy legislation.

This is because the National Privacy Principles set out in the Privacy Act 1988 (Cth) state that the personal information of a person cannot be disclosed unless that person consents to the disclosure or unless disclosure is necessary to prevent or lessen a serious imminent threat to life. Therefore, without the consent of the employee, or imminent threat to life, an employee’s serious illness cannot be disclosed to other employees at the workplace or third parties.

Occupational Health and Safety Obligations

It is also necessary to be mindful of an employer’s obligations under occupational health and safety legislation to other employees and third parties. Under occupational health and safety legislation, an employer has an obligation to ensure the health and welfare of all of its employees and other persons at its workplace. Therefore, it is appropriate to consider whether an employer has appropriate mechanisms in place to ensure the health and safety of employees against the risk of contracting the serious illness.  This is particularly important should an ill/injured employee return to work, or to prevent the risk of the serious illness spreading.

To determine whether appropriate mechanisms are already in place, an employer should conduct a risk management process involving:

hazard identification – including identifying the potential sources of the infection and identifying activities where hazards exist and potential means of transmission;

risk assessment – including determining the risk of the disease being contracted. This should include looking at the availability of personal protective equipment, access to relevant medical first aid services and individual risk factors for each worker; and

risk control – developing and implementing policies and procedures to control the risks and monitor and review the effectiveness of the policies and procedures.

Practically, implementing any policies and procedures needs to be managed sensitively and without drawing too much attention to the affected employee. So, for example, if an employer needs to amend any of its occupational health and safety practices, it may be prudent to communicate this to employees as part of a broader occupational health and safety review.

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