Can an employee be terminated for a false sick leave claim?

Key Learnings for Employers

Knowingly lodging a falsified sick leave claim is essentially fraud.
Where an employee takes regular sick leave, has personal leave accumulation available and produces what appears to be a genuine medical certificate employers appear to have very limited disciplinary options, however ……
Employers need to review their personal leave policies. Will they accept employee statutory declarations, medical certificates from pharmacists or other type of therapeutic provider.
Investigations are an important part of any disciplinary or termination process.
The Decision includes a useful discussion of the Small Business Fair Dismissal Code summary dismissal provisions.

A lawyer claimed unfair dismissal after being terminated from a small Melbourne commercial law firm for falsely claiming sick leave (on a Friday and Monday) to attend a football match and social events in Adelaide. The employer did not become aware that the sick leave claims were false until some months later when investigating other aspects of the employee’s work performance.

The employee, Mr Fuller, took a flight to Adelaide on the Thursday evening after work. His employer was not aware of this at the time.

He sent a text message to his employer on the Friday morning (5 April 2024) stating he would not be attending work because he was unwell.

A second text message was sent on the Monday morning stating he was in discomfort and was not able to take public transport to work. On the same day he procured a medical certificate via an online provider and forwarded it his employer. He claimed and was paid personal leave for both sick days.

On 28 April 2024 he completed a statutory declaration stating he was sick on Friday 5 April and that he was unable to get an appointment with his usual Doctor.

In July 2024 the firm engaged a HR Consultant to assist with work performance issues in relation to Mr Fuller. The consultant examined his social media posts. When discussing these with the managing partners they became aware the dates on those posts matched his personal leave dates in April. Mr Fuller was suspended on full pay while an investigation took place.

In a subsequent meeting, on raising the question of whether the personal leave taken in April was genuine and seeking further explanation (without raising the social media posts as contrary evidence), Mr Fuller became quite defensive and asserted the personal leave dates were genuine. Interestingly, his position did not change when presented with his social media extracts showing otherwise.

In response the firm terminated Mr Fuller’s employment stating he had made a false statutory declaration and falsified leave requests.

On 9 October 2024, following the initial Fair Work Commission conciliatory proceedings, he provided his former employer with a back dated medical certificate where his Doctor stated he did not attend work on 5 April because he was unwell.

Commission Proceedings and The Decision

In the formal decision the Deputy President accepted the evidence of the two managing Partners that the termination had taken place for the stated reasons and that Mr Fuller had been dishonest during the investigation process.

During proceedings Mr Fuller provided a list of complaints and grievances about his former employer – seemingly to discredit them as witnesses ahead of their providing evidence to the Commission.

In his written witness statement Mr Fuller stated he had spoken to his Doctor on the Thursday 4 April ‘confirming his mental state and his plans for the absence on Friday and Monday – which he (his doctor) would later use to prepare a medical certificate for those dates’. He also attached a copy of an invoice as supporting evidence to show the medical consultation had taken place.

The Deputy President, in reviewing this evidence, did not accept any the above points from Mr Fuller’s witness statement concluding the call with his doctor never happened. The Deputy President stated:

'Mr Fuller’s evidence about the alleged event is a matter that has further informed my assessment of Mr Fuller’s reliability and honesty as a witness regarding the critical issue of his absences on 5 and 8 April 2024, including that he was unfit for work.'

The invoice Mr Fuller had attached to his witness statement supporting his discussion with his doctor was genuine but related to a consultation from 28 February 2024. He also included a medical certificate he received at the February consultation.

In response the Deputy President asserted to Mr Fuller that his witness statement was completely false he responded: “yeah, I guess so” but immediately followed this up stating he had made a mistake and was confused with the phone calls. He stated he may have tried to reach his GP on the weekend – 6 & 7 April - and not on Friday 5 April.

The Deputy President then discussed Mr Fuller giving false evidence to his employer followed by presenting false evidence before the Commission through his written witness statement and subsequent verbal evidence.

The Small Business Fair Dismissal Code

As the employer had stated the termination took place in accordance with the Summary Dismissal provisions of the Small Business Fair Dismissal Code (the Code) the Deputy President addressed this in the decision.

The summary dismissal provisions in the Code state:

‘It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures.’

The Code does not require such a matter be reported to Police.

The summary dismissal section of the Code applies to dismissals without notice of serious misconduct as defined in Regulation 1.07 of the Fair Work Regulations 2009.

In further commentary the Deputy President noted that under the Code ‘the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Where the employer summarily dismisses an employee and seeks to rely on the Code, there are two key steps:

Firstly, there needs to be a consideration of whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal.

Secondly, it is necessary to consider whether that belief was based on reasonable grounds.

The Deputy President also indicated that in previous Fair Work Commission decisions addressing the Code ‘reasonable grounds were arrived at following a reasonable investigation’.

On the basis that Mr Fuller had lied to the managing partners of the law firm, the Deputy President concluded that Mr Fuller’s conduct was sufficiently serious to justify instant dismissal.

The reason for dismissal related to the summary dismissal grounds of fraud and wilful deliberate behaviour that were inconsistent with Mr Fullers’ employment contract.

The Deputy President, in relation to point 2 above, stated the employer’s belief was based on reasonable grounds. The employer had highly credible evidence that correlated across a number of factual streams.

The Deputy President then made an interesting observation in relation to the requirement to undertake an investigation stating:

‘While “reasonable grounds” can incorporate the concept that the employer has carried out a reasonable investigation into the matter, what is a reasonable investigation might depend on the circumstances. In some cases, little or even no investigation might be required where the matters underpinning the belief are demonstrably clear – for example, directly witnessing an unprovoked assault would require little or no investigation at all. In other circumstances, the employer might be required to undertake considerable further work to ensure that they do not summarily dismiss the employee prematurely – for example, receiving an anonymous tip off the employee has engaged in unspecified instances of theft might require considerable investigation.’

In conclusion, given that the employer had satisfied point (1) and (2) above the Deputy President stated that Mr Fuller’s termination had been consistent with the Code and therefore Mr Fuller’s termination had not been unfair.

In further comments the Deputy President asserts that even if the employer had not sought to rely on the Code the termination would still not have been unfair.

Commentary

While at times the above case may appear comical and clear cut there are several useful aspects that can be derived from this decision.

Employers need to recognise that it can be quite difficult to take disciplinary action against an employee where the employee has personal leave available to use and a medical certificate has been supplied from a duly qualified medical practitioner. From my own Commission experience a medical practitioner’s opinion is taken to be highly credible evidence in a Commission hearing. Only where there is sufficient credible evidence to the contrary will a medical certificate’s value diminish.

In relation to the above case if the employee had obtained (even after the fact) a genuine medical certificate stating the employee was in fact unwell on the Friday and the Monday this evidence would have been highly regarded by the Deputy President. In the above circumstances the outcome may still have been the same but it would have resulted in a more interesting legal analysis! In other situations, with circumstantial evidence employers would need to exercise more care before termination.

Secondly, small business employers should utilise the Small Business Fair Dismissal Code with caution. While it seems useful it is predicated on individual Commission member’s opinions which can vary substantially – and in unusual ways. The Deputy President makes a useful point about undertaking an investigation and when it is required. The Code does not require an investigation process, but some Commission members appear to think it is appropriate. The Code is useful where the facts are clear and there is no grey area. Unfortunately, many terminations are not black and white in nature and have lots of grey area. This is where a Commission member’s (legal) opinion may not equate neatly to a small business manager’s (practical) opinion when making a decision to terminate.

Employers should review their personal leave policy in relation to what medical evidence is acceptable and when. Personally, I have always had my doubts about employees completing a statutory declaration, but it may come down to how well you know the individual employee. Employers should be clear if or when they accept a statutory declaration or a certificate from a pharmacist or other type of provider.

Initiating behavioural change or disciplinary action in relation to employees taking excessive personal leave can be complex. Please contact Hunter Employee Relations for assistance.

Kind Regards
Michael Schmidt
M 0438 129 728
[email protected]
www.hunteremployeerelations.com.au