Long-Term Sick Leave and Return to Work: Your Questions Answered

What a 2026 Fair Work decision means for small and medium businesses

One of the situations we get asked about most often at Fresh HR Insights is what to do when someone has been off on long-term sick/ sick leave for months, keeps sending through the same medical certificate, and won’t really engage in any conversation about coming back. It’s an awkward spot. You want to do the right thing by your employee, but the work still has to get done, and you can’t leave a role in limbo forever. A recent Fair Work Commission decision, Sim v Monash Health (2026), gives employers some real clarity here, and for once, it’s reasonably good news for businesses that go about things the right way. Here’s how it works.

Can you dismiss an employee who is on long-term sick leave?

Short answer: yes — but only in specific circumstances, and only if you’ve run a fair process first. An employee isn’t shielded from dismissal simply because they’re unwell. What matters is whether they can perform the inherent requirements of their role, with or without reasonable adjustments, and whether you’ve genuinely tried to work that out with them. If the medical evidence shows they can’t do the core parts of the job for the foreseeable future, and they won’t cooperate with your reasonable requests for the information you need to assess adjustments, then dismissal can be lawful.

What does the law actually say?

Two pieces of legislation pull in opposite directions, and the trick is holding both at once. The Fair Work Act 2009 (Cth) requires employees to provide reasonable evidence of their unfitness for work in order to be paid personal (sick) leave, usually a medical certificate or statutory declaration. Anti-discrimination law, on the other hand, makes it unlawful to dismiss someone because of an impairment. But, and this is the important bit, that protection has a limit: it doesn’t apply where the employee simply can’t perform the inherent requirements of the role, with or without reasonable adjustments. Read together, the law asks you to make a real effort to accommodate a return, while giving you a lawful path forward when a genuine return isn’t possible.

What happened in Sim v Monash Health?

The employee held a full-time role that involved time-sensitive work, ongoing monitoring and follow-up, and consistent communication with a range of stakeholders; in other words, a job that needed someone present and engaged for the full week. He was off on sick leave for an extended period and provided medical certificates from his treating practitioner stating that, at best, he could manage four hours per week of “non-stressful” work.

The employer took the view that this proposal was too vague to implement and, in any case, wouldn’t allow the genuine and reasonable requirements of the role to be met. It asked the employee for further information so it could properly consider what adjustments, if any, might make a return possible. The employee pushed back, arguing the certificates were time-limited and didn’t prove he could never return, and that the employer should have proposed alternative duties for his doctor to assess.

The Commission didn’t accept that. It noted the employee had supplied identical certificates over a period of more than six months, which established he couldn’t meet the inherent requirements of the role. In those circumstances, he was obliged to cooperate with the employer’s reasonable request for the additional information it needed. As the Commission put it, an employee can’t simply keep issuing certificates of capacity and throw the whole question of reasonable adjustments back onto the employer to solve alone. The dismissal was upheld.

Why wasn’t “four hours a week of non-stressful work” good enough?

On its own, it wasn’t something the business could actually put into practice. “Non-stressful work” isn’t a defined set of duties, and four hours a week doesn’t come close to covering a role built around time-sensitive tasks and regular stakeholder contact. An adjustment has to be genuinely workable and still allow the core purpose of the job to be met; it isn’t reasonable to strip out the very things that make the role what it is. The employer wasn’t refusing to consider adjustments; it was saying it couldn’t assess them properly without more detail, and the employee wouldn’t provide it.

Doesn’t a medical certificate cover the employee for everything?

This is the misunderstanding at the heart of the case, and it’s common. A medical certificate does one job: it supports the employee’s entitlement to be paid sick leave. It does not discharge a separate obligation the employee has to cooperate when you, as the employer, are trying to work out whether a return to work is possible and what it might look like. Producing a certificate and then declining to engage any further doesn’t meet that obligation. Both sides have to participate in the return-to-work conversation.

What information can an employer reasonably ask for?

The key word is reasonable; the request has to be genuinely connected to assessing capacity and adjustments, not a fishing expedition into someone’s private medical history. In practice, a fair request usually looks like asking the treating doctor (or an independent medical examiner) to comment on things like:

• what specific duties the employee can and can’t currently perform;
• the likely timeframe for any improvement or return to full capacity;
• whether particular adjustments reduced hours, modified duties, or a graduated return would help, and for how long;
• any restrictions the employer needs to be aware of to keep the employee safe.

Giving the doctor a copy of the actual position description helps enormously here, because it lets them assess capacity against the real job rather than a job in the abstract.

What are “inherent requirements”, and how do we work them out?

Inherent requirements are the essential parts of a role the things that, if you took them away, would mean the job simply wasn’t being done. For a delivery driver, holding a licence and being able to drive is inherent; the colour of the van isn’t. The clearest way to protect your business is to have these spelled out in a current, accurate position description before any issue arises, so there’s no argument later about what the job actually required. If your role descriptions are vague or years out of date, that’s worth fixing now it’s exactly the kind of thing our HR audit is designed to pick up.

What counts as a “reasonable adjustment” — and how far do we have to go?

Reasonable adjustments are practical changes that help an employee perform the inherent requirements of their role despite an injury or condition, a phased return to hours, modified duties for a defined period, changes to equipment or the physical set-up, or flexibility around start and finish times. What you’re not required to do is fundamentally redesign the job, remove its inherent requirements, or take on a cost or disruption that amounts to unjustifiable hardship for a business of your size. The obligation is to genuinely explore adjustments, not to guarantee one exists. Sometimes, after a proper process, the honest conclusion is that no reasonable adjustment will bridge the gap. That’s the situation the employer in Sim was in.

What’s the risk if we get the process wrong?

This is where small businesses get caught, because the outcome can be right but the process wrong. Move to dismissal without first making genuine, documented attempts to assess capacity and adjustments, and you leave the door open to an unfair dismissal claim, a general protections (adverse action) claim, or a disability discrimination complaint, each of which can be costly and stressful well beyond the dollars involved. The lesson from Sim isn’t “you can dismiss unwell employees”. It’s “you can act when you’ve done the groundwork and the employee won’t meet you halfway.” The groundwork is everything.

What should a small business actually do?

If you’ve got someone on extended sick leave and you’re not sure where you stand, a sensible, defensible approach looks like this:

• Stay in regular, supportive contact; check in on the person, not just the paperwork.
• Make sure the role’s inherent requirements are captured in a current position description.
• When capacity becomes unclear, put a clear, reasonable request for medical information in writing, and explain why you need it.
• Give the doctor the position description so they can assess capacity against the real job.
• Genuinely consider any adjustments suggested and document what you considered and why.
• Keep records of every conversation, request and response. If it isn’t written down, it didn’t happen.
• Only consider ending employment once you’ve given the employee a fair opportunity to participate and take advice before you do.

On a related note, if you’re dealing with the flip side- a role that’s genuinely no longer needed- our guide on small business redundancy walks through how to do that fairly too.

This article is general information only and isn’t a substitute for advice tailored to your specific situation. Every set of circumstances is different, so please get in touch before acting on anything here.