About 18 months ago one of my employees injured his back at work and went off on ACC. Since he has been off work, he has given me a number of medical certificates stating when he will be fit enough to return to work. Each time that date arrived he produced a new medical certificate extending the time. ACC have now increased my experience rating by several thousand dollars. Can I dismiss this employee for prolonged absence from work? If so, will this reduce my ACC experience rating?

There comes a point when an employer can fairly cry halt and justifiably dismiss an employee for prolonged absence from work. When that point comes depends on a number of factors including the terms of the employee’s employment contract, whether he or she has any sick leave available, his or her length of service, and whether he or she holds a key position. Generally, an employee who has been absent for more than three months is at risk of having his or her employment terminated justifiably.

Dismissals for prolonged absence from work must be carried out in a procedurally fair manner. One way of doing this is to write to the employee advising that you are considering whether or not to continue his or her employment and inviting him or her to a meeting to discuss the issue. You should request the employee provide you with a medical report stating the prognosis for recovery and a date when he or she is likely to be fit enough to return to work. You should also advise the employee that he or she may bring a representative to the meeting if they wish. You must consider fairly whatever the employee puts forward at the meeting before deciding on whether or not to terminate his or her employment.

As regards your ACC experience rating, the Accident Compensation and Rehabilitation Insurance Act provides that the ACC premium payable by an employer may be increased or reduced according to the accident record of or attributable to the employer. The basis and procedure for adjusting the premium is set by regulation. Currently, employers are liable to contribute to the cost of an employee’s injuries for five years regardless of whether or not they employ that employee for the entire period. Dismissing your employee will make no difference to your experience rating and the premium you pay. Given the large amount of money involved, it may be worth your while to hire a private investigator to check that your employee’s injury is genuine.