It is a contravention of the general protections of the Fair Work Act for an employer covered by the Act to terminate the employment of an employee because he or she is temporarily absent from work because of illness or injury of a kind prescribed by the regulations; sec 352.
The regulation provides as follows
“3.01 Temporary absence–illness or injury
Temporary absence–illness or injury
(1) For section 352 of the Act, this regulation prescribes kinds of illness or injury.
Note: Under section 352 of the Act, an employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the regulations.
(2) A prescribed kind of illness or injury exists if the employee provides a medical certificate for the illness or injury, or a statutory declaration about the illness or injury, within:
(a) 24 hours after the commencement of the absence; or
(b) such longer period as is reasonable in the circumstances.
Note: The Act defines medical certificate in section 12.
(3) A prescribed kind of illness or injury exists if the employee:
(a) is required by the terms of a workplace instrument:
(i) to notify the employer of an absence from work; and
(ii) to substantiate the reason for the absence; and
(b) complies with those terms.
(4) A prescribed kind of illness or injury exists if the employee has provided the employer with evidence, in accordance with paragraph 107(3)(a) of the Act, for taking paid personal/carer’s leave for a personal illness or personal injury, as mentioned in paragraph 97(a) of the Act.
Note: Paragraph 97(a) of the Act provides that an employee may take paid personal/carer’s leave if the leave is taken because the employee is not fit for work because of a personal illness, or personal injury, affecting the employee.
(5) An illness or injury is not a prescribed kind of illness or injury if:
(i) the employee’s absence extends for more than 3 months; or
(ii) the total absences of the employee, within a 12 month period, have been more than 3 months (whether based on a single illness or injury or separate illnesses or injuries); and
(b) the employee is not on paid personal/carer’s leave (however described) for a purpose mentioned in paragraph 97(a) of the Act for the duration of the absence.
(6) In this regulation, a period of paid personal/carer’s leave (however described) for a purpose mentioned in paragraph 97(a) of the Act does not include a period when the employee is absent from work while receiving compensation under a law of the Commonwealth, a State or a Territory that is about workers’ compensation.”
Consequently, it is unlawful for an employer to dismiss an employee because he or she is absent from work for less than three months. What is important is that if there are multiple reasons which motivate the decision, the action will be unlawful if only one of the reasons is prohibited; see sec 360.
What is the situation if an employer dismisses an employee because he or she has been absent for more than 3 months?
The answer is that, although it may not be unlawful under the general protections for an employer to dismiss an employee if one of the reasons is an absence beyond 3 months, it remains potentially unlawful under the other general protections, for example if it constitutes unlawful discrimination (eg sec 351 which includes “physical or mental disability”) or in the event of multiple reasons any of those reasons is otherwise unlawful.
In other words, although sec 352 may not prohibit the termination of the employment of an employee because he or she may have been absent from work due to accident or illness for more than a total of 3 months, that does not render the actions of the employer lawful if they otherwise contravene any of the other general protections including adverse action for exercising a workplace right and unlawful discrimination.
See for example McGarva v Enghouse Australia Pty Ltd  FCCA 1565