The not so simple answer to the questions is, Yes you can dismiss an employee for excessive sick leave and No you can’t unless you have done everything correctly. Let me explain.
Firstly, it is unlawful to treat an employee adversely (e.g. to dismiss them) because they are absent from work due to illness or injury. But this prohibition will not apply where a worker’s employment is terminated because they are absent for three months or more (consecutively or cumulatively in a 12-month period) and they are not on paid sick leave for the duration of the absence. So this is the Yes you can part.
The caveat to this is that you can still be in breach of other laws such as anti-discrimination legislation. To ensure you don’t fall fowl of this you should raise the issue of the employee’s absence with them and ask whether there is anything you need to do to accommodate any illness or injury affecting their ability to perform their duties.
This might include asking for their authority to write to their treating doctor to get a medical report about the impact of their condition upon their ability to safely perform their duties. If you could reasonably accommodate their condition, discrimination law requires you to do so unless it would impose unjustifiable hardship upon your business.
If you are unable to accommodate them and they reach the 3 month mark then you can dismiss them for incapacity to perform duties. As always it is really important to document the entire process and make sure you are transparent with your employee.
We all know how hard it is to run a small business and you might feel the squeeze when you are down a worker but don’t be tempted to dismiss them without the proper process. The cost of making this mistake could make your life much more difficult in the long run.