This is standard corporate tomfuckery.

You fire them first (probably illegally) wait for them to lawyer up and come after you in court, enter into negotiations to settle now that the employee is under financial pressure to accept.

An employee who suffers a serious injury on the job who might have ongoing life long medical expenses can be horrifically expensive to a company often wildly exceeding a negotiated settlement.

Its morally fucked but the company would rather cut the man a very large cheque and sever all ties than have the long term liability hanging over their heads. Sacking him first just puts a timer on it that the company can afford to wait out when the employee cant.

Yes, its still wrong.