In this article, we discuss what employers and employees need to know about sick leave entitlements and managing workplace sick leave policies.

Every day, employers are faced with managing their employees’ sick leave. In recent times, organisations of all sizes have taken a flexible approach to sick leave, offering their staff members sick leave over and above their minimum statutory entitlements.

Minimum entitlements

Under the Holidays Act 2003, after six months of continuous employment, every employee is entitled to a minimum of five days paid sick leave per subsequent 12 months of employment. Paid sick leave can only be taken on a day that would otherwise be a normal working day for the employee. If the employee is away for less than three consecutive days, the employer requires the employee to provide a medical certificate, and the employer is obligated to pay for the reasonable costs associated with obtaining a medical certificate. However,  if the employee is away for a longer period, the obligation to pay for a medical certificate falls on the employee.

Sick leave is available to be taken when an employee or their spouse, partner or dependent is sick or injured. For more information on minimum leave entitlements and payment for sick leave, contact our employment team today.

Bespoke sick leave policies

In addition to these minimum statutory requirements, most workplaces have customised their own sick leave policies to fit their organisational culture and the nature of the work they do.

Examples of such policies include:

  • Wellbeing leave offered by Xero, which builds on the scope of traditional sick leave in recognition of employees needing to take time to care for their personal needs which do not necessarily fit into the category of sick leave discussed above, but nonetheless impact on their wellbeing and productivity;
  • Unlimited sick leave offered by ANZ, which allows staff to manage their own sick leave and can take the financial pressure off those who need to take time off work due to serious medical conditions; and
  • 10 days of sick leave per year, which is offered by some public sector organisations. This is also the minimum entitlement in Australia. 

Get in touch with our employment team if you require assistance drafting or implementing these policies.

Sick leave procedure

Irrespective of the amount of the entitlement, the conduct of the parties when sick leave is taken is subject to the mutual obligation to act in good faith. Below, we discuss a case example of ineffective management of sick leave policies and the implications of this on both the employee and employer.

In 2019, the Employment Relations Authority (“ERA”) ordered TMC Bloodstock Limited (“TMC”) to pay Alicia Downs, a former employee, for constructively dismissing her after she called in sick. The ERA found that TMC’s warnings about properly notifying them of her illness were vague, in breach of duty of good faith and led to Ms Downs’ disadvantage.

In particular, the ERA took issue with the following parts of the process:

  • Giving Ms Downs four warnings without following the proper process;
  • Referring to Ms Downs’ poor attitude and work performance out of the blue when discussing her absence for sickness;
  • Ignoring Ms Downs’ feelings of stress;
  • Only broadly referencing the employment agreement, which amounted to unclear communication;
  • Requiring a medical certificate and refusing to pay for this – in breach of the employment agreement;
  • Ignoring Ms Downs’ attempts to clarify the sick leave policy; and
  • Blocking Ms Downs’ return to work.

The ERA found Ms Downs’ dismissal was unjustified. TMC was not keeping Ms Downs away from work for genuine reasons and had inadequate policies and procedures for dealing with sick staff. However, communication in an employment relationship is a two-way street. Ms Downs’ initial award was reduced by 25 per cent for her part in unclear and untimely communication. In the end, Ms Downs received $5,166.32 (gross) in lost wages, $382.68 (gross) in sick leave and $12,000 in compensation.

For more information

In a global pandemic environment, sick leave provisions are an integral part of any organisation’s employment agreement and workplace policies. If you are considering updating your sick leave policies, contact our employment team today on 04 472 0020.

Managing sick leave - JB Morrison Lawyers