The Holiday’s Act 2003 (the Act) provides that employees in New Zealand are entitled to 10 days of sick leave each year, to care for themselves, their partners and children, or other dependants. A dependant is typically a spouse, partner, dependent child, or anyone who genuinely depends on the employee for care.
Sick leave allows employees an opportunity to take time off and recover from an illness or injury, or to care for a family member. Taking sick leave also prevents the spread of illnesses in the workplace.
Employee entitlements
All employees are entitled to sick leave after six months of current and continuous employment with the employer. This is regardless of how many hours they work a week or whether they are full time or part time employees.
If they have not had six months of continuous service, then they will be entitled if over the last six months they have worked for their employer for:
- at least an average of ten hours per week and
- no less than one hour every week or 40 hours every month.
Employees are entitled to 10 days paid sick leave for each 12-month sick leave cycle, of continuous service. The first sick leave cycle will start from 6 months of continuous employment from the date the employee started working for the employer
Importantly, the entitlement to sick leave does not vary depending on part-time or full-time employment. An employee may carry over up to 10 days’ sick leave to a maximum of 20 days’ current entitlement in any year. This means that they can carry over 10 days of unused sick leave into the next year.
Paying sick leave
Paid sick leave is only an entitlement if the sick day is a day the employee would normally have worked, had they not been sick. If the employee is sick on a day they were not rostered to work, or if they are on unpaid leave, the employer is not required to pay sick leave.
Sick leave is paid at the employee’s relevant daily pay (the rate the employee would ordinarily be entitled to) or the average daily pay if applicable. Simply put, the employee cannot be worse off by taking sick leave than they would have been if they had worked.
Sick leave is paid in the employees next pay cycle after the sick leave was taken.
Taking part days sick
The entitlement to sick leave is set out in the Act and is referred to in terms of “days” and not “hours”. This means that if an employee comes into work and then part way through the day becomes sick and goes home, it is treated as a whole day of sick leave.
However, the employer can agree with their employees to describe the entitlement in terms of hours. For example, if the employee worked a half day and then went home sick, the employer could deduct only a half day from their sick leave balance.
Can employment agreements alter sick leave entitlements?
As outlined above, sick leave entitlements are set out in the Act and regardless of any sick leave policy, employees must be provided with the minimum amount of sick leave as outlined in the legislation.
If the employer agrees to provide sick leave over and above the minimum entitlements, this should be stipulated in the employment agreement.
Sick leave during annual holidays
If an employee, or a dependant of an employee, falls sick before their scheduled annual holidays start and they continue to be sick during the holiday, the employee may request that a portion of their annual leave is exchanged for sick leave. Similarly, if an employee falls ill whilst on annual holiday they may exchange part of their annual leave to sick leave, but only if the employer agrees. The employer can ask the employee to prove the sickness before approving the exchange,
Sick leave management
It is normal for employees to become ill or be injured. Usually sickness is unforeseen and can have an impact on the employer’s operations and planning. To avoid any misunderstandings, it is important to have a sound sick leave policy in place that sets out any rules required by the employer, such as when sick leave should be reported and to whom.
Excessive sick leave
If an employee is consistently taking sick leave, it may indicate deeper issues. The employee could be experiencing burnout, performance challenges, personal issues, or lack of motivation. If the employer identifies a pattern of sick leave or excessive sick leave, they should set a time aside to talk to the employee.
In this confidential discussion, the employer should honestly and clearly voice their concerns informing the employee that they are safe to discuss their concerns. Any issues raised during this meeting should be handled sensitively and the employer must assure the employee that they will try to find potential solutions.
Once the solutions are implemented and the pattern of sick leave continues, the employer may request proof of illness for each sick leave request.
Keep in mind that:
- Sick leave can be used for any illness or injury, including stress.
- If employees have used up all their sick leave, they can ask to take sick leave in advance, annual holidays, unpaid leave, or paid special leave – subject to the employer’s agreement.
- The employer is not legally required to give employees time off work to visit the doctor or dentist for routine appointments unless specified in the employment agreement.
Proof of sickness or injury
Employees are required to inform the employer, at the earliest opportunity, of the intention to take sick leave – preferably before they are due to start work, but otherwise as early as possible after falling sick.
An employer can require an employee to provide a medical certificate if they have been sick for three or more consecutive calendar days. If the employee has been on sick leave for less than 3 days an employer can request a medical certificate if:
- They inform the employee as early as possible; and
- The employer pays the employee reasonable expenses in obtaining the medical certificate
Bear in mind that while the employer can ask for proof of sickness or injury, they cannot tell an employee which doctor to use.
What happens to unused sick leave?
Accumulated sick leave cannot be exchanged for cash, or form part of any final payment to the employee on resignation or termination, unless stipulated otherwise in the employment agreement. Sick leave entitlements are not pro-rated.
For expert advice on the various types of leave, your employees entitlements and your obligations, contact Peninsula on 0800215030.
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