Can annual leave be turned into sick leave?


With hundreds of thousands of Australians contracting COVID-19 over the break, or isolating for days on end awaiting test results, many holiday plans were thwarted. How can employers help?

It wasn’t the holiday that we’d hoped for. Just like the 2020 New Year’s celebrations didn’t mark the end of COVID-19’s firm grasp on our work, personal and social lives as we’d hoped, the 2021-22 summer holidays, and relaxed restrictions, didn’t bring about the chilled, fun energy that we were all expecting (and desperately needed).

The Omicron variant surged through states and territories that had previously remained relatively unscathed during previous outbreaks, and gave those in New South Wales and Victoria yet another reason to cancel plans and panic at the first experience of a runny nose or tickly throat.

In short, it was a pretty anxiety riddled ‘holiday’ period. And now that many people are back to work and feeling not-so refreshed, questions such as, ‘Can I convert my annual leave into sick leave?’ are starting to crop up.

“The short answer is ‘yes’. Employees can ‘convert’ their annual leave into sick leave,” says Aaron Goonrey, Partner, Workplace Relations and Safety at Lander and Rogers. “[However, this is] subject to them complying with the usual notice and evidentiary requirements for sick leave under the Fair Work Act.” More on that in a moment.

The rules around sick leave

According to Section 89(2) of the Fair Work Act, an employee is able to take a different type of leave, such as sick leave, during their personal leave, says Goonrey. For example, if a public holiday fell during the period of time that an employee was on personal leave, this wouldn’t be deducted from their personal leave balance.

The same would apply for employees who’ve had to care for loved ones with COVID-19 during the employee’s holiday period.

“If the employee is providing care and support for a member of the employee’s immediate family or a member of their household, then pursuant to section 97 of the Fair Work Act it can be converted into carer’s leave,” says Goonrey. “Again, it would be subject to the usual notice and evidentiary requirements for carer’s leave under the Fair Work Act.”

Woman lies under a doona in bed. She looks like she is coughing.
Photo by Pavel Danilyuk from Pexels

In terms of the notice employees need to give regarding their illness, some suggest it’s best to notify employers as soon as they feel ill, even if it’s just via email during a shutdown period, rather than retrospectively. This will make it easier to recall the exact amount of sick leave that needs to be entered, as both the employer and employee have a record of the request. 

However, this isn’t a hard and fast rule. Goonrey says that “under section 107 of the Fair Work Act, the employee must provide notice of the taking of sick leave (ie. personal leave) ‘as soon as practicable’, which may be after the leave has started.”

For example, perhaps the employee is too ill to contact their employer during the first few days of infection. 

“The employee also must advise the employer of the period, or expected period, of the leave,” he says.  

“Isolation in itself is unlikely to constitute a personal illness or injury.” – Aaron Goonrey, Partner Lander and Rogers.

So what kind of evidence do employees need to share to have their annual leave reversed in place of sick leave? In the past, the answer to this question was relatively straightforward. Employees needed to present a medical certificate or statutory declaration from a doctor, says Goonrey.

But that may be challenging when you consider that many people aren’t opting for PCR tests anymore, instead confirming their diagnosis via a rapid antigen test, as per government suggestions, given the pressures on our PCR testing system.

The Fair Work Act (section 107) stipulates that employees need to provide evidence that would “satisfy a reasonable person”.

In our current circumstances, an employer may consider a text message confirming a positive diagnosis or an image of a positive rapid test as satisfactory evidence, he says.

“If an employer has a policy regarding the taking of sick leave then that should be referred to, as well as any terms of a modern award, enterprise agreement or employment contract that regulates the employee’s terms of employment.”

Other considerations

While the advice above is likely to cover many employees, there are plenty of other considerations and questions that employees, managers and HR professionals might have. For example:

Can employees claim the time spent in isolation awaiting a test result as sick leave, even if it eventually comes back as negative?

The answer to this could change depending on what an employer agrees to. Goonrey says employers could choose to grant extra leave to cover the time their people spent in isolation (which was up to 6 days in some cases).

“It would be a useful way for some employers to win the war for talent, particularly in sectors where there’s an increased demand for employees. In this regard, employers would need to look at evidence requirements and a procedure for administering something like this.”

However, he says they have no legal requirement to do this.

“An employee would need to meet the requirements under the National Employment Standards in the Fair Work Act to claim sick leave, at a minimum. Under section 97 of the Act, an employee may take sick leave because they are not fit for work because of a personal illness, or personal injury that affects them.  

“An employee who is required to isolate to wait for their COVID-19 test result may not be entitled to sick leave, unless they had a “personal illness or injury”. Isolation in itself is unlikely to constitute a personal illness or injury.”   

What if employees don’t accrue leave in the first place?

We can’t forget that plenty of Australian casual workers don’t accrue sick or annual leave. So what support is available to them if they contract the virus?

“Casual employees should see if they’re entitled to any pandemic leave disaster payments either at a federal or state level,” says Goonrey.

HR professionals and managers should ensure their casual workforce is aware that changes were made to the pandemic leave disaster payments as of 10 January 2022.

From this point, rapid antigen tests (RATs) will now be accepted alongside the existing PCR results to receive payments, to align with the government’s latest changes to testing requirements.

According to the Australian Government, from 18 January 2022 those who return a positive tests on a RAT or PCR test – and do not have access to sick leave (i.e. casual workers) – or who miss a day of work to care for someone else with COVID-19 or because they’re a close contact, could be eligible for up to $750. This is funded by both the state and federal governments.

The payments are based on the amount of hours a worker loses or is expected to lose during an isolation period of up to seven days. The details are as follows:

    • Individuals who have lost or expect to lose 20 hours or more will continue to be entitled to $750.
    • Individuals have lost or expect to lose at least a day of work or up to 19 hours will be entitled to $450.

The Government’s statement said that a financial hardship test will be introduced to ensure these payments are only given to people with less than $10,000 available in personal savings.

“I suggest casual employees go to Services Australia’s website as a first step to see if they are entitled to any relief payments,” says Goonrey. 

What else could you do?

Over at the AHRI Lounge, a member’s only LinkedIn discussion page, AHRI members have been sharing some of the things they’re doing to assist employees who’ve recently contracted COVID-19. Some of their initiatives and ideas include:

    • Start by communicating to employees that they’re entitled to substitute their annual leave (you should circulate this article), in case they haven’t disclosed their positive COVID-19 result.
    • Offering additional leave for new starters who are yet to accrue enough leave.
    • Unlimited personal leave for those who can produce a positive PCR result.
    • A 50/50 split of ex gratia annual leave.
    • Extend work-from-home arrangements for longer.
    • Allowing personal leave to go into negative balance (even for new starters).
    • Arranging meal deliveries, vouchers and care packages for those stuck in isolation.
    • Setting up regular communication with employees to check in on their symptoms/mental health (can just be text messages so as not to encroach on their personal space).
    • Ten days of additional leave for all staff (even casuals) who are impacted by COVID-19.

How has your organisation approached employees who have contracted COVID-19? Let us know in the comment section.

Thanks to Kathryn Pike MAHRI for her contributions to the final dot points.


Got an HR question you need answered? AHRI members can access AHRI:ASSIST to receive personalised responses to their curly questions. Find out more here.


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Linda N
Linda N
4 months ago

Great article, very topical and good tips

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Can annual leave be turned into sick leave?


With hundreds of thousands of Australians contracting COVID-19 over the break, or isolating for days on end awaiting test results, many holiday plans were thwarted. How can employers help?

It wasn’t the holiday that we’d hoped for. Just like the 2020 New Year’s celebrations didn’t mark the end of COVID-19’s firm grasp on our work, personal and social lives as we’d hoped, the 2021-22 summer holidays, and relaxed restrictions, didn’t bring about the chilled, fun energy that we were all expecting (and desperately needed).

The Omicron variant surged through states and territories that had previously remained relatively unscathed during previous outbreaks, and gave those in New South Wales and Victoria yet another reason to cancel plans and panic at the first experience of a runny nose or tickly throat.

In short, it was a pretty anxiety riddled ‘holiday’ period. And now that many people are back to work and feeling not-so refreshed, questions such as, ‘Can I convert my annual leave into sick leave?’ are starting to crop up.

“The short answer is ‘yes’. Employees can ‘convert’ their annual leave into sick leave,” says Aaron Goonrey, Partner, Workplace Relations and Safety at Lander and Rogers. “[However, this is] subject to them complying with the usual notice and evidentiary requirements for sick leave under the Fair Work Act.” More on that in a moment.

The rules around sick leave

According to Section 89(2) of the Fair Work Act, an employee is able to take a different type of leave, such as sick leave, during their personal leave, says Goonrey. For example, if a public holiday fell during the period of time that an employee was on personal leave, this wouldn’t be deducted from their personal leave balance.

The same would apply for employees who’ve had to care for loved ones with COVID-19 during the employee’s holiday period.

“If the employee is providing care and support for a member of the employee’s immediate family or a member of their household, then pursuant to section 97 of the Fair Work Act it can be converted into carer’s leave,” says Goonrey. “Again, it would be subject to the usual notice and evidentiary requirements for carer’s leave under the Fair Work Act.”

Woman lies under a doona in bed. She looks like she is coughing.
Photo by Pavel Danilyuk from Pexels

In terms of the notice employees need to give regarding their illness, some suggest it’s best to notify employers as soon as they feel ill, even if it’s just via email during a shutdown period, rather than retrospectively. This will make it easier to recall the exact amount of sick leave that needs to be entered, as both the employer and employee have a record of the request. 

However, this isn’t a hard and fast rule. Goonrey says that “under section 107 of the Fair Work Act, the employee must provide notice of the taking of sick leave (ie. personal leave) ‘as soon as practicable’, which may be after the leave has started.”

For example, perhaps the employee is too ill to contact their employer during the first few days of infection. 

“The employee also must advise the employer of the period, or expected period, of the leave,” he says.  

“Isolation in itself is unlikely to constitute a personal illness or injury.” – Aaron Goonrey, Partner Lander and Rogers.

So what kind of evidence do employees need to share to have their annual leave reversed in place of sick leave? In the past, the answer to this question was relatively straightforward. Employees needed to present a medical certificate or statutory declaration from a doctor, says Goonrey.

But that may be challenging when you consider that many people aren’t opting for PCR tests anymore, instead confirming their diagnosis via a rapid antigen test, as per government suggestions, given the pressures on our PCR testing system.

The Fair Work Act (section 107) stipulates that employees need to provide evidence that would “satisfy a reasonable person”.

In our current circumstances, an employer may consider a text message confirming a positive diagnosis or an image of a positive rapid test as satisfactory evidence, he says.

“If an employer has a policy regarding the taking of sick leave then that should be referred to, as well as any terms of a modern award, enterprise agreement or employment contract that regulates the employee’s terms of employment.”

Other considerations

While the advice above is likely to cover many employees, there are plenty of other considerations and questions that employees, managers and HR professionals might have. For example:

Can employees claim the time spent in isolation awaiting a test result as sick leave, even if it eventually comes back as negative?

The answer to this could change depending on what an employer agrees to. Goonrey says employers could choose to grant extra leave to cover the time their people spent in isolation (which was up to 6 days in some cases).

“It would be a useful way for some employers to win the war for talent, particularly in sectors where there’s an increased demand for employees. In this regard, employers would need to look at evidence requirements and a procedure for administering something like this.”

However, he says they have no legal requirement to do this.

“An employee would need to meet the requirements under the National Employment Standards in the Fair Work Act to claim sick leave, at a minimum. Under section 97 of the Act, an employee may take sick leave because they are not fit for work because of a personal illness, or personal injury that affects them.  

“An employee who is required to isolate to wait for their COVID-19 test result may not be entitled to sick leave, unless they had a “personal illness or injury”. Isolation in itself is unlikely to constitute a personal illness or injury.”   

What if employees don’t accrue leave in the first place?

We can’t forget that plenty of Australian casual workers don’t accrue sick or annual leave. So what support is available to them if they contract the virus?

“Casual employees should see if they’re entitled to any pandemic leave disaster payments either at a federal or state level,” says Goonrey.

HR professionals and managers should ensure their casual workforce is aware that changes were made to the pandemic leave disaster payments as of 10 January 2022.

From this point, rapid antigen tests (RATs) will now be accepted alongside the existing PCR results to receive payments, to align with the government’s latest changes to testing requirements.

According to the Australian Government, from 18 January 2022 those who return a positive tests on a RAT or PCR test – and do not have access to sick leave (i.e. casual workers) – or who miss a day of work to care for someone else with COVID-19 or because they’re a close contact, could be eligible for up to $750. This is funded by both the state and federal governments.

The payments are based on the amount of hours a worker loses or is expected to lose during an isolation period of up to seven days. The details are as follows:

    • Individuals who have lost or expect to lose 20 hours or more will continue to be entitled to $750.
    • Individuals have lost or expect to lose at least a day of work or up to 19 hours will be entitled to $450.

The Government’s statement said that a financial hardship test will be introduced to ensure these payments are only given to people with less than $10,000 available in personal savings.

“I suggest casual employees go to Services Australia’s website as a first step to see if they are entitled to any relief payments,” says Goonrey. 

What else could you do?

Over at the AHRI Lounge, a member’s only LinkedIn discussion page, AHRI members have been sharing some of the things they’re doing to assist employees who’ve recently contracted COVID-19. Some of their initiatives and ideas include:

    • Start by communicating to employees that they’re entitled to substitute their annual leave (you should circulate this article), in case they haven’t disclosed their positive COVID-19 result.
    • Offering additional leave for new starters who are yet to accrue enough leave.
    • Unlimited personal leave for those who can produce a positive PCR result.
    • A 50/50 split of ex gratia annual leave.
    • Extend work-from-home arrangements for longer.
    • Allowing personal leave to go into negative balance (even for new starters).
    • Arranging meal deliveries, vouchers and care packages for those stuck in isolation.
    • Setting up regular communication with employees to check in on their symptoms/mental health (can just be text messages so as not to encroach on their personal space).
    • Ten days of additional leave for all staff (even casuals) who are impacted by COVID-19.

How has your organisation approached employees who have contracted COVID-19? Let us know in the comment section.

Thanks to Kathryn Pike MAHRI for her contributions to the final dot points.


Got an HR question you need answered? AHRI members can access AHRI:ASSIST to receive personalised responses to their curly questions. Find out more here.


guest
1 Comment
Inline Feedbacks
View all comments
Linda N
Linda N
4 months ago

Great article, very topical and good tips

Sorry, no posts matched your criteria.
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