What happens when an employee runs out of sick leave?


Personal leave can’t always fit into a tidy 10 days. What should you do when an employee runs out of sick leave? Here’s a quick refresher.

Getting sick can be intensely stressful on many fronts. When it comes to work, if an employee runs out of sick leave and has to take extended time off, things can get complicated.

All full-time employees in Australia are granted ten days of paid ‘personal/carer’s leave’ – commonly called sick leave – each year. And part-time employees accrue leave on a pro-rata basis. But long-term illness can demand much more than this. 

For HR professionals, long-term absence scenarios are a balancing act. You need to act with compassion for the employee while also considering the needs of the business. 

We asked Amy Zhang, executive counsel at Harmers Workplace Lawyers, about the key things you need to know about these situations. 

Understand employee protections

Zhang says HR professionals need to be aware of the general protections extended to employees who get sick. After the requisite ten paid days of personal leave, the employee may request to take out annual or long-service leave, if they have it saved up. 

Zhang says the employer doesn’t necessarily have to grant this but will have to prove there are “reasonable business grounds” if they refuse.

On the flip side, an employer can “arguably” request an employee take out annual leave, Zhang says. But this will be dependent on the circumstances, qualified by awards and EBAs, and is murkier legal territory. 

This should generally be avoided where an employee is on long-term sick leave due to the potential legal risks involved. However, Zhang says it’s certainly open to an employer to offer the option to an employee. 

After paid leave has been used up, employees are generally entitled to the protection of three months of unpaid leave over a 12-month period. Within this time, the Fair Work Act rules that the worker cannot be dismissed. 

After these three months, things get a little blurrier. 

“On one view, the Fair Work Act doesn’t provide specific protection to the employee after that,” says Zhang. 

“So it is possible to terminate them because they are on [extended] sick leave. However, that’s really not the end of the matter, as there may still be other claims available to the employee arising from the termination, such as unfair dismissal, general protections and discrimination claims.”

Zhang stresses that if someone is hired in place of the absent employee, this should clearly be a temporary arrangement. If not, and the original employee loses their job, again, you could face an unfair dismissal, general protections or discrimination claim. 

“You need to be mindful when that person comes back from extended leave that you’re not doing anything detrimental to their position by sidelining them, or giving their duties permanently to this temporary person, or making their position redundant,” she says. 

Unfair dismissal and discrimination claims will be assessed on a case-by-case basis. A key aspect that may be scrutinised is whether efforts were made to make “reasonable adjustments” to support the original employee back to work. 

Zhang suggests seeking legal advice if you are in this situation and want to cover all your bases.  

Consider flexible working arrangements

Employees generally have the right, under the Fair Work Act and anti-discrimination legislation, to request flexible working arrangements and “reasonable adjustments” to their role, says Zhang. 

“An employee could say, because of my illness I need to work different days or hours, or work part time for a while, or change duties or location – for example, work from home,” she says.

“And the question for the employer will be: what are the reasonable business grounds to refuse that? Are there going to be significant hardships to the business in agreeing to the request, for example?”

Zhang says the Fair Work Act and the Federal Disability Discrimination Act differ in their wording and obligations on this, so employers should consider both when considering requests from employees. 

“The employer is entitled to include something about putting the employee on notice about the fact that, if it is a very extended period of sick leave, one potential reality could be termination of employment – if it gets to that point.” – Amy Zhang, executive counsel at Harmers Workplace Lawyers

Seek extra medical evidence 

An employee needs to support their absence with medical evidence. 

Zhang says if the employer considers this lacking, they can direct the employee to provide additional medical information. (Read HRM’s previous article about the circumstances where a medical certificate isn’t enough). 

“Because an employer has duties of safety under common law, and under the Work Health Safety Act, they can issue directions for that information,” she says. For example, the business may request to speak to the employee’s medical professional directly or appoint another medic to do an independent assessment of the employee.  

“It’s useful to get the medical information as early as possible and have proactive early and ongoing discussions with employees who are on extended leave,” says Zhang. “This way, HR knows what the issue is and the likely triggers.”

She says it’s also worth remembering that, particularly with mental health conditions, someone’s need for time off may fluctuate. 

Develop a clear long-term absence policy

Having a policy on long-term absences helps keep employers and employees on the same page.  Zhang says it doesn’t have to be long and it can sit under a general leave policy.  

This should outline employees’ rights to paid and non-paid sick leave under the Fair Work Act or other instruments, such as awards and enterprise agreements. 

Zhang says it can also outline potential outcomes of long-term absence scenarios, without necessarily committing to them.

“The employer is entitled to include something about putting the employee on notice about the fact that, if it is a very extended period of sick leave, one potential reality could be termination of employment – if it gets to that point.”

Outlining the evidence the employee needs to provide and how this will be managed are also useful. 

“It’s always best practice to include what the company’s policies and processes are around providing information,” says Zhang. 

“Make sure there’s a clause in there around sick employees providing relevant, up-to-date information to their supervisors, so that their supervisors and HR can make informed decisions.”


This advice is general in nature and if you have further questions you should seek legal advice. 


Need assistance crafting helpful processes for situations like this? AHRI’s short course Develop and implement HR policies is designed to help. The next course will take place on 15 April. AHRI members receive a discounted rate.


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I imagine that this does not include employees who are off work due to workplace injuries and are on WorkCover. I’ve heard the stories of organisations paying injured employees for years as they injured themselves at work and haven’t/couldn’t get fit enough to come back to work. I understand it’s nigh impossible to sever the engagement in these cases.

More on HRM

What happens when an employee runs out of sick leave?


Personal leave can’t always fit into a tidy 10 days. What should you do when an employee runs out of sick leave? Here’s a quick refresher.

Getting sick can be intensely stressful on many fronts. When it comes to work, if an employee runs out of sick leave and has to take extended time off, things can get complicated.

All full-time employees in Australia are granted ten days of paid ‘personal/carer’s leave’ – commonly called sick leave – each year. And part-time employees accrue leave on a pro-rata basis. But long-term illness can demand much more than this. 

For HR professionals, long-term absence scenarios are a balancing act. You need to act with compassion for the employee while also considering the needs of the business. 

We asked Amy Zhang, executive counsel at Harmers Workplace Lawyers, about the key things you need to know about these situations. 

Understand employee protections

Zhang says HR professionals need to be aware of the general protections extended to employees who get sick. After the requisite ten paid days of personal leave, the employee may request to take out annual or long-service leave, if they have it saved up. 

Zhang says the employer doesn’t necessarily have to grant this but will have to prove there are “reasonable business grounds” if they refuse.

On the flip side, an employer can “arguably” request an employee take out annual leave, Zhang says. But this will be dependent on the circumstances, qualified by awards and EBAs, and is murkier legal territory. 

This should generally be avoided where an employee is on long-term sick leave due to the potential legal risks involved. However, Zhang says it’s certainly open to an employer to offer the option to an employee. 

After paid leave has been used up, employees are generally entitled to the protection of three months of unpaid leave over a 12-month period. Within this time, the Fair Work Act rules that the worker cannot be dismissed. 

After these three months, things get a little blurrier. 

“On one view, the Fair Work Act doesn’t provide specific protection to the employee after that,” says Zhang. 

“So it is possible to terminate them because they are on [extended] sick leave. However, that’s really not the end of the matter, as there may still be other claims available to the employee arising from the termination, such as unfair dismissal, general protections and discrimination claims.”

Zhang stresses that if someone is hired in place of the absent employee, this should clearly be a temporary arrangement. If not, and the original employee loses their job, again, you could face an unfair dismissal, general protections or discrimination claim. 

“You need to be mindful when that person comes back from extended leave that you’re not doing anything detrimental to their position by sidelining them, or giving their duties permanently to this temporary person, or making their position redundant,” she says. 

Unfair dismissal and discrimination claims will be assessed on a case-by-case basis. A key aspect that may be scrutinised is whether efforts were made to make “reasonable adjustments” to support the original employee back to work. 

Zhang suggests seeking legal advice if you are in this situation and want to cover all your bases.  

Consider flexible working arrangements

Employees generally have the right, under the Fair Work Act and anti-discrimination legislation, to request flexible working arrangements and “reasonable adjustments” to their role, says Zhang. 

“An employee could say, because of my illness I need to work different days or hours, or work part time for a while, or change duties or location – for example, work from home,” she says.

“And the question for the employer will be: what are the reasonable business grounds to refuse that? Are there going to be significant hardships to the business in agreeing to the request, for example?”

Zhang says the Fair Work Act and the Federal Disability Discrimination Act differ in their wording and obligations on this, so employers should consider both when considering requests from employees. 

“The employer is entitled to include something about putting the employee on notice about the fact that, if it is a very extended period of sick leave, one potential reality could be termination of employment – if it gets to that point.” – Amy Zhang, executive counsel at Harmers Workplace Lawyers

Seek extra medical evidence 

An employee needs to support their absence with medical evidence. 

Zhang says if the employer considers this lacking, they can direct the employee to provide additional medical information. (Read HRM’s previous article about the circumstances where a medical certificate isn’t enough). 

“Because an employer has duties of safety under common law, and under the Work Health Safety Act, they can issue directions for that information,” she says. For example, the business may request to speak to the employee’s medical professional directly or appoint another medic to do an independent assessment of the employee.  

“It’s useful to get the medical information as early as possible and have proactive early and ongoing discussions with employees who are on extended leave,” says Zhang. “This way, HR knows what the issue is and the likely triggers.”

She says it’s also worth remembering that, particularly with mental health conditions, someone’s need for time off may fluctuate. 

Develop a clear long-term absence policy

Having a policy on long-term absences helps keep employers and employees on the same page.  Zhang says it doesn’t have to be long and it can sit under a general leave policy.  

This should outline employees’ rights to paid and non-paid sick leave under the Fair Work Act or other instruments, such as awards and enterprise agreements. 

Zhang says it can also outline potential outcomes of long-term absence scenarios, without necessarily committing to them.

“The employer is entitled to include something about putting the employee on notice about the fact that, if it is a very extended period of sick leave, one potential reality could be termination of employment – if it gets to that point.”

Outlining the evidence the employee needs to provide and how this will be managed are also useful. 

“It’s always best practice to include what the company’s policies and processes are around providing information,” says Zhang. 

“Make sure there’s a clause in there around sick employees providing relevant, up-to-date information to their supervisors, so that their supervisors and HR can make informed decisions.”


This advice is general in nature and if you have further questions you should seek legal advice. 


Need assistance crafting helpful processes for situations like this? AHRI’s short course Develop and implement HR policies is designed to help. The next course will take place on 15 April. AHRI members receive a discounted rate.


1
Leave a reply

avatar
100000
  Subscribe to receive comments  
Notify me of
Mada
Guest
Mada

I imagine that this does not include employees who are off work due to workplace injuries and are on WorkCover. I’ve heard the stories of organisations paying injured employees for years as they injured themselves at work and haven’t/couldn’t get fit enough to come back to work. I understand it’s nigh impossible to sever the engagement in these cases.

More on HRM