With so much sickness in the community right now, it is no wonder employers and employees alike are becoming concerned about sick leave entitlements and exactly how far they will stretch.

With this in mind and to help people understand how sick leave works, we have responded to some of the key questions below. This also includes some commentary on the benefits for employers of exercising flexibility in this area and particular considerations they may wish to take into account.

Sick leave entitlements
Under the Holidays Act 2003, an employee is entitled to sick leave after completing six months’ current continuous service. Alternatively, they need to have worked an average of 10 hours a week over a period of six months and worked at least an hour a week or no less than 40 hours in every month during that time.

Once an employee has qualified for leave at the end of that six-month period, their entitlements is 10 days’ paid sick leave per year.
Consequently, the first entitlement comes after six months and the next after 18 months, and so on. It is also important to note that sick leave is not pro-rated, so part-time employees have the same entitlement as those who work full-time.

In addition to this, there is the ability to carry over unused sick leave into the next 12-month period. This can be up to a maximum of 20 days’ total entitlement for the relevant 12-month period.

Any of this leave can be used both when the employee themselves is sick or injured and where their spouse, partner, child or other dependant is sick or injured.

When an employee does not have any sick leave available
There are many reasons why employees may not have any available sick leave entitlement. For example, lots of sickness in the community means using up sick leave. Other possibilities could be that the employee has not qualified for their six-month entitlement yet. Or perhaps they have used up their leave looking after young children who have been sick or off school due to COVID symptoms.

Where an employee has run out of sick leave, there at several options available at the employer’s discretion and if both parties agree.
The most straightforward option is for the employer and employee to agree for sick leave to be taken in advance. This might be the case where an employee has worked for four months and not yet reached their entitlement. If they both parties agree to this, the employee could use the sick leave that would become available at six months, which would simply be deducted from that future entitlement.

If the employee has annual leave available, either as an entitlement or because it has accrued, a second option is to use this – again, this will be dependent on both parties agreeing.

A final possibility is that they could simply agree that the period of sickness or injury will be taken as unpaid leave.

Of course, an employer does not have to agree to any of the above options. However, it is important to note that being flexible with any leave can be a key aspect of good employment relationships. This is always an important element of a successful business, but right now it is arguably more critical than ever. Businesses the world over are continuing to talk about the Great Resignation and New Zealand is particularly vulnerable – both because of the smaller pool of workers and because many people are considering opportunities overseas. Working conditions are also a factor, including employer flexibility – whether regarding sickness, hours, working from home, or anything else. Ultimately, employees have more options right now and many will question continuing to work for an employer if they do not consider they are being treated well.

The other consideration for employers is that flexibility around sick leave is really in its own best interests. In any case when someone is sick, they should be encouraged to take time to rest and recover. For an employee to do otherwise because they have no leave available means they will potentially be spreading sickness to their colleagues and also working at a lower capacity for longer.

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Penny Varley

Payroll Administrator