Managing Sick Leave the Right Way

Deborah Peppard - HR Director

Sally is sick. Really sick.  Sally can’t come to work and has now run out of sick leave entitlements.  Sally doesn’t know when she’ll be back at work, so you’re scratching your head wondering ‘what do I do now’?  Sally is one of your customer service team who are drastically under the pump now with a key employee missing from their team…. Sally calls to say that she has to have surgery.  Sally now has complications with her surgery and won’t be back at work for the foreseeable future….. Sally is really sorry.


We hear you screaming from here! It’s frustrating and really hard to keep your business operating at optimal      levels.  Customer service levels are being impacted and the rest of the team are feeling overworked…  To get a temp up to speed will take time and money which will be a lost investment when they are no longer needed.  Sally is still employed so you can’t just replace her.  Or can you?

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Good business owners generally have a genuine care for their employees and their health and well-being.  However, it’s hard to ignore the impact on you and your business when you have someone off on sick leave for a significant period.  The Fair Work legislation does provide employers with some mechanisms in these types of cases so let’s take a look at them.  

Firstly, and most importantly, you should always be very careful about taking action against an employee who is taking a period of sick leave, whether paid or unpaid.   An employee has a workplace right to be unwell.   Therefore, taking inappropriate action due to them exercising this workplace right will likely end in an adverse action claim.  An adverse action is time consuming as the onus is on the employer to prove the action wasn’t taken for such a reason.  And an adverse action can be costly as financial compensation is uncapped. The second consideration is that ethically, we would expect that a good business manager or owner would not punish an employee for being genuinely unwell.

Employers Rights 
However, the Fair Work legislation does allow an employer to terminate employment in the event of an extended period of unpaid sick leave.  An extended period is determined as three consecutive months, or three months within a twelve-month period.  Termination in this case could potentially be considered reasonable if the employee has been unable to fulfil the inherent requirements of the role for an extended period and evidence (usually medical) confirms that the employee cannot fulfil their requirements (you can’t make an automatic presumption).

The three month period must be calculated from when the employee’s sick leave entitlements were exhausted and they commenced a period of unpaid leave or accessed their accrued annual leave entitlements. If an employee has amassed huge amounts of sick leave entitlements through being a reliable and long-term employee, then you must simply wait for them to get better and return to work. 

However, please again tread carefully!  The three month unpaid leave period is not unto itself enough to make a case of reasonableness with regards to termination of employment.  Consideration should be given to a range of factors such as the employees length of service, whether you can back fill the role while you wait for the employee to return to work, whether the employee is likely to return imminently, whether you need to recruit a replacement to be able to operate your business successfully and so on.  Once you have considered all of these factors, you may have the right to terminate the employment legally.  If you decide to take this step make sure you follow procedural fairness in actioning the termination. 

Excessive Sick Leave
But wait!  Steve is also a problem employee. Every time he accrues a sick day, he takes it. He’s a serial sick leaver! What can you do?

Well, again, you can actually take steps to manage this.  While you can’t take action against Steve for exercising a workplace right, you can definitely have a conversation with Steve where you advise him that he has established a pattern of absence (every time he accrues a day he takes a day), and you can advise him that he will now be required to provide a medical certificate on each and every occasion that he is unwell and unable to attend work. 
  
And then there’s Susan!   Susan takes the day off after pay day.  Every.  Single.  Month.  Same solution – Susan has established a pattern of absence and you can discuss what her reporting and evidence requirements are in the future…. Of course, you may want to spend some time reflecting on why Steve and Susan are taking this leave, and whether they are disengaged from their roles and what the cause might be……. but that’s a topic for another day.

If you do wish to be able to have these types of conversations with employees such as Steve and Susan, we recommend having a very clear policy and guidelines around establishing patterns of absence so that employees can’t claim that they are being singled out or discriminated against. 

Best case scenario
So, what’s up with good old Sally? Well, after six weeks of unpaid leave Sally eventually advised that she was okay to return to work.  Being the awesome and savvy employer that you are, you asked Sally to provide a fit for work certificate to make sure she was okay to carry out all of her normal duties without risking her health and well-being, and you welcomed her back with open arms and a sob of relief!
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We are here to help with all types of employee issues, so if you need help with navigating or managing regular or long term absences, or any other employee matter, call us on 9590 0844 or email us at here2help@hrstaffnstuff.com.au

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