Employee sick over Christmas? Must re-credit leave

by HCA28 Nov 2013

It’s not an unheard of dilemma: an employee becomes ill whilst on annual leave. “I’d like to transfer the days during my annual leave that I was ill for my sick leave please”, an employee might say. But instead of laughing in their face, the Fair Work Act sets it out in black and white.

According to one IR expert, s.89(2) of the Fair Work Act addresses this issue. “If an employee falls ill during a period of annual leave, they are entitled to claim this period as [sick] leave and not annual leave. Obviously the employee will have to support the claim for [sick] leave with the requisite proof,” Daniel Houlihan from First IR Consultancy said.

Houlihan added that, much like workers’ compensation, the accrual of sick leave is a no-fault scheme. Therefore whether it’s a case of an accidental injury or illness, or an employee doing something reckless and becoming sick or injured as a result, employees are entitled to access their paid sick leave regardless of why they became ill or injured.

Yet as one HR consultant pointed out, the provision is in place for a good reason. Principally, the whole provision encourages employees to have a restful break that they enjoy, and can then come back to work happy and healthy. “It doesn’t matter if [an employee] goes overseas, interstate, or even stays at home, if they get the flu or even some tropical disease, and it means they’re bedridden – [an employee] can come back to work and legitimately ask for that leave to be re-credited,” Linda Norman from HR Plus told HC.

Norman added that in her experience, this provision of the Fair Work Act is not something that employers are commonly aware of. “It perhaps has that ‘little bit odd’ factor, maybe a difficult to understand, and some people would even have difficulty accepting that it is in fact a legitimate provision,” she said.

However, transferring annual leave for sick leave does not work the same way for long-service leave and maternity leave – these provisions differ from state-to-state, and this in not covered within the National Employment Standards (NES).


  • by Lee 18/12/2012 3:27:31 PM

    Is there a time period that applies? ie. Does the employee need to be sick for a period of 5 days or does it apply to any time period?

  • by Gary Taylor 18/12/2012 4:52:50 PM

    Interestingly, this provision does not apply consistently outside of Australia. Several countries work on the basis that paid sick leave is when the individual is too sick to work - it is a protection of earnings. Therefore, when someone has flu while on vacation, the "tough luck" principle could apply, in that the individual would not have been coming to work, and therefore cannot claim additional vacation. Some countries have a compromise, whereby only days hospitalized can be swapped back.

  • by MM 18/12/2012 11:25:19 PM

    Don't forget one key thing that still applies - even when ill during annual leave, the employee has to notify the employer as soon as practicable of their illness and advise of the expected duration. Unless the employee is in the "wilds of Africa", there's no good reason why they shouldn't notify the employer while they are on annual leave instead of waiting a few weeks to let the employer know when they get back from leave. And while it would be a brave employer who said "no" - they are within their rights to refuse to convert annual leave to sick leave if the employee themselves hasn't complied with the notification requirements of Section 107 of the Fair Work Act

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