Employee sick over Christmas? Must re-credit leave

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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).

  • Lee on 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?

  • Gary Taylor on 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.

  • MM on 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

  • LJ on 8/01/2013 3:05:34 PM

    How does this apply if an employee is sick during a period of shutdown, and when all employees are on forced annual leave?

  • John Howie on 21/02/2013 10:18:48 AM

    This is another case of the Fair Work Act being out of touch with small businesses and employers. The employer should not have to pay sick leave is an employee gets ill (for whatever reason) during annual leave. Sick leave should only apply to illness, with all supporting documents, that occurs during outside of annual leave.

  • February on 21/02/2013 5:59:05 PM

    You need not worry - Fair Work Australia does not do anything anyway, seriously have you tried to contact Fair Work Australia ? You get put "on hold" for 20 minutes !!! Bill Shorten and Kate Ellis need to ring Fair Work Australia and see how the service really works.

  • Greg Schmidt on 29/05/2013 11:28:26 AM

    I fundamentally disagree with the interpretation of the NES expressed in the main article. Section 89(2) of the Fair Work Act only applies if a period of "other leave" is included in a period of annual leave - and a period of paid personal leave could only be included if section 97 of the Act applies. Section 97 provides that "An employee may take paid personal/carer's leave if the leave is taken ... because the employee is not fit for work because of a personal illness, or personal injury ...". An employee absent on approved annual leave does not require approval for absence because they become ill - they already have approval to be absent. Section 97 therefore does not apply to the absence, and there is no grant of personal leave inserted into the existing period of annual leave.

    Having said that, there's nothing to prevent an employer allowing an employee to have leave re-credited in this way - but that's a policy decision, not a legislated obligation under the NES.

  • MM on 31/05/2013 4:05:57 PM

    Sorry Greg. While you might fundamentally disagree, it is the opinion of Fair Work should an employee complain that would be the deciding factor. My organisation has put this question to FWO on more than one occasion and always gotten the same answer - employees can claim for any period of personal/carer's leave in accordance with the Act even when they were on paid annual leave at the time.

    I can understand that this leaves an employer with a great deal of uncertainty and the possibility that an employee will abuse the leave "loophole", but the legislation is what it is.

  • Lisa on 28/11/2013 3:42:24 PM

    Like LJ I'm also keen to know what happens when someone falls ill during a forced shutdown period (eg. Christmas - New Year), and therefore they wouldn't have been able to come to work even if they were healthy. I can see this is a loophole for employees to take advantage of, but have been unable to find an answer to this so far, so would appreciate anyone being able to assist.

  • ParraHR on 29/11/2013 3:04:38 PM

    It all comes back to IF the employee challenges it at Fair Work. A lot of employers will still say to staff that as the person was on annual leave already. Your sick leave is for when you cannot come into work and it protects your earnings (as stated in a comment above) - it is not an entitlement.

    Maybe old world thinking - but I would say the majority of employers see it and apply it that way.

  • Community HR on 4/12/2013 2:59:59 PM

    Lisa,
    If the forced shutdown period is taken as AL then the provision to re-credit AL, in place of paid personal leave, will still apply.

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