Under the Fair Work Act and the National Employment Standards all permanent employees are entitled to 10 days of personal leave per year, or pro rata for part time employees.

What happens when employees have exhausted their allocation of personal leave? How much time off is reasonable? If the employee is sick for a long time, can the employment relationship be terminated?

Firstly, we need to emphasise that when considering these matters, you should assess every case individually and consider all the factors affecting the employee and the organisation.

The Fair Work Act is very clear that an employee cannot be sacked because they are sick, this is discriminatory and could warrant a general protections claim being raised, which can get extremely costly.

Once an employee runs out of paid personal leave, they are able to take unpaid leave if they aren’t fit to work due to an illness or injury without risk of losing their job if they can provide medical substantiation and if they have been away for less than 3 months in a 12-month period.

When an employee has been away for more than 3 months within a 12-month period, it is possible to terminate their employment, however the termination will still be subject to the normal rules of terminating an employee. That means the decision can still be challenged with an unfair dismissal (meaning the termination was unfair, harsh or unreasonable), or general protections (meaning that the dismissal was made because of the employee’s disability or condition).

Terminating employees for excessive absences is not entirely clear cut and poses some risk to businesses.

Some tips for you, if long term sick leave is a problem in your business:

  • Have a well-defined policy on the taking of sick/personal leave which outlines the requirement for medical substantiation
  • Deal with excessive sick leave on a regular and systematic basis.
  • Think about incorporating a provision in employment contracts for employees to undergo a medical examination if illness may be affecting an employee’s ability to do their job
  • Get expert medical advice. Its important that you can demonstrate that you are working with the employee to get an understanding of suitable duties that the employee can undertake.

Employers have a legal obligation under safety legislation to ensure their employees can safely perform the inherent requirements of their role and expose other employees to unnecessary risk, which provides some scope in terms of requesting further medical information.

Again, it is important that throughout the process, you continue to act reasonably in the context of the situation. It is an area that is fraught with risk, so very important to stay proactive about it.

We do recommend getting individual advice if you are thinking about terminating any employees for taking excessive sick leave, so that you can minimise the risks to your business. As it is an area we are asked often about, one of our experienced HR Gurus would be able provide tailored advice to your specific situation should you need it.

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