All permanent Australian employees are entitled to 10 days of personal leave per year, under the Fair Work Act and the National Employment Standards. This is calculated 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?

Case by case basis for sick leave

We must emphasise that you need to consider each case individually. Think about 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 protection claim being raised, which can become 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. This can happen without the risk of losing their job if:

  • they can provide medical substantiation, and
  • if they have been away for less than three months in a 12-month period.

When absence is prolonged;

When an employee has been away for more than three 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 claim (meaning the termination was unfair, harsh, or unreasonable), or
  • a general protection claim (meaning that the dismissal was made because of the employee’s disability or condition).

Tips for managing prolonged sick leave

Terminating employees for excessive absences is not an entirely clear-cut process and poses some risks to businesses. Here are some tips for you, if long-term sick leave is a problem in your business:

  • Have a well-defined policy on taking sick/personal leave which outlines the requirement for medical substantiation.
  • Deal with excessive sick leave on a regular and systematic basis
  • Think about adding 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. It’s important that you can demonstrate that you are working with the employee to get an understanding of suitable duties that the employee can undertake.

Your obligations

Employers have a legal obligation under safety legislation to:

  • ensure their employees can safely perform the inherent requirements of their role, and
  • not 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 it’s very important to stay proactive about it.

We 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.

This is a subject clients raise often. One of our experienced HR Gurus can provide advice tailored to your specific situation.

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