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Sick Leave: The Complete Guide for Employers

Published April 7, 2024 (last updated on June 28, 2024) | Adam Wyatt - Content Writer

A woman in bed sick with the flu

Managing sick leave effectively is crucial for any business, ensuring employees are supported during personal illness while maintaining operational efficiency. Australian employment law, particularly around entitlements and record-keeping, can feel intricate.   

This guide provides employers with comprehensive insights into managing sick leave, outlining legal obligations, best practices and how to build a supportive work environment.  

Understanding sick leave entitlements 

In Australia, full-time employees are entitled to 10 days of paid sick and carer's leave per year. Part-time employees receive a pro-rata amount based on their hours of work. This entitlement accrues progressively during the year and can be carried over into future years if not used.  

Employee entitlements: 

  • Full-time: 10 days of paid sick leave per year (pro-rata for part-time). 

  • Accrual: 1/26th of an employee's ordinary hours worked each year. 

  • Unused Leave: Carries over to the next year. 

  • Evidence: May be required to support leave requests. 

Managing sick leave requests 

When an employee calls in sick, handling the situation efficiently and fairly is important. Here's a breakdown of key considerations regarding evidence and notice:  


  • Employees should notify you of their sick leave absence as soon as possible, ideally before their shift begins. 

  • Understand that unforeseen circumstances may prevent immediate notification. In such cases, encourage employees to notify you at their earliest convenience. 

  • Your workplace policy can outline specific expectations around notice periods. 

Evidence requirements 

While you can request evidence to support a sick and carer's leave request, the Fair Work Ombudsman advises a balanced approach. For short absences, a self-declaration may suffice. For longer absences, a medical certificate might be appropriate.  

Sick leave: Employer responsibilities  

A strong grasp of sick and carer's leave regulations safeguards your business. Non-compliance with the Fair Work Act 2009 National Employment Standards (NES) can result in hefty fines and penalties. These are your responsibilities regarding sick leave in Australia:  

  • Providing paid leave: Upholding employee entitlements is paramount. This includes full-time employees receiving 10 days of paid sick leave per year (pro-rata for part-time) and allowing them to accrue leave based on ordinary hours worked. 

  • Record keeping: Maintaining meticulous records is crucial. Track employee leave entitlements, usage, and carry-over balances. The Fair Work Ombudsman recommends a minimum record-keeping period of seven years. 

  • Confidentiality: Maintain employee medical information confidentially. Only disclose it to those with a legitimate need to know, such as relevant managers or HR personnel. 

Best practices for employers 

Your obligations extend beyond simply granting employees their entitled sick leave. Here's a breakdown of your key responsibilities as an employer: 

  • Clear policies: Establish clear sick leave policies, including notification procedures and evidence requirements, and ensure these are communicated effectively to all employees via your employee handbook

  • Supporting employee wellbeing: While not a direct legal requirement, promoting a healthy work environment goes a long way. This can include flexible work arrangements for short-term illnesses, access to employee assistance programs (EAPs), and encouraging employees to prioritise their health and wellbeing. 

  • Managing infectious diseases: The emergence of COVID-19 has highlighted the importance of clear protocols for infectious diseases. Develop a policy outlining procedures for employees who are unwell and need to isolate while also considering the needs of vulnerable colleagues. 

  • Supportive culture: Create a workplace culture that encourages employees to take sick leave, when necessary, without fear of reprisal or job loss. This supports not only the well-being of the individual employee but also the health of the broader workplace. 

  • Return-to-work plans: For employees on extended sick leave, consider implementing return-to-work plans that allow for a gradual return to full duties, ensuring the employee is fully recovered. 

Navigating long-term illness 

While most sick leave situations are short-term, some employees may experience extended absences due to long-term illness. Here's how to navigate these situations effectively: 

  • Open communication: Maintain open communication with the employee throughout their absence. Regular check-ins demonstrate your support and allow you to assess their recovery progress and potential return-to-work date. 

  • Reasonable adjustments: The Fair Work Act encourages employers to consider "reasonable adjustments" to assist employees with long-term illnesses in returning to work. This could involve modified duties, flexible work hours, or accessible workstations. The JobAccess website offers valuable resources for workplace modifications. 

  • Leave options: Explore alternative leave arrangements beyond paid sick leave. Depending on the circumstances, options may include unpaid leave, personal leave, or long service leave (if applicable). 

  • External support: Depending on the illness, consider connecting the employee with relevant support services, such as employee assistance programs (EAPs) or government assistance programs. 

  • Performance management: If an employee's long-term illness significantly impacts their ability to fulfil their job duties, standard performance management processes may need to be followed. This should be done with sensitivity and in consultation with HR professionals. 

  • Seeking legal advice: For complex situations involving long-term illness and potential termination, consulting with an employment lawyer is recommended. They can advise on your legal obligations and ensure fair treatment of the employee. 

Remember, a supportive approach to long-term illness fosters employee loyalty and can lead to a smoother return to work. It's also crucial to balance employee wellbeing with the need to maintain business continuity.  

Fostering a healthy workplace 

A healthy workplace goes beyond simply managing sick leave. By proactively creating a culture of wellbeing, you can reduce employee illness, boost morale, and improve overall productivity. Here are some key strategies: 

  • Promote work-life balance: Encourage employees to maintain a healthy balance between work and personal life. This can involve offering flexible work arrangements, respecting designated break times, and discouraging excessive overtime. 

  • Ergonomics: Invest in ergonomic workstations and equipment to prevent musculoskeletal disorders, a common cause of sick leave. 

  • Wellness programs: Consider implementing wellness programs that encourage healthy habits. This could include subsidising gym memberships, offering on-site yoga classes, or organising healthy lunch options. 

  • Open communication: Encourage open communication about health concerns. Normalise discussions about mental health and provide resources for employees seeking support. 

  • Flu vaccinations: Offer flu vaccinations to employees during flu season. This simple measure can significantly reduce the spread of influenza in the workplace. 

  • Hygiene practices: Promote good hygiene practices throughout the workplace by providing hand sanitiser stations, encouraging regular handwashing, and reminding employees to stay home when sick. 

  • Positive work environment: Cultivate a positive and supportive work environment. This can involve recognising employee achievements and celebrating successes. When employees feel valued and supported, they're more likely to prioritise their wellbeing. 

Supporting employees 

Paid sick leave is a fundamental employee entitlement that supports the health and wellbeing of your workforce. By understanding and effectively managing sick leave, employers not only ensure compliance with legal obligations but also promote a positive and supportive workplace culture. A healthy workforce is a productive workforce.  

Seeking further guidance? 

For employers seeking more detailed advice on managing sick leave or creating a supportive work environment, Peninsula can offer tailored support and guidance.   

Peninsula specialise in employment relations and work health and safety, providing the expertise you need to manage sick leave effectively and promote a healthy workplace. Contact us today for a free consultation. 

Frequently Asked Questions

Does sick leave accrue?

Yes, sick and carer's leave accrues for full-time and part-time employees from their first day of employment, based on their ordinary hours of work. 

How much sick leave do employees have per year?

Employees are entitled to 10 days of sick leave per year if they are full-time, with part-time employees receiving a pro-rata amount based on their hours worked. 

Does sick leave rollover?

Yes, any unused sick leave balance rolls over to the next year, allowing employees to accumulate leave.

Personal leave vs. sick leave: what's the difference?

Personal leave and sick leave are part of the same entitlement, also known as personal and carer's leave, covering both sickness and caring responsibilities. 

How to calculate sick leave

Sick leave can be calculated as 1/26th of an employee's ordinary hours of work over a year. 

How many hours of sick leave per year?

The hours equate to 10 standard workdays for full-time employees, with part-time employees accruing leave on a pro-rata basis. 

Do casual employees get sick leave?

Generally, casual employees are not entitled to paid sick and carer's leave under the National Employment Standards. However, Victoria's Sick Pay Guarantee allows casual and contract workers in specific roles up to 38 hours a year of sick and carer's pay, paid at the national minimum wage. 

Can an employer refuse sick leave?

Employers can request evidence of personal illness or injury. Without such evidence when requested, an employee may not be entitled to paid leave. 

Can you use annual leave as sick leave?

While not directly interchangeable, employees may choose to use annual leave if they prefer or if they have exhausted their sick leave entitlement. 

Does sick leave get paid out?

Sick and carer's leave generally does not get paid out upon termination of employment except in specific circumstances outlined in a registered agreement. 

Can you get fired for calling in sick?

Employees are protected from being dismissed for taking sick leave, provided they offer evidence of their illness or injury and have been on paid sick leave for less than three consecutive months or still have paid sick leave available. 

What happens if an employee is on long-term sick leave?

The Fair Work Act offers some protection for employees on long-term sick leave, even after exhausting their paid leave. Consult the FWO website or seek legal advice for specific situations. 

Can I dismiss an employee due to illness?

Generally, no. You cannot terminate an ill or injured employee. The Fair Work Act offers protection against unfair dismissal. During genuine illness, dismissal is usually unfair unless there are exceptional circumstances. 

An employee seems to be calling in sick excessively. What should I do?

It can be challenging when an employee calls in sick frequently. Here are some steps you can take.

  • Track absence patterns: Document all sick leave call-ins, including dates and reasons provided (if any). This establishes a record and helps identify patterns.
  • Review your policy: Ensure your sick leave policy is clear and accessible to employees. Reread the policy yourself to ensure you're following the guidelines for evidence requirements and communication protocols.
  • Open and honest conversation: Schedule a private meeting with the employee to discuss their frequent absences. Approach the conversation with empathy and concern for their wellbeing.
  • Focus on understanding: The goal is to understand the reasons behind the frequent absences. Are they related to a genuine health issue, personal challenges, or something else?

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