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What are your obligations if an employee is sick during their annual leave?



Accounting | Advice | Employment Legislation | Expert | General | HR | Managing | Small Business

By Tracy Angwin

When most people think of taking annual leave, they don’t anticipate spending that time either sick in bed or in hospital with a family member.

However, the reality is that unforeseeable events can occur and potentially derail an intended vacation or any leave plans.

So, what are an employer’s obligations if their employees get sick or have to take care of a loved one during their annual leave?

Annual leave and personal/carers’ leave are two separate entitlements and are therefore dealt with differently from a payroll perspective. For an employer, this means that if your employee falls sick when they are on annual leave, they are entitled to use personal/carers’ leave instead of annual leave.

What employees need to do

As an employee, if you get sick during a period of annual leave and decide to use your personal/carers’ leave instead, you are well within your right to do so if you follow the correct steps. Once you have decided that you want to take this time off as sick leave instead of annual leave, you must notify your employer as soon as possible.

Your employer might ask you for evidence which shows the reason behind why you might be entitled to personal/carers’ leave. Evidence documents include: a medical certificate, a statutory declaration or any other evidence that a reasonable person would be satisfied with.

What employers need to do

As an employer, if you are satisfied with the evidence provided then it is simply a matter of getting your payroll manager to process the day as a sick day instead of an annual leave day. This can only occur if the pay period containing the personal/carers’ leave day has not already been processed.

If your payroll has already been processed for the period containing the personal/carers’ leave day then this day would have already been processed as an annual leave day. Now, all you need to do is to get your payroll manager to reverse the hours deducted as annual leave so that they can be processed as personal leave, therefore ‘re-crediting’ the employee’s annual leave balance and reducing their personal leave balance.

Having an experienced and qualified payroll expert, who is knowledgeable about the legislations surrounding annual leave and sick leave, is essential as it ensures that this situation will be handled properly for both the employer and the employee.

Finding the correct payroll professional for your business can be tricky, which is why it’s best to ask the experts for advice.


About Tracy Angwin

Tracy Angwin is the CEO and founder of Australian Payroll Association, Australia’s leading network for payroll professionals that offers payroll advisory, training, qualifications and consulting. She is also the Director of Payroll HQ, a managed payroll service provider. Tracy has more than 25 years’ experience working in the Australian payroll sector.

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