Michael O'Flaherty
Published on

Whether you’re an employee or an employer, many people have had a time when they have needed sick leave. While most incidences of sick leave are by the book, there are some times that issues can arise.

The commonly recurring sick leave issues that regularly occur in employment relationships are:

  • real or perceived excessive sick leave by employees;
  • concerns around whether the sick leave is genuine; and
  • justifying termination for medical incapacity. 

As is the case with most employment relationship matters, taking good notes can avoid later headaches for employers. This is especially so in cases where employers consider commencing an investigation into whether an employee has taken excessive sick leave.

If an employer considers that an employee is taking sick leave too regularly then it pays to make a record of this along the way, as well as communicating those concerns to the employee when the issue arises.

In New Zealand, sick leave entitlements change on 24 July 2021.

Some recommendations are:

Real or perceived excessive sick leave by employees

Where an employer has concerns about the amount of sickness absence of an employee, it should keep a track of that sickness absence and bring it to the attention of the employee in a formal disciplinary setting. At that meeting, the employer should advise the employee of its concerns and set clear targets for improvement, making clear the possible consequences of a failure to improve or sustain an improvement.

Concerns around whether the sick leave is genuine

Where the employer has suspicions about the genuineness of a sickness absence, it should require the employee to obtain a medical certificate in accordance with s68 of the Holidays Act 2003.

Where the employer has suspicions about the genuineness of a sickness absence despite the provision of a medical certificate, it should clearly advise the employee of those suspicions, and ask consent of the employee to contact the practitioner who issued the medical certificate. 

In this case, the employee is under no obligation to provide their employer consent to approach their practitioner. This will ultimately come back to the matter of trust as the employer’s request may be viewed as lacking trust and confidence in the employee, while the employee’s rejection could be viewed as lacking trust and confidence in their employer. We recommend this type of request be considered a last option for suspicious employers.

Another repeat concern is where an employer considers that the sick leave requested is fake. In this case, further investigation can often give insight into the legitimacy of the sick leave or not.

Termination for medical incapacity

Termination for medical incapacity occurs where the employment relationship has essentially been frustrated due to the employee suffering some form of illness or injury that prevents them from returning to the workplace within a reasonable period of time. The key items to consider in this situation include the terms of the employment agreement, the nature of the employment, the nature of the illness or injury and the prognosis on the employee’s return. As always, communication is key at a time like this, and the involvement of the employee in discussions and investigations will make for a better situation. 

As always, a careful process needs to be conducted in those situations.


Potential sick leave changes

The Holidays Act Taskforce has made a number of recommendations on changes to leave entitlements, payment calculation and interaction of Parental Leave with annual holidays. One of the recommendations is to make sick leave available from day one of employment, removing the six-month continuous employment test. New employees would accrue an additional day per month, from the anniversary date of their employment until their full entitlement for that year had been reached. There are a number of further considerations for this in practice, including what happens for existing employees, and whether there is a cap of 10 days in any one year.

A further recommendation relating to sick leave is that employees should have the ability to take sick leave in units of less than a day on a proportionate basis for time and pay with a minimum amount of a quarter of a day. The basis for this is to remove potential disadvantage to employees who work half a day and then take sick leave for the balance of the day only to find that the part day of sick leave counts as one day of their entitlement.

The expectation is that legislation will be introduced in early 2022 to address the recommendations of the Taskforce.

If this article has raised any questions for you, we’d love to help you answer them.

Michael O’Flaherty

Associate, Wellington

Phone: +64 4 916 7494


Disclaimer: The information contained here is of a general nature and should be used as a guide only. Any reference to law is to New Zealand law and legislation. We recommend before acting on it, you consult your accountant or tax adviser.


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