Sick leave: what can you do to minimise absenteeism?

Employee absenteeism represents a high cost to the New Zealand economy. Research released in 2019 by Southern Cross and Business NZ found employee absence had cost the New Zealand economy $1.79 billion in 2018. The report also quantified the direct cost of absenteeism as between $600 and $1000 per working person a year.

Despite this substantial cost, the report stresses that New Zealand businesses need to break the habit of people working through illnesses. The most recent statistics show that 35 per cent of working Kiwis will still turn up on the job when ill – an attitude Kiwis need to shift away from – this is essential for employee wellness, and, as the pandemic has highlighted, for decreasing health risks to colleagues or customers. One of the most common places that adults spread illnesses is the workplace!

But what if you suspect an employee is misusing sick leave? Most sick leave is genuine, and it shouldn’t be common practice to treat sick leave with suspicion. To do so would be detrimental for any business trying to build a healthy culture of rest and self-care.

If you’ve noticed a pattern of excessive or unusual sick leave, however, or you believe you have evidence of dishonesty, then maybe you’d like to address this. Before you do, it’s crucial that as a business owner or manager, you understand the rights and requirements that surround sick leave. This article will answer your “sick leave” questions, and outline in what circumstances you can or cannot take disciplinary action.

When can an employee request to take sick leave?

Traditionally referred to as ‘sick leave’, under the Holidays Act 2003 employees are entitled to take paid personal sick leave when they are either:

• sick or injured; or
• the employee’s spouse or partner is sick or injured; or
• a person who depends on the employee for care is sick or injured.

What notice and proof is your employee required to provide?

Employees must advise their employer of the period, or expected period, of the leave as early as possible. It’s always a good idea to include your expectations around how much notice is required and when proof may be requested in your employment agreements or leave policies.

Below are the three occasions where you can ask your employee to show proof for the sick leave they have taken:

1. If the sick leave required is for a period of more than three consecutive calendar days (all three days don’t have to be actual working days for the employee). A medical certificate will typically satisfy the requirement for proof.
2. If you have good reason to, you can request proof of sick leave within three consecutive calendar days. In this case, you must let your employee know as soon as possible, and you must cover the cost of any medical fees.
3. If you can clearly see an unusual pattern to sick leave, you can ask reasonable questions, for example; the employee is always sick on a Monday, or always takes sick leave on long weekends or after taking annual leave. Sick leave is random, so logically, it should not fit into any pattern. Therefore, any predictable pattern is an indicator of possible misuse of sick leave.

In no circumstance can you tell an employee which doctor or practice they must go to for their certificate.

Can you take disciplinary action if you suspect your employee has pulled a “sickie”?

As with all employment law, the principle of good faith comes into play when managing an employee who you suspect may be misusing their sick leave. You have a responsibility to be fair and reasonable, and if you do end up taking disciplinary action, you need to be able to show the following:

1. That you followed a fair and valid process for obtaining evidence;
2. That you allowed your employee to provide proof; and
3. That you discussed this issue with them.

Communication with your employee is one of the most important steps here. Their failure to provide proof doesn’t necessarily indicate dishonesty. There is a range of factors you should consider before going down the path of disciplinary action. And, it’s also vital for employers to be aware of the many sensitivities that surround sick leave. Your employee may be dealing with an issue that is difficult for them to explain, such as domestic violence or mental health issues.

Starting these discussions out in a caring and compassionate way is by far preferred. You should only move to formal processes when you’re one hundred per cent sure that your employee is abusing their right to sick leave. And, when you have confirmed that they don’t have a valid explanation to support their sick leave usage. The way you handle these situations is likely to be known widely in the workplace, so, it’s worth considering how your actions may influence the way your employees see you as their employer.

In short, you may take disciplinary action if you have sufficient evidence, such as:

• If the employee has failed to provide notice or proof of being unfit for work.
• If you have proof of seeing your worker somewhere like the beach or a festival when they told you, they were in bed with a stomach bug.

However, again I would urge any employer who chooses to proceed down the disciplinary path to step cautiously.

How many days of sick leave are employees entitled to?

Currently, full-time and part-time employees are eligible for five days of sick leave each year after six months of employment. But the Labour Government has recently introduced the Holidays (Increasing Sick Leave) Amendment Bill which will increase sick leave entitlements from five to ten days a year once it’s passed as Law.

The Government believes that expanding sick leave from five to 10 days would reduce the number of workers who typically show up to work even if they’re unwell (currently that’s 35 per cent of working Kiwis!). COVID-19 has shone a light on this issue at a time when the safety of communities has relied on people’s compliance with stay home orders.

Unused sick leave by the end of 12 months can also be carried over and added to the next year’s entitlement, with a maximum sick leave accrual of 20 days.

What does all of this mean for you as an employer?

Absenteeism is costly, both in terms of lost wages and reduced productivity. While it’s inevitable that an employee will be sick from time to time, high rates of absenteeism may indicate underlying issues which you may need to address. However, it’s important to remember that there are many genuine reasons for your employees to feel unable to come to work. Any attempt to address absenteeism due to a suspected “sickie” must be fair and reasonable and approached with care.

If this article has raised any questions or concerns or you’d like to learn more about how we can help your business, please reach out to our workplace relations experts via our 24/7 HR Advice Line.