What Happens When an Employee Gets Sick While on Annual Leave?
An employee is enjoying a well-earned holiday when they become sick. Can they change their annual leave to sick leave? The answer is yes, in many circumstances.
Under the National Employment Standards (NES), if an employee becomes sick or injured while taking annual leave, they can use their paid personal/carer’s leave entitlement instead of annual leave for the period they are unwell. The annual leave balance is then recredited. This can be an important distinction for both employers and employees.
An employee doesn’t lose their annual leave because they become sick
For example, imagine an employee takes two weeks’ annual leave to go on holiday. After three days, they develop a significant illness and are unable to enjoy their holiday or would have been unable to attend work if they had been working. The employee can notify their employer that they are taking personal leave because of their illness. If the employee has sufficient paid sick leave available, those days can be recorded as personal leave rather than annual leave. The employee’s annual leave balance is then restored for those days.
The Fair Work Ombudsman confirms that an employee can use paid sick leave instead of annual leave when they are sick or injured during annual leave.
What if the employee is sick for only part of their holiday?
The employee does not necessarily have to convert the entire period of annual leave into sick leave.
For example:
Monday to Friday: Annual leave
Wednesday and Thursday: Employee becomes genuinely unfit for work
Friday: Recovers and continues holiday
The Wednesday and Thursday may be treated as personal leave, with the remaining days continuing to be annual leave.
The principle is that annual leave is not deducted for the period during which another recognised leave entitlement applies.
The employee must notify the employer
An employee who becomes sick while on annual leave still needs to follow the normal notification requirements for personal leave. They must notify their employer that they are taking sick leave and, if requested, provide evidence that would satisfy a reasonable person that they were genuinely entitled to take the leave. The notification may occur after the illness has started if that is reasonably necessary. For example, an employee who becomes seriously ill while travelling overseas may not be able to immediately contact their employer.
Can an employer ask for a medical certificate?
Yes. An employer can ask an employee to provide evidence supporting their personal leave. This can include a medical certificate. The evidence must be sufficient to satisfy a reasonable person that the employee was genuinely entitled to take sick leave. Awards, enterprise agreements and workplace policies may also contain specific requirements concerning evidence. Employers should therefore avoid assuming that an employee who says they became sick while on holiday is automatically entitled to have the annual leave converted to sick leave. The employee still needs to meet the normal notice and evidence requirements.
What if the employee has no sick leave left?
This is where things can become more complicated. If the employee has no paid personal leave available, they may not be entitled to paid sick leave for the period of illness. The employee may instead:
- continue taking annual leave;
- take unpaid leave, if agreed; or
- use another applicable leave entitlement where appropriate.
The Fair Work Ombudsman gives the example of an employee who has only three days of paid sick leave available during a five-day illness. The first three days can be treated as paid sick leave, while the remaining days can remain annual leave or potentially be taken as unpaid leave by agreement.
What about carer’s leave?
The same principle can apply where an employee needs to care for or support an immediate family or household member who becomes sick, injured or experiences an unexpected emergency. Paid personal/carer’s leave can be used instead of annual leave where the employee meets the relevant requirements.
What should employers do?
Employers should have a clear and consistent process for dealing with requests to change annual leave to personal leave. When an employee advises that they became sick during annual leave, employers should:
1. Record the notification
Record when the employee notified the business and the period of illness.
2. Check the employee’s leave balance
Confirm whether the employee has sufficient personal/carer’s leave available.
3. Request evidence where appropriate
If the employer’s normal procedures require evidence, request a medical certificate or other appropriate evidence.
4. Adjust the payroll records
If the requirements are satisfied, change the relevant days from annual leave to personal leave and restore the annual leave balance.
5. Keep the process consistent
Employees should not be treated differently depending on whether they become sick at home, interstate or overseas. A holiday doesn’t mean an employee has to use annual leave when genuinely unfit for work. The important message for employers is that annual leave and personal leave are separate entitlements.
Annual leave is intended to provide employees with a period of rest and recreation. Personal leave is designed to provide leave when an employee is unable to work because of illness or injury. If an employee becomes genuinely unfit for work during annual leave, the NES allows them to use their available personal leave entitlement instead of their annual leave, provided they meet the applicable notice and evidence requirements.
For employers, the key is to have a clear policy, apply the rules consistently and ensure payroll records accurately reflect the type of leave actually taken.
Practical tip: If your business receives a request to convert annual leave to sick leave, don’t automatically reject it simply because the employee was already on holiday. Check the employee’s notice, evidence and leave entitlement before making a decision.