Sick leave - General entitlements
Under the Holidays Act 2003, for most employees there is a minimum provision of five days' paid sick leave after the first six months of continuous employment. An additional five days' paid sick leave is gained from that point on, after each subsequent 12 month period. Employment agreements can provide for more generous sick leave provisions.
Employees who do not meet these eligibility requirements can, however, access sick leave in some circumstances. These are covered later in this fact sheet under "The effect of various work patterns".
Holidays Online Tool in Department of Labour makes it easy to work out what sick and bereavement leave an employee is entitled to. It also calculates public holiday entitlements. Make sure you have payroll information or a pay slip handy when you use the tool.
When can sick leave be taken
Sick leave can be used when an employee is sick or injured, or when the employee's spouse or a dependent person (such as a child or elderly parent) is sick or injured and needs care.
At any time where the employee does not have a sick leave entitlement (including during the first six months of employment), the employer and employee can agree to the employee anticipating the sick leave entitlement. In this case, any sick leave taken can be deducted from the next entitlement that arises.
Accumulation of sick leave
Under the Holidays Act 2003 an employee can carry over unused sick leave. For example, if someone uses only one day's sick leave from the five day entitlement in a 12 month period, he or she may carry over the other four days, so in the next 12 month period the total entitlement is nine days' sick leave. The maximum accumulation under the Act is 20 days' leave, although employment agreements can provide more generous accumulation.
Accumulated sick leave cannot normally be exchanged for cash, nor form part of any final payment to the employee on resignation or termination, unless the employment agreement requires this.
Sick leave entitlements are not pro-rated in any way. For example, even if a part-time employee works three days a week, she or he becomes entitled to five days' sick leave a year after being in employment for six months. Sick leave can also accumulate to up to 20 days for part-time employees.
Payment for sick leave
Payment for sick leave taken should be the amount the employee would ordinarily be paid if they had been at work on the day leave is taken (that is their relevant daily pay). For example, where an employee who normally works' eight hours Tuesday to Friday and four hours Saturday is sick on Saturday, a payment of four hours is due.
The payment can include overtime when overtime would have been worked on the day. For example, if the employment agreement specifies an hour for lunch but the employee at the employer's request usually takes only half an hour for lunch, then the employee's sick leave payment would include the extra half hour normally paid for.
Calculating payment for sick leave - "relevant daily pay"
Relevant daily pay is used to calculate payment for sick leave. It reflects what the employee would have been paid if they had worked on the day in question.
In many cases it will be clear what payment the employee would otherwise have earned on the day C if this is the case, then that amount should be used as relevant daily pay. Any such calculation must include:
productivity or incentives payments, including commission and piece rates, if those payments would have been received had the employee worked
overtime payments
the cash value of board & lodgings provided (but excludes any payment of any employer contribution to a superannuation scheme or the employees benefit).
In cases where this amount is not clear the payment is calculated by dividing the employee's gross earnings for either:
the four weeks before the end of the pay period immediately before the leave, or
where the pay period is longer than four weeks, the pay period before the calculation
by the number of whole or part days the employee either worked or was on paid leave or holiday during that period , but excluding any day the employee didnt work.
Employment agreements may specify a rate of relevant daily pay, but only if that rate is greater than or equal to the rate determined according to (1) or (2) above.
If an employee is sick on a public holiday
Where the employee would have been working on a public holiday but cannot work due to sickness, the payment for the day is as if they had a paid unworked public holiday. Therefore:
the employee would not be entitled to the minimum time and a half payment for working on a public holiday or to an alternative holiday
no sick leave would be deducted.
Informing the employer and proof of illness
Employees are required to inform the employer at the earliest opportunity of the intention to take sick leave C preferably before they are due to start work, but otherwise as early as possible after falling sick.
The employer has the right where the employee is sick or injured for three or more consecutive calendar days to require the employee to provide proof, such as a medical certificate, of the injury or illness.
The three consecutive calendar days are not interrupted by a scheduled break. Therefore, an employee taking a day's sick leave on a Friday, then a two-day scheduled weekend break, can be asked to provide proof of the illness or injury if they take another day's sick leave on the Monday, even if that day is only the second day of sick leave.
The employer can ask for proof of illness within three calendar days if they have reasonable grounds to suspect the sick leave is not genuine, they inform the employee as soon as possible, and they agree to meet the employee's reasonable expenses in getting this proof.
If the employee does not provide proof when requested without reasonable excuse, the employer has the right to withhold the payment for the sick leave period until it is provided.
Where the employee is using sick leave to care for another person, such as a spouse or child, the employer can similarly require proof of sickness for that person as above.
Where the employer believes that the employee has misused a sick leave entitlement, this issue can be dealt with as an employment relationship problem under the Employment Relations Act 2000. The normal processes for raising, progressing and determining problems of employee performance should be followed, and the Mediation Service of the Department of Labour can be asked to help resolve the dispute.
The effect of various work patterns
Most people are entitled to sick leave whether they are full- or part-time, permanent or fixed-term employees, providing that they have completed six months' continuous service.
The Holidays Act 2003 also provides sick leave entitlements after six months to employees whose employment is not continuous if, during those six months, they have worked for the employer for:
an average of at least 10 hours per week, including
at least one hour per week or 40 hours per month.
Employees on a series of fixed-term agreements, or employees sometimes described as "casual", would become entitled to sick leave if they meet this test.
The payment for sick leave would be made where it is a day that the employee would otherwise have worked, and would be made at the employee's relevant rate of pay for the day.
The entitlement to sick leave for these employees is subject to the same test each 12 months. If in any year the work pattern does not meet the above test, then no new entitlement arises. However, they may requalify on the basis of the previous six months service.
Managing changes to employment agreements
The previous Holidays Act 1981 provided a joint sick leave and bereavement leave entitlement called "special leave". Many existing employment agreements use the language of this Act to express employees' conditions for leave.
If your agreement is framed in this way, even if its provisions in some way exceed the minimum established under the Holidays Act 2003, the employer and employee should consider renegotiating the employment agreement to reflect the provisions and language of the Holidays Act 2003.
Failure to make needed changes may create additional leave entitlements that were not intended.
When you are renegotiating, make sure that any reference to each form of leave in the agreement (such as domestic leave, special leave or family leave) maintains the minimum sick leave entitlement of five days a year while also reflecting the special arrangement between the employer and their employees.
If the existing agreement has sick leave, accumulation or other provisions that are more favourable than the Holidays Act 2003, the relationship between the Act and those provisions should be clearly expressed.
Be sure that any negotiated changes are in writing, as "custom and practice" may not be sufficient if there is a dispute.
Bereavement leave - general entitlements
For most employees there is a minimum entitlement to bereavement leave after the first six months of continuous employment.
Employees who do not meet these eligibility requirements can, however, access bereavement leave in some circumstances. These are covered later in this fact sheet under "The effect of various work patterns". Our holidays Online Tool makes it easy to work out what sick and bereavement leave an employee is entitled to. It also calculates public holiday entitlements. Make sure you have payroll information or a payslip handy when you use the tool.
On the death of an immediate family member, the Holidays Act 2003 provides a minimum entitlement of three days' paid bereavement leave. This can be taken at any time and for any purpose genuinely relating to the death. "Immediate family members" are the employee's spouse, parent, child, sibling, grandparent, grandchild or the spouse's parent. Where there is a multiple bereavement, the employee is entitled to three days' bereavement leave in respect of each death.
For example, this would mean that if an employee was to have three "immediate family members" die at the same time, that employee would be entitled to nine days bereavement leave.
Using bereavement leave
Employees do not have to use bereavement leave immediately, nor on consecutive days, nor even use any or all of the entitlement. Following are examples of bereavement leave usage that are allowable under the Holidays Act 2003:
Bob is entitled to three days' paid bereavement leave when his brother Jack is killed in an accident while living overseas. The funeral is in Sydney. Bob uses two days of paid bereavement leave to attend the funeral in Sydney. Six months later, Bob takes the other day of paid leave to attend a local memorial service.
Rangi is entitled to three days' paid bereavement leave when his grandmother dies. He takes two days of bereavement leave immediately to attend her tangi. A year later, he takes the third day of paid leave to attend the unveiling of his grandmother's headstone.
Joyce takes two days' paid bereavement leave when her sister dies after a long illness. Over the next several weeks, she takes two more half days' paid leave to talk to the lawyer about settling the details of her sister's will.
In the event of a death outside the immediate family that causes a person to suffer a bereavement, an employee is entitled to one day of paid leave if the employer accepts that the employee has suffered a bereavement. In considering whether a bereavement has occurred for that employee, the employer should take into consideration:
how close the association was between the employee and the other person
whether the employee is responsible for any aspects of the ceremonies around the death
whether the employee has any cultural responsibilities he or she needs to fulfil in respect of the death.
The Employment Relations Infoline is able to provide information on managing sick leave and bereavement leave. The Infoline can be reached on 0800 20 90 20.
Payment for bereavement leave
Relevant daily pay is used to calculate payment for bereavement leave. It reflects what the employee would have been paid if they had worked on the day in question.
In many cases it will be clear what payment the employee would otherwise have earned on the day C if this is the case, then that amount should be used as relevant daily pay. Any such calculation must include:
productivity or incentives payments, including commission and piece rates, if those payments would have been received had the employee worked
overtime payments
the cash value of board & lodgings provided.
In cases where this amount is not clear the payment is calculated by dividing the employee's gross earnings for either:
the four weeks before the end of the pay period immediately before the leave, or
where the pay period is longer than four weeks, the pay period before the calculation
by the number of whole or part days the employee either worked or was on paid leave or holiday during that period.
Employment agreements may specify a rate of relevant daily pay, but only if that rate is greater than or equal to the rate determined according to (1) or (2) above.
Bereavement on a public holiday
Where an employee would have been working on a public holiday but suffers a bereavement, the payment for the day would be as if they had a paid unworked holiday. Therefore:
the employee would not be entitled to the minimum time and a half payment they would have received had they worked, nor to an alternative holiday
no bereavement leave would be deducted.
The effect of various work patterns
Most people are entitled to bereavement leave whether they are full- or part-time, permanent or fixed-term employees, providing that they have completed six months' continuous employment.
The Holidays Act 2003 also provides bereavement leave entitlements after six months to employees whose employment is not continuous if, during those six months, they have worked for the employer for:
an average of at least 10 hours per week, including
at least one hour per week or 40 hours per month.
Employees on a series of fixed-term agreements or employees sometimes described as "casual'' would become entitled to bereavement leave if they meet this test.
The payment for bereavement leave would be made where it is a day the employee would otherwise have worked, and would be made at the employee's relevant rate of pay for the day.
The entitlement to bereavement leave is subject to the same test each 12 months. If in any year the work pattern does not meet the above test, then no new bereavement leave entitlement arises. However, they may requalify on the basis of the previous six months service.
Managing changes to employment agreements: moving from special leave to sick and bereavement leave
The previous Holidays Act 1981 provided a joint sick leave and bereavement leave entitlement called "special leave". Many employment agreements use the language of this Act to express employees' conditions for leave.
If the agreement is framed in this way, even if its provisions in some ways exceed the new minimum established, the employer and employee should consider renegotiating the employment agreement to reflect the provisions and language of the Holidays Act 2003.
Failure to make needed changes may create leave entitlements that were not intended.
When you are renegotiating, make sure that any reference to each form of leave in your agreement (such as domestic leave, special leave or family leave) maintains the minimum bereavement leave entitlement while also reflecting the special arrangement between you and your employees.
Be sure that any negotiated changes are in writing, as "custom and practice" may not be sufficient if there is a dispute.
Periods of employment before 1 April 2004 go toward qualifying for bereavement leave. For example, if a full-time employee was employed on 1 February 2004 they will qualify for bereavement leave on 1 August 2004.
This page was last updated on: 23-Apr-2009. More details please visit the website of Department of Labour.
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