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Generally speaking, sick leave is beneficially to both employees and employers. Employees are able to rest and recuperate from their illness at home, while employers avoid illnesses and sicknesses being passed around the office to further dampen the business’ productivity. However, sometimes the system does not work quite as it is meant to. When an employee is taking too many sick days, this can be an issue for your business. This article will outline what to do if:

  • your employee is genuinely sick or ill, but out of sick leave; and
  • you suspect that your employee is taking advantage of your company’s sick leave policy.

Overview of Sick Leave

Employees in New Zealand are generally entitled to five sick days per year. 

However, there are some special circumstances depending on the employee’s working conditions. Employees are not usually entitled to sick leave before they have served six months of current continuous employment with the same employer, or worked consistently each week for the same employer for six months.

What To Do If Your Employee Is Out Of Sick Leave

If your employee is genuinely sick but out of sick leave, this can be a difficult situation to navigate. What you should do depends on the nature of the employee’s illness and circumstances and the degree to which your business can be flexible. 

If the employee’s illness is persistent but not too serious and will pass in the near term, your best option may be to allow the employee to take additional sick leave even if they have exhausted their quota. You might also look to enable the employee to work from home if that is possible. You could also introduce some other kind of flexible work arrangement, like reduced hours, until they are no longer unwell.

Alternatively, if the employee’s illness is serious and they may not recover for an indefinite period, it may come to the point where you need to consider whether the employee is simply unable to perform in their role due to their health. Employees can be terminated for medical incapacity in these circumstances.

However, the process for this is extremely thorough and rigorous. This process requires that a full and fair investigation is carried out to determine:

  • the employee’s medical and health status;
  • how long they need away from the workplace and
  • whether the business could sustain holding their position open for them.

If you would like to consider this for your business, you should certainly seek specific advice from an employment lawyer.

If Your Employee Is Taking Advantage of Sick Leave

It can be a serious matter if you suspect your employee is not genuine in taking sick leave. There are a number of steps that you should take in these circumstances to manage the situation. 

1. Policy

You should make sure you have a policy setting out clear expectations and guidelines on employees taking sick leave. This policy should set out some requirements that will make it helpful to manage employees who may misuse the sick leave system in the future.

For instance, for employees looking to take more than three consecutive days of sick leave, you may require them to provide a doctor’s note confirming their illness or diagnosis. 

2. Informal Conversation

Have an informal conversation with the employee to gauge whether there are other reasons why the employee is not attending work. There may be something in the employee’s personal life that is affecting their behaviour if they are not genuinely ill.

3. Formal Disciplinary Process

If you have evidence that the employee is misusing the sick leave process, or if their doctor does not confirm that they are actually sick, you may start a formal process. This may be a disciplinary procedure to ascertain the facts.This must be a fair and proper process with the employee getting an opportunity to take advice and then put their position forward. 

Key Takeaways

Employees are entitled to take a certain amount of sick leave per year. If they are taking more than their entitlement of sick leave, you have some options as an employer. If their illness is genuine and they exhaust their sick leave, you can take several options to support them: advancing them additional sick leave. However, if you believe their illness is not genuine, you could:

  • have an informal discussion with them;
  • require a medical certificate; or 
  • commence a formal disciplinary process if you have sufficient evidence.

If you want to know more about managing an employee who has exhausted their sick leave balance, contact LegalVision’s employment lawyers on 0800 005 570 or complete the form on this page.


Can I dismiss an employee for taking sick leave?

No, if they are using their entitlement to sick leave (either five days or a higher amount specified in the contract). You also cannot dismiss an employee for being “sick” or “ill” as such: you have to undergo a medical incapacity process. However, if an employee is using sick leave improperly, that can be grounds for dismissal.

What is the minimum sick leave employees are entitled to?

Five days per year, an entitlement that begins after six months service with an employer (for most employees).

What should a sick leave policy include?

The policy should out clear expectations and guidelines on how sick leave is taken and treated by staff. This may include, for instance, a requirement for a medical certificate if the employee takes more than three days of sick leave.

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