New Zealand: Constantly sick employees and non-genuine sick leave? When is enough, enough?

Last Updated: 13 February 2017
Article by Jack Brown

Employment

Employees that take excessive amounts of sick leave over and above their statutory entitlement can cause a number of problems in the workplace. Employees are entitled to a certain amount of statutory sick leave, however issues can arise when an employee takes more than they are entitled to.

While an employer does not need to indefinitely support a sick or injured employee, there are good faith considerations an employer must take into account when deciding how to manage such employees. New Zealand's law is complex in this area. An employee's ongoing absence from work may justify dismissal. However, this will require following the proper process and a great amount of consideration and patience from the employer.

Let's consider the two most common situations where an employee calls in sick but has exhausted their sick leave entitlements. First is the situation where the employee is genuinely sick or injured, however the amount and/or frequency of the leave being requested is placing significant stress on the employer's business. Second is the situation where the employee is suspected of taking non-genuine sick leave, or pulling "sickies". In both circumstances, where the employee has no sick leave remaining, the employer may choose to either advance sick leave, provide unpaid sick leave, allow the employee to take leave without pay, or decline leave.

If we look at the first situation, where an employee is genuinely sick or injured, but has exhausted their statutory entitlement to sick leave. It is well settled that an employer is not bound to hold a job open indefinitely for an employee who is unable to perform the role due to sickness or injury, and there will come a point at which employment can be terminated for medical incapacity. Often the employment agreement will contain a clause dealing with medical incapacity, and a well drafted agreement will provide a process for doing so.

A medical incapacity process generally requires the employer to carry out a full and fair investigation into the employee's true medical position, encompassing their present state of health, future prognosis and expected length of time away from the workplace. It is important to note that an investigation into an employee's medical prognosis is not a disciplinary investigation.

General factors present in situations where dismissal for medical incapacity has been justified include where:

  • The employee is clearly and genuinely unwell;
  • The employee has been unable to work for a number of months;
  • The employee's absence from work is significantly affecting the employer and other employees;
  • The employee has failed to engage adequately in the medical investigation process; and
  • There is no certain timeframe for the employee's return to work.

Employers should beware of the legal complexities involved with dismissing an employee based on medical incapacity and should seek advice before doing so.

Turning to the second situation, where the employee is suspected of taking non-genuine sick leave, or pulling a 'sickie'. If the employer has evidence that an employee has taken non-genuine leave then it may, after following a fair and reasonable process, be justified in dismissing that employee for serious misconduct.

A 2013 case in the Employment Court provides an example of an employer successfully dismissing an employee based on serious misconduct for taking non-genuine sick leave. This case highlights the exceptional circumstances that must exist and the adherence to the proper process to justify a dismissal.

In that case an employee (T) applied for five days off to attend a rowing competition. He had used all of his annual leave entitlements and "owed" his employer leave. The employer reluctantly offered T three days leave, however never heard back from him and so assumed T would be at work as normal.

T came into work on the first day that he had applied for leave, however he shortly left claiming he had injured his calf muscle. Later that day he travelled out of town and was seen by a colleague at the rowing competition.

T could not be contacted, and the employer became aware of a Facebook photograph of T at the competition. The employer also possessed a letter from an event representative stating that T would be at the event.

A proper process was followed by the employer, and throughout T was reluctant to engage. The Employment Court found that that T had misled, deceived and refused or failed to co-operate with the employer to the point where the necessary trust and confidence expected between an employer and employee had been lost and subsequently a dismissal was justified.

Employers must keep in mind that it is not their place to determine an appropriate way to recuperate from sickness or injury. It is only when activities are obviously inconsistent with recuperation that an employer may question whether an employee is genuinely ill.

It is also important to note that if the employee can justify their absence with medical certificates it is unlikely that employment institutions will challenge the validity of the leave, or "look behind" the medical certificate.

An employer should also not make an allegation of dishonesty without reliance on a high standard of evidence, proportionate to the seriousness of that allegation. Clear evidence is required and every situation will be considered on its own facts.

If you would like further advice on sick leave or medical incapacity, please feel free to contact a member of the Cavell Leitch employment team. Phone +64 3 379 9941 or email cavell@cavell.co.nz.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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