Top Tips for Managing Personal Leave and Reducing Absenteeism Many businesses say the cost of personal leave (sick leave) is one of the biggest costs they incur in running a business.  Personal leave abuse and misuse is very common, and it costs the Australian economy around $32.5 billion a year. If misuse and abuse of personal leave is costing your business too much, you can take action as an employer to minimise the loss. Business 360’s top tips for reigning in these costs include:
  1. Track employee absences routinely.
Most payroll systems can produce a report where you can view absences on personal leave to look for patterns and misuse such as personal leave being taken before and after every public holiday. Designate your supervisors and managers to be accountable for this task and add this to your standard business reporting protocol.
  1. Request Information and Evidence
The Fair Work Act  sets out evidence requirements for personal leave. It provides that an employer may require evidence that would satisfy a reasonable person that an employee is unfit to carry out their duties. This could include a medical certificate that clearly states the duration of the inability to attend for work.
  1. Prevent Abuse and Misuse of Personal Leave
It is important for businesses to have a personal leave policy in place as to how personal leave is to be notified and the evidence that is required. This should be backed up by the monitoring and reporting system (See Tip No. 1). Strategies to reduce the likelihood of employees abusing and misusing personal leave entitlements include:
  • Requiring an employee to phone and speak to their manager when they are sick. A phone call, as opposed to a text message or email, can lessen the chances of an employee abusing personal leave entitlements when they know they must speak directly to their manager.
  • Determining rules around producing medical certificates. Will it be for every absence or for periods of two days or longer? Will your business require an employee to produce a medical certificate if an employee is sick before or after a weekend or a public holiday? Make sure your employees are fully informed of the business rules.
  • Not presenting personal leave balances on a payslip. This can encourage employees to use their accrued personal leave balance when they are not sick. Remember personal leave unlike annual leave is only an entitlement when it is genuinely needed.
  4. Conduct Return to Work Interviews A return to work interview can assist you to better understand the reason for the employee’s absence and to uncover issues such as an injury or workplace bullying which may have work health and safety consequences. Return to work interviews show employee’s those absences on personal leave are noticed and the business is interested in its employees’ health and wellbeing. In addition to potential work health and safety issues a “heads up” on other workplace matters may come to light. For example, is the employee experiencing a lack of motivation? Are they overwhelmed by their workload? Is there workplace conflict deterring the employee from attending work? Is there something happening in their personal life that requires some flexibility? Addressing any underlying issues not only helps to reduce absenteeism, but it also helps a business to uphold its duty of care obligations and enhance employee engagement.
  1. Challenge an employee if you suspect they are not being honest.
In Anderson v Crown Melbourne Ltd [2008] FMCA 152, an employee was dismissed for misuse of sick leave. The employee had informed his employer that he would take a day’s sick leave to attend a football match in Perth. His employer strongly requested him not to do so, but the employee ignored the warning and subsequently produced a medical certificate for the relevant date. The employee claimed to be emotionally unfit to attend. Despite the certificate, the employer maintained that a reasonable person would not have been satisfied that the employee was unfit to attend work. The Fair Work Commission agreed stating he was in excellent health and the dismissal was not unlawful. However, caution should be taken to handle situations in which it is suspected an employee is not genuinely sick prior to taking any action against the employee. Unlawful termination or discrimination claims could eventuate. In such cases, expert guidance is highly recommended. If you need help to establish personal leave and absenteeism policies and protocols for your business, or you need help to manage an employee who you suspect is not genuine in accessing their personal leave entitlement, reach out to us at Business 360 for a confidential discussion. Call us now on 1300 287 360, click/scan below to book an appointment or email