Posted on: Aug 19, 2014

Question: An employee has had a workplace accident. The employee has sick leave available. I understand they are entitled to be paid for the first week (or part thereof) to compensate them for lost earnings, at 80% of what they would have earned that week. Can an employee choose to receive sick leave rather than 80% of their standard wage when they have a workplace accident?

 Answer: An employee’s entitlement to sick leave is different from the entitlement to compensation for accidents. Sick leave cannot be used in the place of accident compensation but sick leave can legally be used to top up the 80% accident compensation payment. Because employees are entitled to sick leave when injured, there is a potential overlap between the sick leave entitlement under the Holidays Act 2003 (the Act) and the right to weekly compensation under the accident compensation scheme. Section 71 of the Holidays Act addresses this overlap and provides an employer must not require an employee to take sick leave for any period during which the employee is paid weekly accident compensation. The employer is not allowed to deduct the time from the employee’s sick leave entitlement. However, the Act also provides if an employer pays the difference between the employee’s first week compensation or weekly compensation and the employee’s ordinary weekly pay, the employer may agree with the employee that he or she may deduct from the employee’s current sick leave entitlement one day for every five whole days that the employer makes that payment. The employer and employee are both bound to deal with each other in good faith. Accordingly, the employer must consider an employee’s request and give good substantial reasons for declining it if the employer decides to do so.


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