Can an Employer Refuse Sick Leave in NZ? The Rules for Both Sides

It is 6.40 on a wet Tuesday morning, you have woken up with the flu, and your boss texts back: “We are short staffed, I need you in.” Can they actually do that?

The short answer is: sometimes yes, but often no. Sick leave in New Zealand is a legal entitlement under the Holidays Act 2003, not a favour handed out when the roster allows. If you have sick leave available and you, your partner, or someone who depends on you for care is sick or injured, your employer generally cannot refuse the leave. But there are situations where an employer is within their rights to say no, or to withhold the pay, and this guide works through both sides.

One timing note: the Holidays Act is due to be replaced by an Employment Leave Act in August 2028. Until then, these are the rules.

Quick answer

• Employees are entitled to 10 days of paid sick leave a year once they have worked for the same employer for six months and meet the hours tests in the Holidays Act 2003.
• An employer cannot refuse sick leave where the entitlement exists and the employee, their spouse or partner, or a dependant is genuinely sick or injured.
• An employer can say no where the employee has not yet qualified, has used up their entitlement, or is not actually sick or caring for someone who is.
• Employers can require proof, usually a medical certificate. Who pays depends on timing: within the first three days the employer pays, at three days or more the employee pays.
• Sick leave is paid at relevant daily pay, or average daily pay where relevant daily pay cannot be worked out or changes within the pay period.
• If leave is refused wrongly, the employee can raise it directly, use Employment New Zealand’s free early resolution and mediation services, and in some cases raise a personal grievance.

The entitlement basics: who gets sick leave, and when

Sick leave comes from Part 2 of the Holidays Act 2003. Section 63 sets out when the entitlement kicks in, and section 65 sets out what it can be used for.

An employee qualifies once either of two things is true. They have completed six months of current continuous employment with the employer, or, over a six-month period, they have worked an average of at least 10 hours a week, with no less than one hour in every week or no less than 40 hours in every month. From that point they get 10 days for the following 12 months, and 10 more for each subsequent 12 months while the qualifying circumstances continue.

The entitlement covers three situations: the employee is sick or injured; the employee’s spouse or partner is sick or injured; or a person who depends on the employee for care is sick or injured. That third category is broad: children are the obvious example, but it can include an elderly parent or anyone who genuinely relies on the employee.

A few structural points catch people out:

• It applies to everyone who meets the tests. Full-time, part-time and casual employees are all covered on the same terms; there is no smaller entitlement for part-timers.
• It is counted in days, not hours. The Act does not split sick leave into part days. If someone works part of a day and then goes home sick, the employer can count a full day as used, unless the employment agreement or workplace policy records leave in hours or part days instead.
• It carries over, up to a cap. Unused sick leave rolls into the next 12-month period, but under section 66 an employee can carry over a maximum of 10 days, giving a maximum current entitlement of 20 days in any year. An employer can agree to a higher cap, and some do.
• It is a floor, not a ceiling. An agreement cannot offer less than the Act, but can offer more, such as extra days or leave from day one.
• It is never paid out. Under section 67, unused sick leave is not paid when employment ends, and it cannot be cashed up.

Employees also have a duty here. Section 64 requires an employee taking sick leave to notify the employer as early as possible before they are due to start work that day, or, if that is not practicable, as early as possible afterwards. A text at lunchtime about a shift that started at eight is a genuine problem, and a common source of friction.

When an employer can say no

Refusals are lawful in narrower circumstances than many employers assume, but they do exist.

The employee has not qualified yet. In the first six months, before either section 63 test is met, there is no statutory entitlement to refuse. The employee can still ask for leave in advance, annual holidays, or unpaid leave by agreement. Section 63(3) confirms leave in advance is available on that basis, with the days deducted from the entitlement when it arises.

The entitlement has run out. Once the balance is gone, paid sick leave under the Act is gone with it. What happens next is a matter of agreement, or of whatever extra the employment agreement provides.

The employee is not sick, and nobody who depends on them is either. Sick leave exists for sickness and injury, the employee’s own or that of a spouse, partner or dependant. It is not a general purpose day off. Routine appointments mark the boundary: Employment New Zealand explains that an employer is not legally required to give time off for a routine check-up or repeat prescription visit unless the employment agreement says otherwise, although sick leave can be used for an appointment involving diagnosis or treatment of an illness, injury or condition.

Proof has been required and not produced. This is a pay point rather than a leave point, and Employment New Zealand states it plainly: if an employer has asked for proof, and the employee does not provide it and has no reasonable excuse, the employer does not have to pay for that sick leave until the proof is provided. If the proof turns up later, the pay must follow.

The day was not a working day anyway. Sick leave is only paid for days the employee would otherwise have worked. Someone who falls sick on a day they were never rostered does not use a sick day and is not paid one.

When an employer cannot refuse

Where the statutory boxes are ticked, the employer’s discretion largely disappears. If the employee has entitlement available, is genuinely sick or injured (or their spouse, partner or dependant is), and has notified the employer as early as practicable, the leave must be granted and paid. Being busy, short staffed, or generally suspicious does not displace the entitlement: the Act frames sick leave as something the employee takes when the circumstances arise, leaving the employer to record it, pay it correctly, and use the proof rules where there are genuine grounds.

Employers also cannot:

• Give less than the statutory minimum, or contract out of it in an employment agreement.
• Dictate which doctor or health practitioner the employee sees. Section 68(4) is explicit that the proof provisions confer no such right.
• Refuse sick leave that replaces annual holidays in one specific situation: where an employee falls sick before their scheduled annual holidays begin, Employment New Zealand states the employer must let them take the period as sick leave. If sickness starts partway through the holidays, conversion requires the employer’s agreement.
• Force an employee receiving ACC weekly compensation to take that time as sick leave or annual holidays. Section 71(3) prohibits it.

Proof of illness and medical certificates

The proof rules sit in section 68, and they turn entirely on how long the sickness or injury lasts, because that decides who pays for the doctor’s visit.

Three or more consecutive days. If the sickness or injury lasts three or more consecutive calendar days, the employer may require proof. Calendar days means exactly that: weekends and rostered days off count. An employee sick on Friday and still sick on Monday has been sick for four consecutive days, though only two were working days. Where proof is required on this basis, Employment New Zealand’s position is that the employee meets the cost.

Less than three days. An employer can still ask for proof within the first three days, sometimes because a pattern concerns them. But two conditions attach: they must tell the employee as early as possible that proof is required, and they must meet the employee’s reasonable expenses of obtaining it. Ask late, or refuse to pay, and this route is not available.

What counts as proof. Section 68 describes proof as including a certificate from a health practitioner confirming that the employee is not fit to attend work because of sickness or injury, or that the employee cannot attend work because their spouse or partner, or a person who depends on them for care, is sick or injured. Note what that does and does not say: the certificate confirms unfitness for work, and the Act does not require it to name a diagnosis.

How sick leave is paid

Section 71 requires the employer to pay an amount equivalent to the employee’s relevant daily pay, or average daily pay, for each day of sick leave that would otherwise have been a working day, in the pay cycle relating to the period the leave was taken.

Relevant daily pay, defined in section 9, is what the employee would have received if they had worked that day. It includes productivity or incentive payments such as commission, and overtime, where the employee would otherwise have received them. For most people on stable hours, it is simply a normal day’s pay.

Average daily pay, under section 9A, is the fallback. An employer may use it where it is not possible or practicable to determine relevant daily pay, or where the employee’s daily pay varies within the pay period the leave falls in. It is calculated from the employee’s gross earnings over the previous 52 weeks, divided by the number of whole or part days the employee earned them across, including days of paid leave.

Sick leave to care for a partner or dependants

The dependant provisions are not a lesser form of leave. The same 10 days, proof rules and pay rules apply whether the sick person is the employee or someone the employee cares for. Section 65(1) puts the three situations side by side without ranking them.

The practical questions tend to be about proof and boundaries. An employer can ask for proof that the dependant is sick or injured, on the same terms and cost rules as for the employee’s own illness. And the category has limits: the person must actually depend on the employee for care. A flatmate with a cold is not a dependant; a child home from school with gastroenteritis plainly is. Where the need is not illness at all, for example a healthy child whose usual childcare has fallen through, sick leave is not the mechanism, and the conversation becomes one about annual holidays or unpaid leave by agreement.

Part-time and casual employees

Because the entitlement is expressed in days rather than hours, part-time and casual staff often assume they get a fraction of it. They do not: an employee who meets the section 63 tests gets 10 days, whether they work five days a week or two. The difference shows up in payment, not entitlement, since each sick day is paid at relevant daily pay for that day, so a four-hour Saturday shift is paid as four hours.

Casual employees need to meet the second qualifying route in section 63(1)(b): an average of 10 hours a week, with at least an hour a week or 40 hours a month, across six months. Genuinely intermittent work may not reach it, in which case there is no entitlement yet. Where a casual employee is entitled, Employment New Zealand’s guidance is that sick leave is payable if the employee was rostered to work on the day, or could have expected to be rostered. And an employee who misses the criteria in a given year gets no new entitlement that year, but keeps any balance carried over from the year before.

What happens when the entitlement runs out

Running out of sick leave is common in a bad year, and the Act’s options are all built on agreement. Employment New Zealand lists the usual possibilities: sick leave in advance, annual holidays, unpaid leave, or paid special leave where the agreement or workplace policies provide for it. The employer does not have to agree unless the agreement says they do. Sick leave in advance is deducted from the next entitlement when it arises, so the employee starts the following year in deficit, and annual holidays used during illness are gone for rest later. For people facing a long recovery, this gap between a 10 or 20 day entitlement and a months-long absence is exactly where income protection insurance tends to enter the picture, since it is designed to replace income over a longer period than sick leave can cover.

Employers should not treat the absence itself as misconduct: being sick is not a disciplinary matter, and longer-term incapacity is a separate process, covered next.

Longer illness, incapacity and dismissal

Sick leave entitlement and job security are related but different questions. An employee who has used all 10 or 20 days is not automatically at risk of losing their job, and an employer who has run out of patience is not automatically entitled to end the employment.

Employment New Zealand’s guidance to employers faced with a long absence focuses on information: the employer needs to know how long the employee is likely to be off work, and whether they will be able to do their job again. That means seeking medical information with the employee’s involvement, keeping in contact, considering modified duties or a gradual return, and following whatever the employment agreement says about medical incapacity. Dismissal for genuine, prolonged incapacity can be justified in the right circumstances, but employers who skip the enquiry routinely find the dismissal judged unjustified, because the Employment Relations Authority applies the test of what a fair and reasonable employer could have done in the circumstances.

For employees, the mirror image applies: dismissal while sick, or unfair handling of your illness, is personal grievance territory, with the 90-day clock running from the dismissal.

If your employer refuses wrongly: the steps

Most sick leave disputes are misunderstandings about entitlement dates or proof costs, fixable in one conversation. Where they are not, the sensible sequence is:

1. Raise it directly, and in writing. Point to the entitlement, your start date, and your balance. Many errors are payroll settings, not malice.
2. Get advice. Employment New Zealand answers queries on 0800 20 90 20.
3. Use early resolution or mediation. Employment New Zealand offers a free, phone-based Early Resolution service for new issues, and a free mediation service where an independent mediator helps both sides agree. Mediation is voluntary and confidential, and settlements reached there can be made binding.
4. Consider a personal grievance. Refusing an entitlement can amount to an unjustified disadvantage in employment, and dismissal connected to sickness can be an unjustified dismissal. A personal grievance must be raised with the employer within 90 days of the action, or of becoming aware of it, so this clock matters. If it is not resolved, the claim can go to the Employment Relations Authority, which investigates and decides on the merits.
5. Minimum entitlement breaches can also be enforced. The Labour Inspectorate investigates and enforces breaches of the Holidays Act, so a refusal to provide the statutory minimum is something an inspector can pursue too.

For employers: managing patterns of absence lawfully

Plenty of employers reading this will have the opposite problem: a pattern of Mondays and Fridays that nobody quite believes. The law does not leave you powerless, but it insists on a process.

Start with records, which the Act requires employers to keep anyway, then have the conversation early and in good faith. Patterns have innocent explanations, such as a chronic condition or a child’s recurring illness, as often as guilty ones; you will not know which until you ask.

Use the tools the Act gives you. You may require proof for absences of three or more consecutive days at the employee’s cost, and for shorter absences at your own cost provided you ask as early as possible. If proof is not provided without a reasonable excuse, payment can be withheld until it is.

If you still believe leave is being taken dishonestly, treat that as what it is: a potential misconduct issue, separate from the sickness itself. That means a proper investigation before any conclusion, putting the concern to the employee, hearing their response, and only then deciding. Acting on suspicion alone is how defensible concerns become successful personal grievances, and acting in good faith throughout is a legal duty under the Employment Relations Act 2000 in any event.

FAQs

Can my employer refuse sick leave because we are short staffed?

No, not where you have entitlement and you or your dependant is genuinely sick or injured. Staffing pressure is a real operational problem, but it does not override the entitlement. The employer can ask for proof within the rules described above.

Can my employer ask for a medical certificate for a single day off?

Yes, but only if they tell you as early as possible that proof is required, and they must meet your reasonable expenses of getting it. Once an absence reaches three or more consecutive calendar days, they can require proof at your cost instead.

Who pays for the medical certificate?

Timing decides. Proof required within the first three days is at the employer’s cost. Where the sickness or injury lasts three or more consecutive calendar days and proof is required on that basis, the employee pays.

Do casual employees get sick leave?

Yes, on the same terms as everyone else, provided they meet the qualifying tests in section 63: six months of continuous employment, or six months working an average of 10 hours a week with at least an hour a week or 40 hours a month. The entitlement is the same 10 days as a full-time employee’s.

Can I be dismissed for taking too much sick leave?

Not simply for using your entitlement: genuine illness is not misconduct. Where illness becomes long-term incapacity, an employer must first gather proper medical information, consult you, and consider alternatives such as modified duties before any dismissal can be justified. A dismissal that skips those steps can be challenged as unjustified, within 90 days.

I am still sick but my sick leave has run out. What can I do?

Ask about sick leave in advance, annual holidays, unpaid leave, or any special leave your agreement provides. Your employer does not have to agree unless the agreement requires it, so make the request early and in writing.

Can my employer make me take annual holidays instead of sick leave?

If you fall sick before your annual holidays start, the employer must let you take that period as sick leave. If your sick leave is exhausted, section 39 allows annual holidays instead, but only by agreement. Nor can an employer make you take sick leave or annual holidays for time you are being paid ACC weekly compensation.

For more guides on employing staff and running a business in New Zealand, see the Business and Industry hub.

Sources

• Employment New Zealand, Taking sick leave: https://www.employment.govt.nz/leave-and-holidays/sick-leave/taking-sick-leave
• Employment New Zealand, Managing sick leave: https://www.employment.govt.nz/leave-and-holidays/sick-leave/managing-sick-leave
• Employment New Zealand, Personal grievances: https://www.employment.govt.nz/resolving-problems/how-to-resolve-problems/personal-grievances
• Employment New Zealand, Addressing Holidays Act non-compliance: https://www.employment.govt.nz/resolving-problems/addressing-holidays-act-non-compliance
• Holidays Act 2003, sections 3, 9, 9A, 39, 63 to 68 and 71 to 72, published by the Parliamentary Counsel Office on New Zealand Legislation (legislation.govt.nz)

Disclaimer

This article is general information about New Zealand employment law as at the date of writing. It is not legal advice, and it cannot take the place of advice about your own situation. Sick leave disputes often turn on the wording of the employment agreement and the facts of the particular case. If you are an employee or an employer dealing with a live dispute, check the Employment New Zealand website, call its contact centre, or talk to an employment lawyer or advocate before acting.