Understanding Personal/Carer’s Leave in Australia
By Paolo, 08.08.2023
Personal/Carers Leave, or Personal Leave, is a paid entitlement available to employees to help them deal with issues like personal illness, injury, caring responsibilities and family emergencies.
Together with Annual Leave, Personal/Carer’s Leave is a core employee entitlement and part of the Fair Work 11 National Employment Standards. This means that as a core entitlement, it cannot be removed or reduced from the employee’s basic working rights through any Employment Agreement.
This blog article answers the most common questions about Personal/Carer’s Leave in Australia.
Please note the rights and requirements outlined in this blog relate to the Personal/Carer’s Leave entitlements stipulated by Fair Work and any other applicable Federal or state law. Additional Leave offered by certain employers on top of the entitlements set out by the National Employment Standards may have different treatments explicitly outlined in the Employment Agreement.
Personal/Carer’s Leave versus Sick Leave
Personal/Carer’s Leave entitlements were introduced with the Fair Work Act in 2009 and superseded the old Sick Leave entitlements.
Although the two names are still being used interchangeably, significant differences exist between the previous Sick Leave and the current Personal/Carer’s Leave entitlements.
Sick Leave was a State and Territory entitlement. The number of sick leave days available to take by an employee varied from state to state. Sick Leave was restricted to personal illness or injury, meaning an employee could only access this entitlement if he/she was ill or injured.
Personal/Carer’s Leave entitlements were introduced as part of the Fair Work Act, which changed this entitlement from Statewide to Federal. Personal/Carer’s Leave also expanded the coverage of the entitlement, including:
- Personal Leave: this is the same as the old Sick Leave. An employee is entitled to receive up to 10 days of Personal Leave each year, which can be taken at any time he/she is unfit to work due to illness or injury (sustained outside the workplace);
- Carer’s Leave: the new Federal Legislation extends the right to take the same 10 days accrued to care for an immediate family member or a member of the employee’s household.
It is important to understand that an employee is entitled to a total of 10 paid days per year which they can use for either personal illness or to care for someone else; and
- Compassionate Leave (formerly called Bereavement Leave): is the provision of 2 additional paid days and 2 unpaid days given to an employee upon the passing of a family member or a member of the employee’s household.
The additional Compassionate Leave days must be given every time an employee’s family member (or household member) passes, even if these instances happen multiple times during the same year.
Definition of Immediate Family Member
An immediate family member includes the employee’s spouse, de facto partner, child (including stepchildren), parent, grandparent, grandchild, sibling, as well as child, parent, grandparent, grandchild or sibling of the employee’s spouse or de facto partner.
A former spouse and de facto partner are also considered immediate family members.
Definition of Household Member
A household member is any person who lives with the employee, even if they are not relatives.
Who is entitled to Personal/Carer’s Leave?
Full-time and Part-Time employees are eligible to receive Personal/Carer’s Leave entitlements.
Casual employees are not entitled to access Personal/Carer’s Leave entitlements. However, they are entitled to receive Compassionate Leave provided the employee was rostered to work in the same period of the family member’s passing.
How much Personal/Carer’s Leave is an employee entitled to?
The Fair Work National Employment Standards set out this entitlement to be 10 days accrued over 12 months.
Some Awards or other Employment arrangements may grant more time. However, no Employment Agreement can reduce the 10 days entitlement stipulated by the National Employment Standards.
How is Personal/Carer’s Leave accrued?
Employers must accrue Personal/Carer’s Leave entitlements for any eligible employees from their first day of employment (including any probationary period).
Full-Time and Part-Time employees are entitled to 10 days (pro-rata) of Personal/Carer’s Leave over 12 months. The Personal/Carer’s Leave accruals never expire, and any untaken balance must roll over the next year of employment.
Personal/Carer’s Leave is calculated as a percentage of the Ordinary Hours worked over a pay period.
This means an employee accrues Personal/Carer’s Leave whilst taking any type of paid leave and some types of Unpaid Leave, including Community Service Leave, Ancilliary Leave and Jury Duty.
In some States or Territories, Personal/Carer’s Leave is also accrued whilst absent on Workers’ Compensation.
However, employees do not accrue Personal/Carer’s Leave whilst working Overtime or on the unused leave balances paid out at termination of employment. It is also important to note that Government Paid Parental Leave is considered Unpaid Leave and excluded from any Personal/Carer’s Leave accruals.
How is Personal/Carer’s Leave calculated?
Most Accounting and Payroll software applications automatically calculate the Leave accruals. The easiest way to manually calculate 10 days of Personal/Carer’s Leave accruals is by multiplying the Ordinary Hours worked by 3.84615%. Alternatively, it is also possible to use the Fairwork PACT (Pay and Conditions Tool) available on the Fair Work website.
Accruals misconception days versus hours
The interpretation of the 10 days of Personal/Carer’s Leave accruals per annum stipulated in the Fair Work Act has been challenged in the past. In August 2019, in the case: Mondelez Australia Pty Ltd v AMWU & Ors  HCA 29, the Federal Court of Australia ruled in favour of the employee’s claim, which interpreted the method of accruing Personal/carer’s leave under the National Employment Standards as full days, instead of a percentage of the Ordinary Hours worked.
The outcome of the court hearing temporarily changed the way Personal/Carer’s Leave accruals were meant to be calculated and granted 10 full days of Personal/Carer’s Leave. For example, under this reformed accrual method, a Full-Time employee working 10-hour shifts 4 days per week was still entitled to take 10 days made of 10-hour shifts of Personal/Carer’s Leave instead of 80 hours per year (equivalent to 8 days of 10-hour shifts).
However, on 13 August 2020, the High Court of Australia overturned the ruling of the Federal Court from 2019 stating that the entitlement to 10 days of Personal/Carer’s leave under the National Employment Standards must be calculated as a percentage of the Ordinary Hours worked, not working days.
Accruing Compassionate Leave
Compassionate Leave is not an accrued entitlement. The 2 days of paid leave (plus additional 2 days of unpaid leave) are automatically granted when an employee’s immediate family member or household member passes away.
Is an Employer required to show Personal/Carer’s Leave on the Payslip?
Fair Work does not require Employers to show Personal/Carer’s Leave balances on Payslips. However, employers must keep current and accurate records of Leave accruals and are required to inform their employees of their Leave balances upon request.
Although there is no obligation to display Personal/Carer’s Leave balances, employers must show any periods of Personal/Carer’s Leave taken on the employee’s payslip.
How can Personal/Carer’s Leave be taken?
Personal/Carer’s Leave can be taken for a few hours, a full day or week, or even a longer period.
Employees must inform their employer that they are taking time off on Personal/Carer’s Leave as soon as possible. They should also provide their employer with an estimated time they are expected to take off work.
Compassionate Leave paid days can be either taken consecutively or at separate times. The additional 2 unpaid days can be taken at the employee’s discretion. If the employee wants to take additional paid time, this can be taken as Personal/Carer’s Leave.
How does Cashing Out Personal/Carer’s Leave work?
The Fair Work Act does not include the provision to cash out Personal/Carer’s Leave. However, a modern Award or enterprise Agreement may include terms that allow the employee to request Personal/Carer’s Leave to be cashed out.
Such a request can only be approved if it meets all of the following conditions:
- A Cashing Out Leave written agreement must be made each time Personal/Carer’s Leave is cashed out;
- The employee needs to have at least 15 days of Personal/Carer’s leave left after the Cash-out;
- The payment for the Cashed out leave must be the same as what the employee would be paid if they took leave;
- Parents’ approval must be obtained for employees under 18 years old;
- Employees can only cash out a maximum of 2 weeks every 12 months.
What happens when an employee exceeds their Personal/Carer’s Leave Balances?
An employer should not deny an employee from taking time off when he/she claims to be unfit to work. Putting the employee under duress to show up at work when claiming to be ill could cause serious issues in case incidents in the workplace should happen.
However, an employer does not have to pay more Personal/Carer’s Leave than the amount currently sitting on the employee’s leave balances. The employer can offer the employee the option to either use some of the Annual Leave entitlements or take unpaid leave.
Allowing employees to enter negative Personal/Carer’s Leave balances is at the discretion (and risk) of the employer.
An employee can take as much Personal Leave as they need to get better from an illness or injury. Although employers are not required to pay more leave than the available balance, they are not allowed to dismiss the employee if this can provide evidence of their illness or injury unless the period of sick leave exceeds 3 consecutive months over a 12-month period.
Accepting, Rejecting and Directing Personal/Carer’s Leave Applications
The provision of requesting and accepting Personal/Carer’s Leave applications is often subject to interpretation and grey areas.
In general, taking Personal/Carer’s Leave is incidental. An employee cannot plan to take Personal (sick) Leave; he/she can only take Personal Leave when falling ill or when sustaining an injury. Personal Leave does not extend to scheduled medical appointments or procedures. When an employee is required to attend a medical appointment or procedure, he/she should apply for Annual Leave instead.
However, this is still left at the discretion of the employer. An employer may agree to accept Personal Leave applications for scheduled medical procedures on a case-by-case basis.
Carer’s Leave is more subjective. Although employees should only take time off upon one of their family members falling ill, they could also inform their employer in advance that one of their family members is scheduled for a medical procedure and may require their assistance during the recovery period.
Finally, although Compassionate Leave is only granted upon an employee’s passing (or being very close to passing), the time off could be scheduled at a later date and used to take care of family affairs, including funerals, reading of wills etc.
Directing to take Personal/Carer’s Leave
An employer cannot direct an employee to take Personal/Carer’s Leave to reduce the employee’s leave balances or during a shut-down period. The concept of excessive leave balances does not apply to Personal/Carer’s leave entitlements.
However, an employer can direct an employee to first seek a medical examination and then take the time off if the employee is deemed unfit to work.
Requesting Evidence of Personal/Carer’s Leave
An employer has the right to request the employee to provide evidence to substantiate the reason why the Personal/Carer’s leave was taken. The request for evidence can be done on an ad-hoc basis or be part of a company policy.
It is important to understand that evidence can be requested to establish the employee’s unfitness to work or the employee’s fitness to return to work. This means an employer can also request medical proof declaring the employee is able to work prior to re-admitting them to the workplace.
The Fair Work Act does not set strict rules on the type of evidence an employee must submit. It simply states that such evidence must be reasonable and convincing to substantiate the employee’s fitness to work.
The Fair Work website provides examples of three document types.
The most common piece of evidence provided is a Medical Certificate.
A medical certificate is a document issued by a Medical Practitioner that formally states the employee’s fitness to work. A medical certificate should include:
- Name and address of the Medical Practitioner issuing the certificate;
- Name of the patient;
- The date on which the examination took place;
- The date on which the certificate was issued;
- The period or estimated period the patient was or is unfit to work.
The certificate should be legible and written in a way that a non-medical person is able to read and understand.
Certificates must be dated on the day on which they were written. They should not be backdated unless in specific circumstances where the doctor is in a position to certify that the period of illness occurred or started before the date of the examination.
Absence from Work Certificates
An absence from Work Certificate is issued by a pharmacist. A Pharmacist can only issue certificates for conditions that are within their scope of practice, such as minor ailments and for limited periods of leave.
If the employee’s illness or injury is outside a pharmacist’s ability to assess, such employee must be referred to a doctor or another healthcare professional.
This is a formal document that constitutes a personal declaration of honesty. The Declaration must include the employee’s details, date, period of absence, and a submission statement detailing why the employee could not attend work. Finally, the document must end with a professional statement, such as “I do solemnly swear that what I’ve stated in this document is the truth”.
Although the preferred document for an employer is the Medical Certificate, Fair Work would deem a company policy unreasonable if it stated that this was the only acceptable piece of evidence, as it’s not always practical for an employee to get a medical appointment.
Although the Fair Work website states, ‘ An employee who doesn’t give their employer evidence when asked may not be entitled to be paid sick or carer’s leave’, this may have a different outcome in a Fair Work claim.
The Fair Work Commission would review the employer’s refusal to pay personal leave on a case-by-case basis and base its ruling on whether it was ‘reasonable’ for the employer to refuse payment. In particular, the Commission would review the ongoing relationship between the employer and the employee and the pattern of sick leave requests made by the employee prior to the time the employer refused to pay.
Another bone of contention, often subject to interpretation, is the employer’s right to challenge or reject the evidence provided (i.e. the medical certificate) because such evidence fails to be reasonable and convincing.
Challenging or Rejecting Medical Certificates issued by a Medical Practitioner
Employers are within their rights to question and ultimately reject a medical certificate. However, they should proceed with caution. Failure to accept a genuine certificate could be considered a breach of the general protection provisions of the Act.
Employers may question the certificate’s authenticity provided if there’s reason to believe the medical certificate has been fraudulently created or altered by the employee. In this instance, they can ask the employee to provide better evidence or contact the Medical Practice to confirm if the employee has attended the clinic on the day the certificate was issued.
For short leave periods, employers are not allowed to request additional information about their employee’s diagnosis. There is no requirement under the NES that a diagnosis be provided. Furthermore, the Australian Medical Association’s Guidelines stress the importance for the doctor to protect the employee’s privacy when issuing medical certificates.
The Fair Work Ombudsman generally takes a negative view of employers who, without good reason, seek to go behind a medical certificate.
However, when an employee takes long periods of sick leave, an employer may reasonably and lawfully require more detailed medical information in order to provide a safe workplace.
A recent decision by the Fair Work Commission in a case of unfair dismissal Gadzikwa v. Australian Government Department of Human Services,  FWC 4878 confirmed that employers are entitled to reject employees’ medical certificates when they are too vague to enable the proper discharge of basic legal obligations.
Common scenarios include:
- The employee has been or will be absent on sick leave for an extended period of time, or sick leave is required on a regular/ongoing basis;
- The employee is returning to work claiming to have recovered after an extended period of incapacity;
- The employer is required to make workplace adjustments to accommodate permanent incapacity or inability to perform certain tasks previously part of the employee’s duties.
Finally, employers can also direct an employee to attend independent medical examinations.
Challenging or Rejecting Medical Certificates issued by other Health Practitioners
An employer may challenge or reject a certificate issued by a different Health Practitioner if the reason for the illness stipulated in the certificate is outside the Practitioner’s expertise or if the person issuing the certificate is not a registered or licensed practitioner.
Requesting Evidence for Carer’s Leave
Employers should be careful in challenging employees’ requests to care for or support a member of their immediate family or household, whether or not direct medical incapacity is involved.
This is an attribute for which further legal protections exist under both the Fair Work Act and Commonwealth, State and Territory anti-discrimination legislation. Treating employees adversely because they need to support family members is unlawful.
Furthermore, requesting evidence such as a Medical Certificate for an employee’s family member, who is not employed by the business, could result in a breach of Privacy laws.
Consequences for an employee when submitting false medical information
If an Employer finds that an employee has provided a fraudulent certificate, disciplinary action may be appropriate. In most circumstances, this should result in the issuing of a warning. Employment termination could be considered, particularly where it is found that the employee has provided several false certificates over a period. Employers should seek legal advice before terminating employment under these circumstances.
Falsifying Medical evidence also applies when an employee either falsifies or omits to disclose medical conditions to an employer, which may hinder them from doing their job out of fear of not being allowed to continue working.
In a recent unfair dismissal case Soans v KDR Victoria Pty Ltd T/A Yarra Trams , FWC 2876, the Fair Work Commission supported Yarra Tram’s (the employer) decision to terminate one of their tram drivers for failing to disclose he had recently suffered a stroke.
Terminating Employment during Sick Leave
Employees who are away for work due to sick leave are protected from being dismissed for up to a total time of 3 consecutive months or a total of 3 months over a 12-month period. During this time, the employee can take a combination of paid Personal (Sick) Leave, unpaid Personal (Sick) Leave, and also Annual Leave.
Employees who are absent on Personal (sick) leave for more than 3 consecutive months over a 12-month period are no longer protected from being dismissed.
However, if the Employee has enough paid Personal Leave accruals to cover the period of absence exceeding the 3 months, such employee is still protected from dismissal.
Employers must still follow the appropriate rules for carrying out a dismissal, as employees may challenge the termination by lodging an unfair dismissal claim with the Fair Work Commission.
State Government Paid Sick Leave
On 14 March 2022, the Victorian Government launched the Sick Pay Guarantee Program.
The program is an Australian-first initiative giving Victorian casual and contract workers from certain industry sectors up to 38 hours a year of sick and carer’s pay. Payments are made at the national minimum wage.
Eligible jobs covered by the Sick Pay Guarantee Program include the following industry sectors:
- Food trades or food preparation
- Aged and disability care
- Cleaning and laundry
The Program is fully funded by the Victorian Government and is subject to review 2 years from its launch date.
More information is available on the Victorian Government website: https://www.vic.gov.au/sick-pay-guarantee
As Personal/Carer’s Leave is one of the core entitlements that form the Fair Work National Employment Standards, employers should ensure they understand and manage this entitlement correctly.
Failing to calculate or pay Personal/Carer’s Leave correctly or rejecting certain documents as reliable evidence may result in immediate action by Fair Work Australia.
As for any other components that make up the complex Australian Industrial Legislation, Personal/Carer’s Leave is once again an easy concept on the surface but stores many levels of complexity.
With Payroll data becoming more timely and transparent to the Australian Government, it’s best to be outsourced to a registered professional.
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This blog and attached resources are of general nature designed for informational and educational purposes only. They should not be construed as professional financial advice for your individual business. Should you need such advice, consult a licensed financial or tax advisor.