Leave entitlements are a cornerstone of workplace rights in Australia. They provide employees with rest, recovery, and time to care for themselves or their loved ones, while ensuring businesses remain fair and legally compliant. Yet, many employers—whether due to oversight or misunderstanding—still make mistakes when it comes to managing annual, sick, and carer’s leave. These errors can quickly become costly, exposing businesses to disputes, back-pay obligations, and penalties under workplace law.
This article explores the differences between these entitlements, the benefits they provide, and the most common mistakes employers must avoid.
Understanding the Different Types of Leave
Annual Leave
Full-time and part-time employees are entitled to four weeks of paid annual leave each year, with some shift workers receiving five. This entitlement builds up progressively and is paid at the employee’s base rate of pay. Annual leave is essential for maintaining a healthy work-life balance and reducing burnout.
Sick Leave (Personal Leave)
Employees accrue ten days of paid personal leave each year if they are full-time, or a proportional amount if they are part-time. This leave allows workers to take time off when they are unwell without financial stress.
Carer’s Leave
Carer’s leave falls under the same entitlement as personal leave. It enables employees to take time off to care for an immediate family member or household member who is sick, injured, or facing an emergency. It can be taken as a full day or part day, depending on the circumstances.
The Benefits of Proper Leave Management
When managed correctly, leave entitlements benefit both employers and employees. Staff are more likely to remain engaged, productive, and loyal when they feel supported in balancing their health and personal responsibilities. Employers who comply with leave laws not only avoid disputes but also foster a culture of fairness and trust that strengthens workplace culture.
What Employers Often Get Wrong
Despite clear legal requirements, mistakes are common. Some of the most frequent errors include:
- Misunderstanding accrual rules
Employers often calculate leave incorrectly. A common mistake is treating personal leave as an hourly entitlement rather than as days, which can reduce an employee’s correct entitlement. Similarly, annual leave accrues based on ordinary hours worked and does not account for any overtime hours worked by the employee. - Overlooking pro-rata entitlements
Part-time employees are entitled to the same benefits as full-time staff on a proportional basis. Denying part-time workers their fair share of sick or annual leave, or treating them as if they are casual employees, is a frequent error that leads to underpayment claims. - Failing to pay out accrued annual leave on termination
When employment ends, whether through resignation or dismissal, any unused annual leave must be paid out at the employee’s base rate. Employers who overlook this requirement or delay payments are at risk of Fair Work claims. - Mishandling evidence requirements
While employers are entitled to request reasonable evidence (such as a medical certificate), some impose unnecessary or overly strict requirements. For example, demanding a certificate for every single day of absence, even short illnesses, can breach workplace laws. This practice can also damage trust between employers and staff. - Inadequate record keeping
Accurate records of leave accrual and usage are legally required. Without these, employers may be unable to prove compliance during audits or disputes. Poor systems or inconsistent record-keeping practices leave businesses exposed to claims of unpaid entitlements. - Confusing different types of leave
Another common issue arises when employers confuse personal leave, carer’s leave, and unpaid leave. For example, requiring employees to use annual leave when they are caring for a sick child, or denying paid personal leave in genuine circumstances, creates legal risks and employee dissatisfaction. - Ignoring carry-over rules
Annual leave that is not taken continues to accrue. Some employers mistakenly impose “use it or lose it” rules, which are unlawful. Forcing employees to forfeit accrued leave can lead to significant back-pay liabilities.
Things to Avoid During Employment
Employers should avoid treating leave as a discretionary benefit rather than a legal entitlement. Blocking legitimate leave requests, applying rules inconsistently, or ignoring proper procedures can expose businesses to claims of adverse action.
It is also important not to penalise employees for exercising their rights. For example, disciplining staff for taking sick leave when they are genuinely unwell may amount to unlawful treatment under workplace law.
Finally, employers should avoid relying solely on payroll software without regular oversight. While technology is helpful, compliance still depends on correct data input, regular audits, and clear policies.
How NB Employment Law Can Help
Leave management is one of the most common areas of dispute in employment law. At NB Employment Law, we support employers by providing clear, practical advice that ensures compliance while reducing workplace conflict.
We can help you:
- Review and update leave policies and employment contracts.
- Ensure correct application of leave entitlements for full-time, part-time, and shift workers.
- Advise on managing disputes about leave and evidence requirements.
- Provide training for HR teams and managers on best practice leave management.
- Represent employers in Fair Work or legal proceedings where disputes arise.
Proper leave management is not just a compliance issue; it is about creating a healthier, fairer, and more productive workplace.