What To Do When An Employee Has No Sick Leave Left In Australia

At some point, most employers face the same tricky situation: a team member calls in unwell, but their leave balance is sitting at zero. When you hear an employee say they have no sick leave left, it can put you in a tough spot - especially if you’re trying to keep the business running smoothly, stay fair to your team, and meet your legal obligations.

The good news is there are practical, lawful options. The key is knowing what you can (and can’t) do under Australian employment law, how to manage the process consistently, and what paperwork or policies you should have in place to protect your business.

Below, we’ll walk through what “no sick leave left” really means for employers, what to do next, and how to reduce the risk of disputes while supporting your team.

What Does “No Sick Leave Left” Mean For Employers?

In Australia, “sick leave” is typically referred to as personal/carer’s leave. For full-time employees, this usually accrues at 10 days per year (pro-rata for part-time employees) and carries over year to year if unused.

When an employee has no sick leave left, it generally means they’ve used up their paid personal/carer’s leave balance. From an employer perspective, this raises two immediate questions:

• Do you still have to let them take time off?
• Do you still have to pay them?

In many cases, you won’t have to pay them if they’ve exhausted their paid personal/carer’s leave. Whether you have to approve time off (and how to record it) depends on the reason for the absence, the employment type, the relevant award or enterprise agreement, and your workplace policies.

Check Whether The Employee Is Full-Time, Part-Time Or Casual

The first step is to confirm their employment category because entitlements differ:

• Full-time employees accrue paid personal/carer’s leave.
• Part-time employees accrue paid personal/carer’s leave on a pro-rata basis.
• Casual employees generally do not get paid personal/carer’s leave under the National Employment Standards, and they can generally decline shifts when they’re unwell (subject to any roster/shift arrangements and any applicable award terms).

If you’re unsure whether your worker is actually a casual or has been operating more like a permanent employee, it’s worth checking early - classification mistakes can create bigger legal issues later.

Distinguish Between “Sick Leave” And Other Leave Types

If your staff member has no sick leave left, they might still have access to other leave options, such as:

• annual leave
• unpaid leave (only where it’s available under an award/enterprise agreement, a contract, an employer policy, or by agreement)
• long service leave (depending on the state/territory rules and eligibility)
• carer’s leave (if their absence relates to caring for immediate family or household members, though it draws from the same personal leave balance)

A practical tip: always separate “What leave category is this?” from “How do we manage the absence?”. This keeps your process consistent and reduces the risk of treating employees differently without a lawful reason.

What Are Your Legal Obligations When An Employee Has No Sick Leave Left?

When an employee tells you they have no sick leave left, you don’t automatically gain the right to refuse time off, demand they work while ill, or take disciplinary action. But you also don’t automatically have to pay them.

Your obligations usually fall into these areas:

1) Don’t Take Adverse Action Because They’re Sick

Australian workplace laws protect employees from being treated unfairly because they’re temporarily absent due to illness or injury (as long as they comply with notice and evidence requirements that apply). This is where employers can accidentally step into risky territory if they respond reactively.

Even where the absence is unpaid (because there’s no paid balance left, or because of how the absence is recorded), you should still handle the situation carefully and consistently.

2) Consider Work Health And Safety (WHS)

If a worker is unwell, requiring them to attend work can create WHS risks - particularly in customer-facing roles, roles involving physical work, or workplaces where communicable illness could spread.

As an employer, you have a duty to provide a safe workplace. In many cases, it’s both lawful and sensible to encourage a genuinely unwell employee to stay home and recover.

3) Follow Your Award, Enterprise Agreement, Or Contract

Some modern awards and enterprise agreements contain specific rules about:

• notice requirements when an employee is sick
• what evidence can be requested
• minimum engagement rules (particularly for part-time or casual employees)
• when unpaid leave is available (if at all) and how it works

This is one reason a well-drafted Employment Contract (and correct award alignment) matters - it helps you manage absences with fewer surprises.

4) If There’s No Balance Left, The Absence May Be Unpaid (But Check The Basis)

If an employee has used up their paid personal/carer’s leave balance, there isn’t a general National Employment Standards entitlement to “unpaid sick leave” for permanent employees. That said, an absence might still be managed as unpaid time off where it’s permitted under an applicable award/enterprise agreement, your contract or policy, or simply by agreement between you and the employee.

It’s important to communicate the approach clearly, confirm it in writing (even a short email), and apply the same approach across your workplace.

Step-By-Step: What To Do When You Hear “No Sick Leave Left”

When you’re running a small business, the challenge isn’t just the law - it’s the practical reality of staff shortages, client deadlines, and the flow-on impact when someone can’t work. Here’s a straightforward process you can use.

Step 1: Ask For Notice (And Basic Details)

Your employee should notify you as soon as possible that they can’t attend work. You can ask:

• Are you unfit for work today?
• When do you expect to return?
• Do you need any adjustments when you return?

You generally shouldn’t ask intrusive medical questions. Focus on the operational essentials and whether they’re fit to work.

Step 2: Check Their Leave Balances And Any Relevant Industrial Instrument

Confirm:

• their paid personal leave balance
• any annual leave balance
• the applicable award or enterprise agreement rules (if any)
• your internal policies on notice, evidence, and unpaid leave (if you offer it)

Also make sure payroll records are accurate. Leave disputes often start as “admin issues” and escalate because the employee believes they still had a balance available.

Step 3: Decide What Leave Category Applies

Common options include:

• Annual leave (only if the employee requests it and you agree, or if your agreement/policy allows it in a compliant way)
• Unpaid leave (only where it’s available under an award/enterprise agreement, a contract, a policy, or by agreement)
• Other approved arrangements (for example, special unpaid leave arrangements or adjusted hours)

If the employee is asking to use annual leave while sick, tread carefully and make sure you’re not pressuring them into it. If you want a deeper read on the overlap, this is often raised in conversations about whether employees can use annual leave for illness.

Step 4: Request Evidence If Appropriate

You may be able to request evidence (like a medical certificate or statutory declaration) depending on the circumstances and any applicable award/enterprise agreement, contract, or policy. In practice, evidence is most commonly required to support paid personal/carer’s leave, but some workplaces also set reasonable expectations for evidence where an employee is seeking other approved time off due to illness.

Evidence requests should be reasonable and consistent. For example, you might request evidence:

• for absences of 2+ days
• when absences occur on patterns (for example, always Mondays)
• where your award requires evidence for paid personal leave (and you apply a comparable, reasonable approach to other illness-related absences)

Be cautious about blanket rules that don’t fit your workplace - consistency matters, but so does reasonableness.

Step 5: Confirm The Arrangement In Writing

After a quick phone call or SMS exchange, follow up with a short written confirmation. For example:

• the dates of the absence
• whether it’s unpaid time off (or annual leave if agreed)
• what evidence is required (if any) and the deadline
• any expected return date

This is one of the simplest ways to reduce misunderstandings.

Can You Direct An Employee To Take Annual Leave If They Have No Sick Leave Left?

This is a common question for small businesses dealing with repeated absences: can you simply tell the employee to use annual leave because they have no sick leave left?

In most cases, you shouldn’t treat annual leave as an automatic replacement for sick leave.

Annual leave is for rest and recreation. While employees can request to use annual leave when they’re sick (and you can agree), directing annual leave has legal rules and isn’t always appropriate.

Things to consider include:

• what the employee is requesting (unpaid time off vs annual leave)
• whether your award or agreement permits direction in certain circumstances (for example, shutdown periods)
• whether directing leave could be seen as unreasonable or punitive

If you’re unsure, it’s usually better to document the absence as unpaid leave only where that’s permitted (for example, by agreement, policy, or an applicable industrial instrument), rather than forcing annual leave as the default.

What About Negative Leave Balances?

Some businesses allow staff to “go into the negatives” on sick leave or annual leave. This can work operationally, but it comes with risk (especially if the employee resigns or is terminated while in a negative balance).

If you want to allow negative leave balances, have a clear written policy and ensure any repayment arrangements are lawful and properly documented. It’s worth having this reflected in your contracts and policies so it’s not handled on an ad-hoc basis.

When “No Sick Leave Left” Becomes A Bigger Issue: Frequent Absences, Medical Capacity, And Long-Term Illness

Sometimes having no sick leave left isn’t just a one-off issue - it’s a sign that an employee might be dealing with an ongoing medical condition, injury, or personal situation that affects their ability to work consistently.

When that happens, the priority for employers is to manage the issue lawfully and respectfully, without jumping too quickly to performance management or termination.

Frequent Short Absences

If the absences are frequent but short, you may need to look at:

• whether the employee is actually unfit for work or there is another issue (for example, caring responsibilities or burnout)
• whether you need to discuss attendance expectations
• whether workplace adjustments could help (for example, modified duties or temporary flexible hours)

A structured conversation, documented appropriately, often prevents bigger disputes later.

Medical Clearance And Fitness For Work

If there are safety concerns or the employee’s capacity to do the role is unclear, you may be able to ask for medical clearance before they return.

This needs to be handled carefully - you want enough information to manage risk, but you also need to respect privacy and avoid unreasonable demands. In some cases, employers can request medical clearance to return to work, particularly where the job has inherent safety risks.

Where this becomes complex, it helps to get tailored advice early rather than escalating conflict.

Standing Down Or Suspending During Investigation (Be Careful)

Sometimes employers consider standing down a worker if they believe absences are not genuine. However, standing down and suspension are specific tools with strict requirements and they’re not a general solution for illness-related absences.

If you suspect misconduct (for example, falsified medical certificates), you may need a proper investigation process before taking action. It’s also important to avoid knee-jerk decisions that could expose you to unfair dismissal or general protections claims.

If you’re considering this path, you may want guidance on standing down an employee pending investigation to understand when it’s appropriate and how to approach it.

Policies And Documents That Make “No Sick Leave Left” Easier To Manage

When you’re dealing with the day-to-day realities of staff leave, the businesses that cope best are usually the ones with clear documentation and consistent processes.

Here are key documents and policies that can help protect your business and reduce disputes when an employee has no sick leave left:

• Employment Contract: Sets expectations around hours, leave, notice of absence and compliance with policies. A properly drafted Employment Contract is a strong starting point.
• Workplace Leave Policy: Explains how employees notify you, when evidence is required, and how unpaid time off is handled where it’s available once paid leave is exhausted.
• Staff Handbook: Helps keep all the “how we do things here” rules in one place, which is especially useful as your team grows.
• Payroll And Record-Keeping Process: Ensures leave balances are accurate and that you can show a clear paper trail if a dispute arises.

If you want your contracts and policies to align with your actual workplace (not just a generic template), it’s worth getting them reviewed and tailored. That’s often where we see the biggest risk reduction for small businesses.

Make Sure Your Process Matches Your Rostering And Shift Change Rules

In many industries, the operational pain of illness isn’t just the absence - it’s the late roster change and trying to cover a shift quickly.

If you run a rostered workplace, it’s worth ensuring your internal practices are consistent with your obligations around roster changes and cancellations. This is especially important if you employ casuals, where changes to shifts can create compliance issues if mishandled.

Depending on your workplace, it may also be relevant to have a clear shift cancellation policy.

Consider The Practical “Return To Work” Process

Once the employee returns, consider a short return-to-work check-in. This can be as simple as:

• confirming they’re fit to work
• checking whether they need temporary adjustments
• reminding them about evidence requirements (if they haven’t provided it yet)
• confirming how the absence was recorded (unpaid vs annual leave)

This doesn’t need to be formal - but having a consistent approach can prevent confusion and resentment.

Key Takeaways

• When an employee has no sick leave left, you generally won’t need to pay personal/carer’s leave - and whether time off can be approved (and how it’s recorded) will depend on any applicable award/enterprise agreement, your policies, and what you agree with the employee.
• Start by confirming the worker’s employment type (full-time, part-time, casual) and checking any applicable award or enterprise agreement rules.
• You can often ask for reasonable evidence of illness where it’s required under an industrial instrument or your policies, but apply your approach consistently and avoid overly intrusive requests.
• Be cautious about directing annual leave as a default substitute for sick leave - in many situations, agreeing on unpaid time off (where permitted) may be the cleaner option.
• If “no sick leave left” is part of a pattern, consider a structured approach around attendance expectations, capacity, and (where appropriate) medical clearance.
• Clear contracts and leave policies help you manage absences confidently, reduce disputes, and keep your business operating smoothly.

This article is general information only and does not constitute legal advice. If you’d like help setting up clear leave processes, reviewing your workplace policies, or putting the right Employment Contract in place, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.