Termination pay with Negative Sick Leave
We have an employee who has just resigned and has given us 2 weeks notice. They currently owe approx 13 hours of sick leave (the business tried to do the right thing and help out the employee)
I need to process there final pay next week, they have sufficent Annual leave to cover it approx 18 hours. Whats the best and correct way to process it.
Hi MonAdmin
A sticky moral dilemma that I learnt years ago to NEVER do - and we "in good faith" allowed staff to go into negative sick leave - and sometimes with new staff members) without an annual leave buffer - and in every case it was abused.
The other thing I found over years and years of employing staff - is that they start suddenly getting sick around the time they are looking for a new job and or thinking of resigning.
Few staff - just tell you - work up to the last day and go.
So how do you deal with this - firstly - never give a staff member (except in exceptional cases) the ability to go into negative - full stop - end of story - stops any problem in the future.
Secondly - when new members start they get a brief - no sick leave, no annual leave - no pay!!!!! However, if they have annual leave to cover - noted on their next pay I will top up their sick leave with annual leave to enable them to be paid.
How to handle your situation - simple - in the final pay
memo = 18 hrs accrued annual leave less 13 hrs sick leave (as accrued sick leave nil). Net annual leave in final pay = 5 hours and simply pay it as though they are going on leave.
There are rules and I do not know your industry but you are not talking about a lot of accrued annual leave - so though it is a lump sum for accrued annual leave - 5 hrs is hardly going to make a big difference.
Keep it simple and clean and easy.
That is just my opinion - someone may say differently - up to you on the method.
The Doc
