Q: We have had an employee on Sick LWOP since August 2022 and I’m about to process her final pay as she is retiring.
Just wondering if she accrues Annual Leave over the period that she was on Sick LWOP? Our payroll software has calculated an accrual for that period and I’m just not sure if we legally need to pay it or not?
A: Under section 16 of the Holidays Act unpaid SL is counted as continuous employment so the employee would be accruing leave (annual leave). On termination annual leave is paid out based on the greater of AWE and OWP, AWE will = 0 but OWP is based on the agreed week for the employee (from their employment agreement).
Q: Just wondering – are you able to define long term LWOP as “continuous employment”?
A: If you define unpaid leave as unpaid sick leave then under the Holiday Act that is continuous employment, you state it as Sick LWOP (same thing). If you are now stating it was just unpaid leave, then by law, the first week is continuous employment, but then anything more time provided is based on what was agreed, so it could have been agreed the second week onward would be a break in service (not counted as continuous employment ), or it will be counted as continuous employment. So, it is based on what was agreed between the employer and employee, payroll cannot just decide.