Leave Entitlements During Probation Periods in New Zealand

Hiring someone new is exciting, but it can also be a little nerve-wracking - especially when you’re a small business and every new hire matters.

Probation periods are often used to help you confirm whether a new employee is the right fit. But what happens when, right in the middle of that period, they ask for (or need) time off?

This is where many employers start Googling probation period leave and realising there’s a lot of confusion about what you can and can’t do in New Zealand.

In this guide, we’ll walk you through how leave works during a probation period in NZ, what the law expects from you as an employer, and how to handle tricky scenarios (like repeated absences, sick leave requests, and annual leave over Christmas) without risking an employment dispute.

What Is A Probation Period In NZ (And Why Leave During It Can Be Tricky)?

In everyday business terms, a probation period is the “getting to know you” stage of employment. You’re checking whether the employee can do the job, fits your workplace, and meets expectations.

Legally though, it’s important to know that a probation period isn’t a free pass to ignore employment obligations. A new employee still has the same fundamental rights and protections as anyone else in your team - including around good faith, fair process, and minimum statutory entitlements.

Where leave becomes tricky is that time off can:

• reduce the amount of time you’ve actually observed the employee working;
• delay training and performance assessment;
• create resourcing stress for your business; and
• raise questions about whether you can “extend” the probation period or terminate if they take leave.

Before you make any decisions, check what your employee’s written terms say. This usually starts with having a properly drafted Employment Contract that clearly addresses probation (and, if relevant, trial periods), hours, and leave processes.

Probation Period Vs Trial Period (Quick Clarifier)

Employers often mix these up. In NZ, a 90-day trial period (when valid and properly agreed before the employee starts work) can provide additional termination flexibility in the early days of employment. However, trial periods are generally only available to eligible small employers (currently those with 19 or fewer employees at the time the employee starts).

A probation period generally involves extra monitoring and support, but you still need a fair reason and fair process if you decide to dismiss.

Because the legal implications can be very different, it’s worth getting advice if you’re not sure which one your contract actually uses.

Does An Employee Accrue Leave During A Probation Period?

Yes - generally, leave entitlements can still accrue and apply during a probation period, depending on the type of leave.

In New Zealand, employee leave is primarily governed by the Holidays Act 2003. The key point for employers is that probation doesn’t “pause” the Holidays Act.

Sick Leave During Probation

Sick leave entitlement under the Holidays Act typically becomes available after the employee has completed 6 months’ employment (either continuous, or otherwise meeting the Act’s eligibility test based on their work pattern). So if your probation period is shorter than 6 months, they may not yet have a statutory paid sick leave entitlement.

However, a few important cautions:

• Your employment agreement might provide better leave than the minimum legal standard (for example, sick leave available from day one).
• Even if they aren’t entitled to paid sick leave yet, you still need to manage any illness absence reasonably and in good faith.
• If the absence relates to a disability or health condition, you should be very careful about discrimination risks under the Human Rights Act 1993.

If you’re dealing with a wellbeing-related absence, you may also find it helpful to review your approach to mental health leave so your managers respond consistently and appropriately.

Annual Leave During Probation

Annual leave doesn’t usually become “available” until the employee has completed 12 months of continuous employment.

But in practice, annual leave can still come up during probation because:

• employees may request annual leave in advance (sometimes called “annual leave on an accrued basis” or leave in advance);
• your business may have a shutdown period (for example, over Christmas/New Year); or
• you might have agreed to a planned holiday before they started.

This is why questions about probation period leave often involve annual leave - even where the employee hasn’t technically reached the 12-month threshold.

Bereavement Leave And Family Violence Leave

Some leave types are also tied to eligibility periods. For example, family violence leave generally becomes available after 6 months, similar to sick leave (either 6 months’ continuous employment, or otherwise meeting the Act’s work-pattern eligibility test).

Bereavement leave is also generally available once the employee has become entitled to sick leave (again, either after 6 months’ continuous employment or under the work-pattern test), although the amount and whether a bereavement qualifies can depend on the relationship and the circumstances.

These are areas where it’s easy to get caught out, so if you’re unsure, get tailored advice (especially before refusing a request).

How Should You Handle Probation Period Leave Requests As An Employer?

When a new employee asks for leave during probation, your best approach is to treat it like any other leave request - but with extra care around documentation and fairness.

Here’s a practical process many small businesses follow.

1) Check The Employment Agreement First

Your starting point should always be the contract terms. A good contract will cover:

• how leave requests must be made (notice requirements, forms, roster processes);
• whether any leave can be taken “in advance”;
• what medical evidence can be requested for sick leave; and
• how the probation period will operate (including review meetings).

2) Apply Your Policies Consistently

If you have a staff handbook or workplace policy, follow it. Consistency matters because inconsistent treatment can look unfair - and unfairness is often what escalates issues into grievances.

If you don’t have policies in place yet, it’s worth getting them sorted early through a Staff Handbook, especially once you start growing your team.

3) Communicate In Writing

Even for a small business, a short written record is your friend. Confirm:

• the dates of leave approved (or declined);
• whether it’s paid or unpaid (and why);
• any conditions (for example, providing a medical certificate); and
• what impact it may have on training or probation review timing (without implying punishment).

4) Don’t Treat Leave As “Bad Behaviour”

This is a big one. Leave (especially sick leave or bereavement-related absence) shouldn’t be framed as misconduct. Even where the employee isn’t yet entitled to paid leave, you still need to act in good faith and avoid knee-jerk reactions.

If absences become frequent, you can address reliability and attendance as a performance/availability issue - but you’ll want to do that carefully and with a fair process (more on that below).

Can You Decline Leave During A Probation Period (And When Is It Risky)?

Sometimes you genuinely can’t approve leave - you might have peak trading periods, minimum staffing needs, or the employee’s role might be hard to cover.

Whether you can decline a request depends on:

• the type of leave being requested;
• the employee’s legal entitlement (if any);
• the wording of the employment agreement; and
• whether declining is reasonable in the circumstances.

Annual Leave Requests

Generally, annual leave is taken at a time agreed between employer and employee. That means you can usually say “not those dates” if you have genuine business reasons - but you should still respond reasonably and propose alternatives where you can.

Be cautious about “forcing” annual leave, especially for new employees. If you’re considering directing leave (for example, during a shutdown), make sure you understand the rules around forced annual leave and the notice requirements.

Sick Leave (And Evidence Requests)

If an employee is genuinely unwell, you generally shouldn’t be “declining” sick leave. The question is usually whether it’s paid sick leave (if they’re eligible) and whether you can request evidence.

In NZ, employers can usually ask for proof of sickness (like a medical certificate) if the employee is away for 3 or more consecutive calendar days. You can also ask for proof earlier (including from day one), but if you do, you generally need to pay the reasonable costs of getting that proof. The details matter, so get advice if you’re dealing with repeated short-notice absences.

Unpaid Leave

If an employee isn’t entitled to paid leave yet (common during probation), they might request unpaid leave. You can consider this request based on business needs, but you still need to act in good faith and respond fairly.

A practical approach is to assess:

• how much notice they’ve given;
• whether the leave is for something unavoidable (for example, a medical appointment);
• your operational needs and whether cover is possible; and
• whether you can offer an alternative (shift swaps, changed hours, different days off).

Can You Extend A Probation Period Because The Employee Took Leave?

This is one of the most common questions we see from employers dealing with probation period leave.

The short answer is: you can’t unilaterally extend the probation period just because someone took leave, unless your employment agreement clearly allows for that and you handle the change properly.

In NZ, changing key employment terms usually requires consultation and agreement. If you try to “extend probation” without consent, you risk a dispute about whether the original probation ended and whether your later actions are unfair.

If you’re in a situation where a lot of leave means you haven’t had a proper chance to assess performance, a safer approach is:

• continue performance management in a structured way;
• document expectations and support provided; and
• consider whether more time is needed - then discuss this openly with the employee and seek agreement.

It can feel awkward to have that conversation, but handled well, it’s often better for both sides than rushing to conclusions based on limited time on the job.

Can You Terminate Someone During Probation If They Take Leave?

This is where employers need to slow down and be careful.

You generally shouldn’t terminate an employee simply because they took leave (or asked for it). That can create legal risk, including allegations that the dismissal was unjustified or that the employee was disadvantaged for exercising workplace rights.

That said, you can terminate employment during a probation period if you have:

• a genuine, work-related reason (for example, performance issues, misconduct, or role mismatch); and
• a fair process (including raising concerns, giving the employee a chance to respond, and considering alternatives).

Common Risk Scenarios For Employers

Some of the highest-risk probation period leave termination scenarios include:

• terminating right after sick leave without clear performance documentation (it can look retaliatory);
• terminating after a mental health-related absence without considering support or adjustments;
• treating absences as misconduct when they’re actually illness-related; and
• changing hours or shifts to “manage around” leave without agreement (this can trigger disadvantage claims).

If you’re considering changing working hours due to resourcing or reliability concerns, make sure you understand the legal expectations around reducing staff hours - it’s not something you can usually do unilaterally.

Also Watch Your Notice Obligations

If you do end employment, check the contract for notice requirements and ensure final pay is handled correctly. Some businesses consider paying notice out instead of having the employee work it - but it needs to be done properly. For a refresher, see how payment in lieu of notice works in practice.

Practical Tips To Prevent Leave Issues During Probation

Most problems around probation period leave aren’t caused by “bad employees” - they’re caused by unclear expectations and rushed processes.

Here are practical steps you can implement early to protect your business (and keep things fair for your team).

Set Expectations In The Offer Stage

If you know your busiest periods (for example, retail peak season, summer trading, EOFY), it’s okay to be upfront. Many businesses include a simple conversation like:

• “We’ll always consider leave requests, but December is our peak period - if you’ve got planned travel, tell us now so we can plan.”

This doesn’t remove legal entitlements, but it helps avoid surprises.

Plan Probation Reviews (Don’t Leave It Until The End)

Schedule check-ins at week 2, week 4, and week 8 (or similar), depending on the length of the probation period.

That way, if the employee takes leave, you still have a structured record of:

• training provided;
• what they’ve been doing well;
• what needs improvement; and
• what support you offered.

Use Clear Leave Request Processes

Even a simple system helps, such as:

• leave requests by email (so there’s a record);
• minimum notice periods where possible; and
• approval rules (who approves, how rosters are adjusted).

Be Careful With Medical Information

If a leave request involves health details, remember you are handling sensitive personal information. Keep it confidential, limit access internally, and store it securely.

If you collect or store employee information more broadly, it’s worth reviewing your internal approach with an Employee Privacy Handbook so your managers don’t accidentally overshare or mishandle documents.

Document, Document, Document

If you end up in a dispute, what matters isn’t just what happened - it’s what you can show happened.

Keep a record of:

• leave requests and outcomes;
• medical certificate requests (and who paid, if applicable);
• probation review notes;
• performance feedback and training; and
• any changes agreed (hours, duties, extended training timeframes).

Key Takeaways

• Even during a probation period, employees still have key legal protections - probation doesn’t remove your obligations around good faith, fairness, and minimum entitlements.
• Probation period leave commonly comes up around sick leave, annual leave in advance, shutdown periods, and unexpected personal situations.
• Whether you can approve or decline leave depends on the type of leave, the employee’s eligibility under the Holidays Act 2003, and what the employment agreement says.
• You generally shouldn’t extend a probation period unilaterally because an employee took leave - if more assessment time is genuinely needed, discuss it and document any agreement.
• Terminating employment because an employee took leave is high-risk; if you need to end employment during probation, make sure you have a genuine reason and follow a fair process.
• Strong documentation, consistent leave processes, and regular probation check-ins are some of the best ways to avoid disputes.

If you’d like help setting up employment contracts, leave processes, or managing a tricky probation period situation, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.