Leave is the area where small employers most often act on what they believe the rules are rather than what they are, usually with the best intentions and occasionally at real cost.
The entitlements come from legislation, and a sectoral determination or bargaining council agreement may set more generous ones for your industry. You may always give more than the minimum. You may never give less, and an employee's agreement to less does not make it lawful.
The kinds of leave
Annual leave accrues as the employee works, over a defined cycle. It must actually be granted and taken — it is a rest entitlement, not a savings account — and there are rules about when it may be taken and how it is paid.
Sick leave works on a multi-year cycle rather than a calendar year, which surprises people. There are provisions about when a medical certificate may be required, and they are narrower than most employers assume — asking for one for a single day's absence is not automatically permitted.
Family responsibility leave is a limited annual entitlement for specific circumstances, such as the illness of a child or a death in the immediate family.
Maternity leave is a substantial unpaid entitlement, with UIF providing income replacement subject to its own rules. There is also parental leave, and the provisions here have changed in recent years and been the subject of litigation, so confirm the current position rather than relying on what applied when you last dealt with it.
The mistakes that cost money
Paying leave out instead of granting it. Annual leave is generally meant to be taken. Paying it out in place of time off is restricted, and an accumulated balance eventually becomes a real liability on the books and a real argument at the end of employment.
"Use it or lose it." Leave does not simply evaporate at year end because a policy says so. There are rules about carrying over and about when it must be granted.
Refusing leave indefinitely. You can manage when leave is taken around the business's needs. You cannot manage it into never.
Not recording it. Where there is no record, disputes are resolved on whatever evidence exists, and an employee's diary is evidence.
Keep a leave register
A simple record per employee: opening balance, accrued, taken, and the current balance, updated whenever leave is taken and reflected on the payslip.
This is a spreadsheet at minimum and a feature of any payroll software. It takes moments and it resolves in seconds arguments that otherwise take days — including the one that arises when somebody leaves and the final payment has to account for an accumulated balance.
Write your own policy down
Above the legal minimum, you have choices: how much notice you want for leave, whether there are periods when leave is difficult, whether you offer more than the minimum. Write those down and give them to people when they start.
Most leave disagreements in small businesses are not about entitlement. They are about expectation, and the fix is a page of text everybody has seen.
General guidance, not legal advice. Leave entitlements are set by legislation and sometimes by sectoral determinations, and parental leave provisions in particular have changed; confirm the current position.