Clement said he's proposing a format that would include five to seven sick days a year, a short term disability leave of a week to six months and long term leave for more than six months. The changes would also eliminate bankable sick days, he said.
Speaking at a provincial Progressive Conservative conference in Nova Scotia, Clement said the proposed changes are fair and would do more to address things like mental illness than the current system does.
"(The) 40-year-old sick leave system we have now really does not appropriately highlight some of the other factors that are now acknowledged, like mental health issues... whereas 40 years ago they might have been stigmatized," said Clement in an interview, adding that mental illness currently accounts for nearly half of all sick leave.
Clement said the average public servant retires with 111 banked sick days. But some younger or new public employees do not have enough accumulated sick days to deal with a catastrophic illness, he said.
"We have employees who run out of their sick days and then have to go on (employment insurance) to help pay the bills," Clement told the crowd of Tories at a Halifax hotel. "I don't think that's a good system for them, in fact, I think it's an immoral system."
The changes will be discussed over the next year as part of negotiations with 17 public sector unions, said Clement.
One of those unions, the Public Service Alliance of Canada, accused Clement of having plans to contract out sick leave policy.
"When the Minister refers to a short-term disability plan, he means contracting out the management of the sick leave system to a third-party administrator; where caseloads are managed for profit, pushing employees back to work as quickly as possible," said PSAC president Robyn Benson in an email Saturday.
Earlier this week, the parliamentary budget office said public servants take an average of 11.5 paid sick days a year, compared with 18 days reported by Clement.
The report said Clement's number includes time missed due to workplace injuries and unpaid sick leave.
It estimated the salary paid for sick days amounted to $871 million in 2011-12, about 68 per cent higher than the estimate 10 years prior, which includes inflation.
But the report said growth in the size of the public service, wages and number of paid sick days available all contributed to the doubling of sick-leave costs in the last decade and the use of sick leave between departments varies significantly.
The governing Conservatives, who are tabling a budget next week, say they are taking aim at the public service in their efforts to balance the books in 2015.
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