Here are my 2 cents 1. Never ever do F&F settlement the way its been said above, b'cos in a situation like this you will de-moralize her which will impact her from coming out of her illness, especially in the situation when she needs the HELP to the most 2. You said she is an GOOD employee, the word "GOOD" is very important here b'cos these are the people who become PILLAR of the company over a period of time. Being with them in a situation like this will setup MORALE values amongst others. 3. Folks, do remember the SOCIAL aspect of business b'cos w/o that company can slide thru the roof in 1 day. It's b'cos of people Morale & rigidity to fight everything keeps the company alive. My suggestion, as long as the lady wants to take leave ler her (you are not paying anways, so it does not affect your Financial Books), but if things turn around she will come back with FULL POWER that you will never be able to believe. Support her, she will go long ways...