Accruing Annual Leave whilst on Workers Compensation
Scenario: Your employee has been absent from work on workers compensation for exactly 6 months, before returning to work. On the day that the employee returns to work, would they have accumulated two weeks' of annual leave for the period that they were absent?
The Fair Work Act - Section 130 of the Fair Work Act 2009 (Cth) provides that an employee is not entitled to take or accrue any leave (whether paid or unpaid) during a period (a compensation period) when the employee is absent from work because of a personal illness, or a personal injury, for which the employee is receiving compensation payable under a law (a compensation law) of the Commonwealth, a State or a Territory that is about workers' compensation.
However, that section goes on to state that an employee is not prevented from taking or accruing leave during a compensation period if the taking or accruing of the leave is permitted by a compensation law.
Case - The case of Anglican Care v NSW Nurses and Midwives' Association [2015] FCAFC 81 concerned an Employer that had not accrued annual leave to a nursing assistant while she was absent and on workers' compensation. When her employment was terminated, she received no payment for any annual leave accrued after her workers' compensation had commenced.
Her union claimed that the provider had breached the Fair Work Act 2009 (Cth) by not accruing annual leave during her absence. The Employer argued that because the state workers compensation law (which in this case, was the NSW Workers Compensation Act) did not expressly provide that employees had an entitlement to take or accrue annual leave when receiving workers' compensation, they did not have to pay annual leave.
But the Court disagreed. Their view was that state workers' compensation laws 'permit' an entitlement if they do not expressly prevent or prohibit it.
In other words, because the NSW Workers Compensation Act does not clearly state that workers' compensation recipients cannot take or accrue annual leave, it must mean that they are permitted to take or accrue that leave.
Implications - This decision means that NSW employees receiving workers' compensation are also entitled to annual leave accrual. In Victoria and WA, which have similarly worded provisions about employee entitlements for workers' compensation, it is likely that the question about annual leave accrual would be decided the same way.
In Queensland, South Australia, and the ACT, the compensation laws in those states already confirm that employees on workers' compensation continue to accrue annual leave.
Tasmania is currently the only jurisdiction that expressly says employees may not take annual leave and workers' compensation at the same time.
Proposed Amendments - The Federal Government does have a provision in its proposed workplace reform package that would remove all employees' entitlements to take or accrue leave when receiving workers' compensation, which would override other current compensation laws.
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