Kim McLagan and Neath Sokhom, from FCW Lawyers’ workplace relations team, have compiled this useful table below which sets out if employees can accrue and take annual, personal and long service leave whilst they are absent from work and receiving workers compensation payments.
This will vary State by State. As a starting proposition, the Fair Work Act 2009 (Cth) (FWA) (section130) prohibits injured workers who are receiving compensation from taking or accruing any leave. However, this does not apply if the State or Territory workers’ compensation laws “permit” the taking or accrual of such entitlements. State and Territory workers compensation legislation takes precedence over the FWA.
Before the Anglican Care v NSW Nurses and Midwives’ Association [2015] FCAFC 81 decision (Anglican Care), it was assumed, unless a State or Territory workers’ compensation law expressly permitted the taking and/or accrual of leave entitlements, section 130 FWA would prevent the taking and/or accrual of such entitlements while the worker was receiving worker’s compensation payments. However, the full Federal Court has clarified that the meaning of “permit” does not mean express permission – if a State or Territory’s workers’ compensation law is silent on the issue of taking or accrual of leave entitlements, it is taken to permit the taking and accrual of such entitlements.
This position was strengthened by the Leonard v State of Queensland (Queensland Health) & Anor [2020] QIRC 207 decision. This case involved an employee who ceased work on worker’s compensation following injury. During his absence, his employer stopped accounting for the accrual of his sick and annual leave entitlements. The Queensland Industrial Relations Commission found the employee was entitled to accrue sick and annual leave during his absence, as he was not “absent without pay” – he was in receipt of payments the employer made pursuant to the legal obligation to provide insurance to employees.
| State or Territory | Does annual leave accrue during absence on worker’s compensation? | Does sick leave accrue during absence on worker’s compensation? | Does long service leave accrue during absence on worker’s compensation? | Can you receive worker’s compensation payment at the same time as leave payments? |
|---|---|---|---|---|
| Victoria | Yes | No | Yes |
Yes for annual leave and long service leave due to the operation of ss.174(d) and 185(4) of the Workplace Injury Rehabilitation and Compensation Act 2013. No for sick leave which cannot be taken when on workers compensation. |
| New South Wales | Yes | No | Yes |
Yes for annual leave and long service leave due to the operation of s.49 of the Workers Compensation Act 1987.
Yes for sick leave but only if sick pay is higher than the workers compensation weekly payment. Only the difference between the sick pay and the workers compensation is payable. |
| Queensland | Yes | Yes | Yes | Yes for annual leave, sick leave and long service leave due to the operation of s.119A of the Workers’ Compensation and Rehabilitation Act 2003. |
| South Australia | Yes, but the right to accrue ends if the employer has paid 52 weeks of compensation benefits. S.50(3) Return to Work Act 2014. | Yes. S.50(2) Return to Work Act 2014. | Yes |
Yes for annual leave and long service leave due to the operation of s.50(1) of the Return to Work Act 2014.
No for sick leave which cannot be taken when on workers compensation. |
| Western Australia | Yes | No | Yes |
Yes for annual leave and long service due to the operation of s.80(1) of the Workers’ Compensation and Injury Management Act 1981.
No for sick leave which cannot be taken when on workers compensation due to the operation of s.80(2) of the Workers’ Compensation and Injury Management Act 1981. |
| Tasmania | Yes* | No | Yes* | No for annual leave or long service leave due to the operation of s.84(2) of the Workers Rehabilitation and Compensation Act 1988. |
| Northern Territory | No | No | Yes* |
Yes for annual leave and long service leave.
No for sick leave which cannot be taken when on workers compensation. |
| Australian Capital Territory | Yes | No | Yes |
Yes for annual leave and long service leave due to the operation of s.46 of the Workers Compensation Act 1951. No for sick leave which cannot be taken when on workers compensation. |
* The applicable legislation is silent, therefore, the application of the principle in Anglican Care applies.
Working out leave entitlements while a worker is in receipt of worker’s compensation payments is a challenging task. While the table above provides some general guidance, this issue remains the subject of ongoing litigation, and becomes even more complex if your organisation has an enterprise agreement. Please seek legal advice if faced with this issue.
