Annual Leave & Workcover payments

A common question asked of our clients is whether or not they can accrue annual leave while off work and in receipt of WorkCover payments. Prior to the decision of Anglican Care v NSW Nurses and Midwives Association, we were somewhat left in the dark. The Full Bench of the Federal Court have now provided clarification and appear to benefit workers’ relying on payments of compensation, allowing both the accrual and taking of annual leave during that period of time.

The case concerned an assistant in nursing, Ms Copas, who was employed with the aged care provider, Anglicare. In 2009, Ms Copas sustained an injury in the course of her employment. From the date of her injury, up until the termination of her employment, Ms Copas was certified as unable to work and was in receipt of workers’ compensation. It was upon her termination that Ms Copas realised that she had not been paid any annual leave from the date that her compensation commenced.

Ms Copas’ union contended that by failing to accrue leave in her absence, Anglicare had breached the Fair Work Act 2009. The relevant provision is section 130(1), which stipulates that an employee is unable to take leave if they are absent from work due to an injury or illness when in receipt of WorkCover payments. The important exception to this however can be found in section 130(2). This states that an employee is entitled to leave if it is in fact “permitted” by a compensation law.

Against this background, the Employer argued that because the NSW workers’ compensation legislation did not expressly indicate that employees could take or accrue annual leave when on workers’ compensation, accordingly, they should not be required to pay for it.

The Court disagreed. Instead, the Court held that the reasoning behind section 130(2) was to enable employees absent from work and in receipt of workers’ compensation to simultaneously retain their leave entitlements “as long as that course is sanctioned, condoned, or countenanced by the relevant compensation law”. In this case, because the relevant NSW legislation did not specifically nor clearly state that workers’ compensation recipients could not accrue or take leave, the law was interpreted to have “permitted” workers to do so.

For our Victorian clients, the Court referred to the similarity between the NSW and Victorian law and therefore arguably, this decision is very likely to also be applicable to Victorian workers.

Should you have any queries relating to your leave entitlements when relying on WorkCover, please do not hesitate to contact our solicitors for advice.

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