Injured employees receiving workers' compensation will find it easier to claim unfair dismissal, based on a decision in an appeals case brought forward by a major labour hire business.
In WorkPac Pty Ltd v Bambach -  FWAFB 3206 - 31 May 2012 it was found that injured employees receiving work-related compensation payments can now count the time they spend recovering at home towards meeting their minimum employment period of six to 12 months after injury, during which they are protected from unfair dismissal.
In the full bench decision, the arbitrator rejected an appeal by major labour hire business WorkPac, finding that the company had erred in saying a former employee was ineligible for an unfair dismissal claim because he had failed to meet the relevant period of “continuous service” after he was injured at work. But FWA ruled that the act grants protection to workers from unfair dismissal when they are off work on workers' compensation for six months for large employers and 12 months for smaller operators.
The employee, Michael Bambuch, had started work in early March 2010, and was injured and unable to perform his duties from 2 June that year until to 23 September, 2011 – a period of more than 14 months in total. After he was deemed fit to resume his pre-injury duties, the employee received notification of the cessation of his employment from WorkPac on 17 October, effective from 24 September.
Employer groups have voiced their outage over the FWA decision, and have warned that it will have major consequences for employers. The Australian Industry Group (Ai Group) noted that unpaid absences were not normally counted towards “continuous service” even when individuals were receiving entitlement under other schemes, including workers compensation. “[The] decision of a Full Bench of Fair Work Australia in the WorkPac case is disappointing but employers now have more clarity about the current meaning of “continuous service” under the Fair Work Act,” Innes Willox, CEO of Ai Group said.
Ai Group added that the case centred around the meaning of the term “unpaid authorised absence” in section 22(2) of the Fair Work Act. “Unpaid authorised absences are not generally counted as continuous service. The Full Bench has decided that because workers' compensation payments are made "pursuant to a legal obligation upon the employer" a workers' compensation absence must be treated as a paid absence for the purposes of the definition of continuous service in section 22 of the Fair Work Act,” Willox said.
Ai Group has now sought changes to the definition of “continuous service” in the Fair Work Act Review.