End to annual leave accrual during workers’ compo?

by Human Capital26 Jul 2012

It’s a complete 180 degree turnaround: WorkCover NSW has received legal advice indicating that employers are not legally obligated under the Fair Work Act to allocate annual leave and long-service leave entitlements to employees who are off work on compensation.

In an email obtained by the Sydney Morning Herald, which was written by a director of WorkCover's workers’ compensation insurance division, Cameron Player, it was revealed that the compensation authority is considering its position following legal advice. At this stage, it appears that the issue does not fall within the jurisdiction of the NSW Workers Compensation Act, and instead falls under the federal Fair Work Act which crucially, does not state workers are entitled to accrue leave while being paid compensation.

It’s a shift which could potentially affect every employer in the state and is contrary to WorkCover’s previous position which expressly stated workers were entitled to continue their leave accrual whilst receiving workers compensation benefits.

According to the Herald, the email says a letter is being prepared which will brief employer groups and the Minister for Finance and Services, Greg Pearce, advising them of the changed position.

It also stated WorkCover was aware of the differences between state and federal law on the matter, and noted that it was not aware of any proposed challenge which would align the two pieces of legislation.

The chief executive of the employer’s federation, Garry Brack, said it wrote to WorkCover in May outlining its concerns about the agency's view of employers' obligations. Brack said NSW employers have being paying leave entitlements to employees off work on compensation based on WorkCover's advice, which he described as “flawed”.

The view of the employer group was that claiming leave entitlements while also claiming compensation for being off work was “double dipping”, Brack said.

WorkCover confirmed to the Herald that is was “looking into the issue of accrued annual leave and workers’ compensation payments” but insisted “no determination has been made as yet”.


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  • by Maureen 26/07/2012 2:30:28 PM

    In relation to Annual Leave not accruing - this is something The Association for Payroll Specialists wrote to NSW WorkCover about when the Fair Work Act commenced disagreeing with advice it was giving to clients. It is sad it has taken NSW WorkCover over 2 years to find this out for themselves.
    However in NSW the LSL act says that LSL accrues when absent due to illness and injury and The Associationfor Payroll Specialists believes that this includes periods of absence on WorkCover.

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