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In a recent decision, the Federal Court of Australia has confirmed that the answer is yes for employees in Western Australia, joining the majority of Australian states in which this question has been settled.

injured worker seeks annual leave

Mr Touhey suffered an injury while working as a carpenter for his employer. As a result of the injury, he was absent from work for almost a year and received workers’ compensation payments during this period. At the end of his employment, Mr Touhey claimed he was entitled to 154.5 hours ($5,407) of annual leave accrued over the period he was absent from employment receiving workers’ compensation payments. His employer denied liability for such entitlement.

court holds that worker entitled annual leave

Mr Touhey was entitled to accrue annual leave in accordance with the Fair Work Act 2009 (Cth) (FW Act). Section 130 of the FW Act only allows employees to take or accrue leave while they are absent receiving workers’ compensation if it is “permitted” by the relevant workers’ compensation law.

The Court held that the applicable legislation in WA, the Workers Compensation and Injury Management Act 1981 (WA), permits leave to be accrued while workers are absent receiving compensation. Accordingly, the Court found that the employer contravened the FW Act by failing to pay its employee his accrued but untaken annual leave.

position in other states and territories

Decisions of the Fair Work Commission and Federal Court of Australia have already confirmed the same position in the majority of Australian states. In NSW, Qld, Tas, SA, Vic and WA, annual leave entitlements will continue to accrue as usual while an employee is receiving workers’ compensation payments under state laws.

The reasoning applied makes it very likely that if tested, this outcome will be the same in other states and territories – that is, if the relevant workers’ compensation legislation does not expressly prohibit the taking or accrual of leave, and so “permits” it.

lessons for employers

Employers must understand and lawfully manage the leave entitlements of their employees, which may be impacted by various state and federal laws. This can be especially complicated for businesses employing workers across different states and territories, and even within one state, the interaction between state and federal laws is not necessarily straight forward. Non-compliance with the FW Act can result in significant penalties for employers, on top of the time and resources expended when dealing with such claims.

Macpherson Kelley’s Employment Safety and Migration team can help you get on the front foot to ensure compliance with all leave obligations. Please contact one of our team to assist.

stay up to date with our news & insights

do workers accrue leave while receiving workers compensation payments?

11 April 2022
barney adams laura croce

In a recent decision, the Federal Court of Australia has confirmed that the answer is yes for employees in Western Australia, joining the majority of Australian states in which this question has been settled.

injured worker seeks annual leave

Mr Touhey suffered an injury while working as a carpenter for his employer. As a result of the injury, he was absent from work for almost a year and received workers’ compensation payments during this period. At the end of his employment, Mr Touhey claimed he was entitled to 154.5 hours ($5,407) of annual leave accrued over the period he was absent from employment receiving workers’ compensation payments. His employer denied liability for such entitlement.

court holds that worker entitled annual leave

Mr Touhey was entitled to accrue annual leave in accordance with the Fair Work Act 2009 (Cth) (FW Act). Section 130 of the FW Act only allows employees to take or accrue leave while they are absent receiving workers’ compensation if it is “permitted” by the relevant workers’ compensation law.

The Court held that the applicable legislation in WA, the Workers Compensation and Injury Management Act 1981 (WA), permits leave to be accrued while workers are absent receiving compensation. Accordingly, the Court found that the employer contravened the FW Act by failing to pay its employee his accrued but untaken annual leave.

position in other states and territories

Decisions of the Fair Work Commission and Federal Court of Australia have already confirmed the same position in the majority of Australian states. In NSW, Qld, Tas, SA, Vic and WA, annual leave entitlements will continue to accrue as usual while an employee is receiving workers’ compensation payments under state laws.

The reasoning applied makes it very likely that if tested, this outcome will be the same in other states and territories – that is, if the relevant workers’ compensation legislation does not expressly prohibit the taking or accrual of leave, and so “permits” it.

lessons for employers

Employers must understand and lawfully manage the leave entitlements of their employees, which may be impacted by various state and federal laws. This can be especially complicated for businesses employing workers across different states and territories, and even within one state, the interaction between state and federal laws is not necessarily straight forward. Non-compliance with the FW Act can result in significant penalties for employers, on top of the time and resources expended when dealing with such claims.

Macpherson Kelley’s Employment Safety and Migration team can help you get on the front foot to ensure compliance with all leave obligations. Please contact one of our team to assist.