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Does annual leave accrue during workers’ compensation?

The Case

NSW Nurses and Midwives’ Association v Anglican Care (2015)

This case examined whether a NSW nurse who was on workers’ compensation was also entitled to have annual leave accrue during this period.

The Verdict

The Court held that annual leave did accrue during the period of workers’ compensation.

Section 130 of the Fair Work Act 2009 (Cth) (FW Act) provides that employees are not entitled to take or accrue paid or unpaid leave if they are absent from work and receiving compensation for an illness or injury, except if permitted by a State or federal compensation law.

Under section 49 of the Workers Compensation Act 1987 (NSW), a worker is entitled to compensation in addition to receiving “any payment, allowance or benefit for holidays, annual holidays or long service leave”.

As such, section 49 allows for a NSW employee to accrue annual leave while on workers’ compensation.

The Lesson

Employers in NSW must continue to accrue annual leave for employees on workers’ compensation.

The effect of this decision will be reversed if the Australian Government’s Fair Work Amendment Bill 2014 is passed. If the Bill is passed, annual leave will not accrue while an employee is absent from work and in receipt of workers‘ compensation.

Legislation in all jurisdictions except NSW, Queensland and Victoria is silent on whether employees can take or accrue annual leave while on workers’ compensation. In these cases, the FW Act applies.

Queensland legislation allows employees to take and accrue annual leave while absent on workers’ compensation. In Victoria, employees can take annual leave while absent on workers’ compensation, but do not accrue it.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.

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