Workers compensation and employment entitlements

Over the past few weeks we have received numerous questions from injured workers about how being absent from work on workcover affects annual leave, long service leave, rostering accrued days off and… dismissal. We have done our research and tried to capture the main issues affecting a contract of employment when an injured worker is absent on workers compensation.

Workers compensation and employment issues

An injured worker’s absence on workcover can create a number of different issues for the injured worker as well as for the employer.

Over the months we have received numerous questions from injured workers regarding the issue. Examples of the questions we have received include whether injured workers can be sacked,  how accrual of leave entitlements work,  how long service leave is affected, etc.

 1.Dismissal

A prohibition on the dismissal of an injured worker who is absent on workers compensation is provided by Commonwealth legislation, as well as most state workers compensation laws.

Injured or ill workers are protected by several pieces of  legislation, including Federal unfair dismissal legislation, state/territory workers compensation legislation, state/territory anti-discrimination legislation, and federal disability discrimination legislation… (also see our article WorkCover and termination of employment – overview)

Dismissal under the Fair Work Act

Under r3.01 of the Fair Work Regulations 2009 an employee’s absence is not a temporary absence if it extends for more than 3 months, or a total of 3 months in a twelve-month period, exclusive of any absence on paid personal/carer’s leave. An employee dismissed within 3 months of an absence on workers compensation could apply for a general protections (unlawful termination) order from Fair Work Australia, which is similar to a claim of unfair dismissal.

Workcover legislation

In addition to the prohibition to termination under the Fair Work Act, there are prohibitions from termination of employment undermost relevant state or territory workers compensation / workcover laws. For example:

NSW-legislation

Under Part 8 of the NSW Workers Compensation Act 1987, (the OLD act) it is an offence if an injured employee is dismissed by the employer, within 6 months of incapacity, solely or principally because the employee is not fit for employment in a position as a result of an injury that entitles the employee to workers compensation. This applies to all employees in NSW, including a worker covered under a modern award or enterprise agreement. [Fr updates on the recently passed new law in NSW click here]

Very similar prohibitions to terminating an injured worker while absent on workcover also apply under workers compensation legislation in most other states and territories, although the period from dismissal varies depending on the jurisdiction. For example, in Victoria it is 12 months (from the date of the injury).

Real example of an employer’s question to terminate an injured worker:

Q  We have an employee in our NSW premises who suffered a work-related injury some two months ago, and is currently totally incapacitated and on workcover. The injured worker has been assessed by our insurer as possibly being able to return to light duties in three months. The injured worker has been employed by us for less than 12 months and we wish to terminate his employment. The general protections provisions under the Fair Work Act 2009 refer to a temporary absence due to illness or injury as being a period of less than three months. Does this mean the company can now proceed with the termination as soon as the injured worker’s absence goes beyond three months?

A  The employer should be careful when terminating an employee, particularly where the absence is due to illness or injury.

Legislation cited

Apart from the general protection from dismissal under the Fair Work Act when an employee is absent due to  personal illness or injury, protection from dismissal when the absence is covered by workers compensation is usually provided by the relevant state or territory workers compensation legislation.

In addition, the Fair Work Act also provides a general protection from dismissal on the grounds of unlawful discrimination, such as an employee’s ‘physical impairment’.

Other protections may also apply under discrimination laws, which generally provide that a failure by the employer to make reasonable adjustments or accommodate the employee’s particular circumstance can found a claim for unlawful discrimination.

New South Wales and other jurisdictions

In the case of workers compensation law in New South Wales, s248 of the NSW Workers Compensation Act 1987 prohibits the dismissal of an employee absent on workers compensation during the first 6 months of such absence , and where the dismissal was because the injured worker was not fit  for employment because of the injury. An employer who employs a person to replace the dismissed employee within two years after dismissal, is guilty of an offence unless the employer first informs the replacement employee that the dismissed employee may be entitled to be reinstated to carry out work for which the person is to be employed.

Similar restrictions on the dismissal of an employee within a specified period of time exist under most workers compensation statutes throughout Australia.

Then goal of the various workers compensation statutes is to allow enough time for an injured worker to be rehabilitated. Dismissal is viewed as an action that can affect the employee’s rehabilitation from a work-related injury or illness.

The operation of occupational health and safety obligations should also be considered.

2. Accruing leave

According to s130(1) of the Fair Work Act a worker is not entitled to take or accrue any leave or absence (whether paid or unpaid) under the National Employment Standard during a period when the worker is absent from work due to personal illness, or a personal injury, for which the workeris receiving payments under a Commonwealth, a state or a territory workcover law.

An injured worker however may take or accrue leave during a period of workers compensation if permitted by the relevant workers compensation law.

An example of a law permitting this is the Victorian  Accident Compensation Act 1985.

Under s130(3) of the Fair Work Act, an employee is permitted to take unpaid parental leave while absent on workcover.

Note: Australian Nurses Federation submission to Fair Work 2012

Accrual of leave while receiving workers compensation

The ANF considers that an employee should be able to take or accrue leave during a period when they are absent from work because of a personal illness or injury for which they are receiving workers’ compensation. Currently section 130 of the Fair Work Act prohibits the taking or accrual of leave unless it is allowed by the relevant workers’ compensation legislation, which is generally silent on the issue.

The ANF considers, firstly, that the appropriate place to deal with leave issues is in industrial, not workers’ compensation, legislation (where leave issues are likely to be overlooked). Secondly, employees should accrue leave while on workers’ compensation: but for the work‐related injury, the employee would have been accruing leave (including, generally, if the employee had been on other types of leave). Thirdly, the provision appears to have reversed the corresponding provision in the Workplace Relations Act and for unclear reasons. Section 237 of the WR Act had the effect that accrual rules in that Act applied unless workers’ compensation laws specified that leave could not accrue or be taken. … See ANF submission to Fair Work (2012)

3. Public Holidays

Under section s 130(1) of the Fair Work Act a public holiday would be seen as a ‘paid absence’, therefore, the injured worker would not be able to ‘take’ any public holiday provided under the National Employment Standard  (NES) that falls during a period of absence on workers compensation, unless otherwise allowed by the relevant state or territory workers compensation law.

4. Long service leave

The accrual of long service leave during an injured worker’s absence on workcover is  determined by the relevant state or territory long service leave legislation.

The accrual of long service leave during an absence on workers compensation can vary depending on the jurisdiction (i.e. the state you are in).

Example

NSW and Queensland legislation provides that a worker continues to accrue long service leave during an absence on workers compensation, whereas, Victorian legislation provides that an employee ceases to accrue long service leave when an absence from work exceeds 48 weeks in any year on account of personal illness or injury.

Reference should be made to the relevant state or territory long service leave law (or award provision where applicable) to determine whether an injured worker continues to accrue long service leave during an absence on workers compensation.

5.Rostered days off, accrued day off

Many modern awards provide for an hour of work arrangement whereby an employee can accrue credits that allow a paid rostered day off (RDO) (aka accrued day off (ADO) every four weeks.  This is quite common for nurses.

The worker will accrue a credit (0.4 hour) for each day they work ordinary hours in excess of the daily average.

The modern award will usually include workcover as an absence that does accrue a credit towards the worker’s RDO.

This means an injured worker absent on workcover is deemed by the modern award to have worked for the purpose of accruing an entitlement to a paid RDO.

(Reference should also be made to the applicable industrial award to determine entitlement – check with your union.)

An overview of the relevant workcover legislation can be found under our workcover FAQ page, or under our “resources”.

[post entered by T on behalf of WCV]

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