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OHS Alert reported earlier this month that a full Federal Court has confirmed that the Fair Work Act does not block injured NSW workers from accruing leave while they're receiving incapacity payments.

In December 2009, an Anglican Care nursing assistant was injured in the course of her employment in NSW and received weekly workers' compensation payments until she was dismissed in May 2011.

Anglican Care then paid her about $1900 in annual leave she accrued prior to her injury, but her union – the NSW Nurses and Midwives' Association – convinced Federal Circuit Court Judge Sylvia Emmet that she was entitled to a further $3000 in annual leave accrued while she was injured.

Judge Emmet heard that under s130(1) of the Fair Work Act 2009, employees aren't entitled to take or accrue leave if they are absent from work and receiving workers' compensation unless, (according to s130(2)), it is "permitted" by the relevant compensation law. Under s49 of the NSW Workers Compensation Act 1987 they are entitled.

Anglican Care appealed the decision, however the bench found there was no indication the legislation’s intention was to deny access to entitlements.

"After all, compensation laws create or confer rights to compensation," Justices Bromberg and Katzmann said in a joint judgment.

Justice Jessup agreed, and noted that the Court was justified in resolving any "obscurity" around the meaning of the Fair Work Act s130 in a way "which would not amount to a significant alteration in rights and obligations. The employer's claims, if successful, would make such an alteration by reducing the entitlements employees previously had under the Workplace Relations Act", he said.

For more information about this case go to Anglican Care v NSW Nurses and Midwives' Association [2015] FCAFC 81 (5 June 2015).

Lessons for us?

At Actevate we hear that this is a contentious issue for many employers who view it as "double dipping" in some cases. However, this judgement now removes the ambiguity in the legislation between the Fair Work Act 2009 and NSW Workers Compensation Act 1987.

Whether we see this as fair or not, it’s the law and we have to work within it. We know that the biggest cost to your workers compensation premium is wage loss. This decision means that there are even more wage costs accruing whilst someone is unfit for work. You will be required to keep accounting for the accrued leave entitlements and pay these out should an injured worker cease employment with you. For some businesses this can be a significant hit to the bottom line.

Best practice tells us that the sooner you can get someone back to work whether in a modified capacity; full time/part time or back in their pre injury capacity leads to better outcomes and significant costs savings on your premium and better health outcomes for injured workers.

Please contact us to help you with managing your claims costs by calling us on 1300 669 552 or email us at info@actevate.com.au.