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Thursday 23rd July 2015
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Did this case just change your
worker’s compensation policy?
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In today's Health & Safety Bulletin:
- How a Federal Court clarified the rules around workers’ comp and leave
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Dear Reader,
Workers’ compensation is hard yakka for everyone.
For a worker, recovering from an injury involves a regimen of recovery, strength and confidence-building, and patience. |
For a business that’s determined to do it right, a worker’s injury and absence involves significant admin from the get-go. Hands up who enjoys waiting on hold, hoping to talk to a living, breathing person at their insurer’s end?
There’s also the implementation of effective and meaningful return to work programs to think about. And the balance between appropriately meeting your essential business needs during a worker’s absence, and complying with your obligations to hold a position open.
Once in the while, another grenade will be lobbed into the process. For example, it’s safe to say that not every Australian employer is letting an injured employee accrue leave at the same time they’re receiving workers’ compensation.
The reason for that is an ambiguously-worded part of the Fair Work Act that leaves the matter of accrued leave and workers’ compensation up to State and Territory laws. Employers aren’t conning their workers, or anyone else – it’s a matter of the law being unclear.
That’s changing with the case Health & Safety Handbook Editor-in-Chief Michael Selinger writes to you about below.
A Federal Court has made a major decision about NSW workers’ compensation law for the first time – and it’s likely to have ramifications in other States and Territories, many of which have similarly-drafted workers’ comp laws.
Workplace Bulletin readers may have seen me mention the decision in a round-up a month ago, but Michael believes it’s important that the changes are signalled far and wide.
Employers will need to look at their practice and procedure when injured workers are absent on workers’ compensation, and determine whether they should be allowing annual leave to accrue.
By the by, the Fair Work Amendment Bill that’s presently stranded in the Senate would remove the ability to accrue annual leave on workers’ compensation across all States and Territories. But don’t set your watch to expect progress on that legislation any time soon.
You need to make sure you’re not facing a looming liability in the here and now!
Take care,
Joseph Nunweek
Editor,Health & Safety Bulletin
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Federal Court clarifies the rules
around workers’ comp and leave
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 | Dear Reader,
There is often confusion among businesses as to whether they have to accrue leave for an employee when they are absent from work and receiving workers’ compensation. |
This confusion stems from section 130(2) of the Fair Work Act which prevents leave being accrued or taken unless it is “permitted” by a State or Territory workers’ compensation law.
With Anglican Care v NSW Nurses and Midwives’ Association [2015] FCAFC 81, the Federal Court of Australia confirmed that section 49 of the Workers Compensation Act 1987 (NSW) “permitted” an employee to take and accrue leave - while the employee was absent and receiving workers’ compensation.
The background facts
Lynette Copas was employed by Anglican Care in the role of an assistant nurse from February 2007 to May 2011. In December 2009, in the course of her employment, Ms Copas sustained an injury which rendered her unable to work.
Ms Copas was unable to work from December 2009 through to the termination of her employment in May 2011. Whilst absent, she was in receipt of weekly payments of workers compensation.
On termination of Ms Copas’ employment with Anglican Care, she was only paid an amount in respect of accrued and untaken annual leave for the first two weeks that she was absent from work.
Ms Copas then commenced proceedings seeking payment for annual leave for the year and a half balance of her employment.
The initial decision
At first instance, the Federal Circuit Court held that Ms Copas was entitled to accrue annual leave whilst absent from work and obtaining workers’ compensation.
Judge Emmett interpreted the NSW workers’ compensation law in a way that was favourable to the applicant. He decided that because section 49 of the Workers’ Compensation Act did not expresslyprevent dual receipt of workers’ compensation and annual leave, it “allows” or “permits” the receipt of both.
Her Honour found that Anglican Care had contravened s 44(1) of the FW Act through failing to pay Ms Copas her untaken accrued annual leave upon the termination of her employment.
Anglican Care appealed the decision on the basis that ‘the primary judge misconstrued the relevant legislation’ and ‘erred in finding that an employee is “permitted by” s 49 of the Workers Compensation Act to accrue annual leave’.
The decision on appeal
The key question for the Federal Court to consider was the construction of section 130 of the Fair Work Act, and how it interacted with section 49 of the Workers Compensation Act.
After looking at earlier forms of the legislation, the Federal Court found that ‘the purpose of s 130(2) is to enable employees who are absent from work and in recept of compensation to retain their entitlements to leave over the same period as long as that course is sanctioned, condoned or countenanced by the relevant compensation law’.
This did not mean that the relevant compensation law had to expressly say “workers can accrue annual leave and get workers’ compensation at the same time”. It was enough that it didn’t say anything to forbid or prevent it from happening.
For Ms Copas’ purposes, the relevant compensation law did not forbid the receipt of both workers’ compensation and accrued leave. As a result she was entitled to the accrued leave upon the termination of her employment with Anglican Care.
Lessons for employers
The case demonstrates not only the complexity of this area of liability for employers, but also the issues that need to be considered by an employer when dealing with a worker who has been on a significant period of workers’ compensation.
Aside from ensuring a worker receives all the entitlements they are due when employment ends, the question of at what point a worker’s employment can or should be terminated is a challenging one.
In order to master your obligations, and get it right, remember to check out the Workers’ Compensation (W1) chapter of yourHealth & Safety Handbook.
Warm regards,
Michael Selinger
Editor–in–Chief
Health & Safety Handbook
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