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Can workers accrue leave while absent on workers' compensation?

Q: Can workers accrue or be paid leave while getting workers’ compensation? Our company is based in NSW.

A: Whether an employee who is absent from work and receiving Workers’ Compensation is also entitled to accrue or take and receive payments for leave varies depending on the relevant jurisdiction’s Workers’ Compensation legislation.

Section 130 of the Fair Work Act 2009 provides that an employee is not entitled to take or accrue any leave if the employee is absent from work because of illness or injury for which they are receiving Workers’ Compensation payments under a Commonwealth, State or Territory law (Compensation Period), unless permitted by that law to take or accrue any leave during the Compensation Period.

The relevant provision in NSW is s 49 of the Workers Compensation Act 1987, which does not expressly permit an employee to take or accrue leave during a Compensation Period. However, it does allow employees to continue to receive payments of weekly compensation, without deduction, during periods where workers are also entitled to
receive paid annual leave.

The Federal Court decision of Anglican Care v NSW Nurses and Midwives’ Association (2015) clarified the position with the view that Workers' Compensation legislation ‘permit’ an entitlement if they do not expressly prevent or prohibit it. As a result of the decision, NSW employees are entitled to accrue or be paid annual leave (and potentially
other leave entitlements) while receiving Workers’ Compensation benefits if the employee is still employed.

Please note: The answer is correct at the time of publishing. Be aware that laws may change over time. Refer to Workers' compensation for current advice.

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