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Published: 06 July 2018
Author: Ashleigh Kemp

Annual leave now accrues while on WorkCover payments

Injured workers have recently gained the additional financial protection of being able to accrue annual leave while on WorkCover.

Two cases heard by the Fair Work Commission in September 2017 (Australian Nursing and Midwifery Federation v Alfred Health and United Firefighters Union of Australia v Emergency Services Telecommunications Authority T/A ESTA) mean that injured workers who are receiving weekly payments, now accrue annual leave entitlements while they are on weekly payments.

Each State and Territory is different as Worker’s Compensation law is state-based. State laws are trumped by Commonwealth Law. Fair Work legislation is Commonwealth and therefore overrides the Victorian Workplace Injury Rehabilitation and Compensation Act 2013 and its predecessor legislation.

Previously it was unclear if Victorian workers being paid weekly payments accrued annual leave entitlements, and each case was different depending on the employers EBA or employment contract.

In Australian Nursing and Midwifery Federation v Alfred Health the Fair Work Commission held that if a worker is still employed and on payments, they are still performing a “service” (Paragraph 54) and unless an EBA or Agreement specifically excludes it, annual leave accrues (Paragraph 68-69).

Following this decision, the Fair Work Ombudsmanreviewed its position on whether or not injured workers on weekly payments accrued annual leave, as the position in Victoria was different depending upon an employer’s EBA or employment contract.

On 21 May 2018, the Fair Work Ombudsman updated their advice website, to reflect their position - that injured workers in Victoria who remain employed and on weekly payments, will accrue annual leave as if they were working normally.

This change brings Victoria (and Tasmania) into line with NSW, QLD, and WA.

Am I eligible?

There are 3 criteria you must meet in order to be eligible:

  1. Have an accepted WorkCover claim;
  2. Be on weekly payments (or partial weekly payment top up if you have a limited work capacity);
  3. Are still employed.

How can I access my annual leave?

If you are unable to work (or work to your full pre-injury capacity), you should ask your employer to provide you with a calculation of your annual leave entitlements, and confirmation that you are accruing these in each pay cycle you are paid weekly payments.

Should your employer dispute that you are entitled to accrued annual leave, you should seek legal advice.

Injured workers often find their employer refuses to pay them their annual leave entitlements whilst on WorkCover. In fact, an employer can only refuse a request for annual leave, if it is reasonable to refuse the request. 

If your employer has refused to allow you to take annual leave, you should seek legal advice.

It is also worth noting that you can receive weekly payments of compensation at the same time as annual leave payments.

What does this mean for me?

The change means that injured workers will have an extra financial protection should the WorkCover Insurer terminate their weekly payments. Many workers suffer extreme financial hardship while fighting for their payments to be reinstated, as they have already used up their annual leave entitlements. Now, if your weekly payments are terminated, you will have the security of being able to access the annual leave that accrued whilst you were unable to work and receiving weekly payments.

This new level of protection will also mean that if a worker’s payments stop because they reach retirement age, or have a work capacity after 130 weeks, they will be able to access accrued annual leave entitlements as a weekly payment, or a lump sum if their employment ends.

Other issues

The Victorian WorkCover Authority is yet to release a statement regarding this change, and the claims manual (used by insurers to assist in claims management), has not been updated:

WorkSafe and agents should not advise employers whether a worker is entitled to the payment or accrual of leave. Agents should advise employers and workers to refer to the appropriate employment agreement and/or the Fair Work Act 2009 (Cth).

It is not clear if this change will be applied retrospectively.

Categories: WorkCover, Legislation