Five employment law cases that shook the world: No #3 Annual leave and workers comp accruals
As part of a series of articles we are examining five employment law cases that shook the world (or at least members of the Australian HR community).
Section 130 of the Fair Work Act 2009 (“restriction on taking or accruing leave or absence while receiving workers’ compensation”) includes the following:
“(1) An employee is not entitled to take or accrue any leave or absence (whether paid or unpaid) under this Part during a period (a compensation period) when the employee is absent from work because of a personal illness, or a personal injury, for which the employee is receiving compensation payable under a law (a compensation law ) of the Commonwealth, a State or a Territory that is about workers’ compensation.
(2) Subsection (1) does not prevent an employee from taking or accruing leave during a compensation period if the taking or accruing of the leave is permitted by a compensation law.”
On the face of it the operation of section 130 is relatively clear: an employee cannot take or accrue leave whilst off work and receiving workers’ compensation unless this is permitted under State / Territory workers compensation law.
The difficulty in the past – at least in NSW – was that it wasn’t clear from the terms of the Workers Compensation Act 1987 (NSW) whether it did permit an employee receiving workers compensation to take and accrue annual leave or not.
Section 49 of the NSW Act states as follows:
“Weekly compensation payable despite holiday pay etc
(1) Compensation is payable under this Division to a worker in respect of any period of incapacity for work even though the worker has received or is entitled to receive in respect of the period any payment, allowance or benefit for holidays, annual holidays or long service leave under any Act (Commonwealth or State), award or industrial agreement under any such Act or contract of employment.
(2) The amount of compensation so payable is the amount which would have been payable to the worker had the worker not received or been entitled to receive in respect of the period any such payment, allowance or benefit.”
On appeal in Anglican Care v NSW Nurses and Midwives’ Association  FCAFC 81, the point being considered was a technical one, namely whether for section 130(2) of the Fair Work Act 2009 to be engaged (and the taking/accruing of annual leave to be allowed) the NSW Act had to actually confer an entitlement to take or accrue annual leave. Or, as had been decided by the primary judge, it was sufficient for the NSW Act just to allow for the dual receipt of annual leave and workers compensation.
Bromberg and Katzmann JJ decided that the broader interpretation of the phrase “permitted by a compensation law” was to be preferred:
“…s 49 of the WC Act did not create an entitlement to accrue leave. But s 130 of the FW Act does not require that the source of the entitlement be found in the compensation law in order for an employee to be able to enjoy the benefit of both compensation and leave over the same period. The purpose and effect of s 130 is to remove the entitlement to take or accrue leave for employees in receipt of workers compensation unless there is a law relating to compensation in the relevant jurisdiction which countenances the simultaneous receipt of workers compensation while the employee is absent from work. Section 49 of the WC Act is such a law.”
The case is therefore authority for the proposition that an employee in receipt of workers compensation in NSW is also entitled to take and accrue annual leave.
The decision was subsequently followed in respect of Victorian workers compensation legislation in Australian Nursing and Midwifery Federation v Alfred Health  FWCFB 4420.