The National Employment Standards (NES) specify that an employee is not entitled to take or accrue any leave if the employee is absent on workers compensation, unless the accrual is permitted by the relevant workers compensation legislation. All States and Territories have their own workers compensation laws, so an employer’s obligations can depend on where the employee works.

Until recently, the general consensus has been that if the relevant workers compensation provisions don’t expressly allow accrual of leave, it doesn’t need to be accrued. A case in New South Wales (NSW) appears to have clarified that – at least for some employees in Australia – leave does need to be accrued for workers who are absent due to workers compensation.

The case was Anglican Care v NSW Nurses and Midwives Association. Ms Copas (represented by the NSW Nurses and Midwives Association) had worked for Anglican Care for some years. She suffered a workplace injury, and was receiving workers compensation as a result. Her employment continued for some time while she was off work. Her Association argued that she was entitled to accrue annual leave while absent on workers compensation. The Federal Court agreed.

Although the NSW workers compensation laws do not create an express right to accrue annual leave, a beneficial construction of the relevant legislation was adopted. This was because “A liberal approach to statutory interpretation is appropriate when dealing with legislation aimed at protecting the safety of workers and providing for compensation for injured workers.”

While this decision is about a claim in a NSW court, it is likely to be relevant across the country(except for sole traders and partnerships in Western Australia). Employers should consider the impact of this decision on their own business, and potentially accrue annual leave and personal/carer’s leave for employees on workers compensation. In Queensland, the legislation already expressly permits employees to take or accrue leave while they are on workers compensation.

Confusion about this issue has been rife since 2009, when the NES first became law. This question was considered by the Fair Work Review Panel in 2012, and during a report on the first three years of the Labor government’s industrial relations changes.

The report, titled ‘Towards more productive and equitable workplaces: An evaluation of the Fair Work legislation’, recommended that the unclear section be removed from the Fair Work Act 2009.

The basis for the recommendation was that the section was poorly worded, caused a great deal of confusion, and increased employer’s costs, especially if they needed to get legal advice to clarify obligations. The Panel felt that it was anomalous that people could accrue leave in two jurisdictions (Queensland and the Commonwealth), but not anywhere else.

Even they believed that leave did not accrue under these circumstances in other jurisdictions.

Removing the section would be to prevent any employee in Australia from accruing leave while they are absent on workers compensation.

Even though the Coalition took government from Labor in 2013, they have since chosen to implement some of the recommendations from the Fair Work Review, including this recommendation about removing leave accrual while someone is absent from employment premises while on workers compensation.

The Fair Work Amendment Bill 2014 was introduced into the House of Representatives in February 2014, and it took six months for it to get to the Senate, where it has been languishing ever since.

In August this year, the Bill would have been waiting patiently for a year! I guess it’s a case of ‘watch this space’.


On another note, the Australian Federal Government announced in the 2015 Budget that from 1 July 2015, anyone who claims a tax deduction for use of their own vehicle for work purposes using the cents per kilometre method will now only be able to claim a flat rate of 66 cents per kilometre. Previously, the Australian Tax Office (ATO) had a sliding scale of deductions based on the capacity of the vehicle’s engine.

Compare this to the requirement in many modern awards that an employer pays an employee an allowance of 78 cents per kilometre, should the employee use his or her own vehicle for work.

That allowance is not changing.

The announcement in the Budget was about simplifying the method of claiming a tax deduction for work use of a private vehicle. The modern award allowance is an enforceable entitlement for any employee covered by the relevant award.

So, for example, if you need your Accounts Receivable Clerk to use their private vehicle to go to the bank to deposit cheques for your business, then you would still be required to pay them 78 cents per kilometre in accordance with the Clerks – Private Sector Award 2010. Unless you have agreed with them in writing that a component of over-award salary is for allowances, but that’s a topic we covered last year!


Emma Watt is an independent industrial relations consultant with almost 20 years’ experience in the timber industry.

Phone: 0411 708 073 or Email: