Employment Dispute Series: Part 4D – Handling Ill or Injured Employees – Accrual of Leave whilst absent due to illness or injury

Posted by Malcolm Campbell on 27 February 2019
Employment Dispute Series: Part 4D – Handling Ill or Injured Employees – Accrual of Leave whilst absent due to illness or injury

Another complex issue that arises from leave due to injury or illness is when or if additional leave entitlements are accrued during the period of absence from work.

Whilst ensuring you take appropriate steps to understand the reasons for the leave, as outlined in previous posts, knowing your obligations according to state or federal legislation is important in protecting your business against future claims by the employee.

Accrual of Leave

A question that commonly arises in relation to employees who have been absent for a lengthy period of time due to illness or injury is the accrual of leave entitlements.

Again, the first issue which needs to be assessed is whether or not the employee's injury is covered by the Workers Compensation legislation or not.

Regard also needs to be had to the type of leave in question and whether it arises from state or federal legislation.

Generally for employees in New South Wales any leave entitlements accrued under the Fair Work Act continue to accrue during a period of absence where the employee is receiving workers compensation benefits.

However, if the employee in question is absent due to a non-workers compensation related illness/injury there are 2 possible scenarios as to the accrual of leave.

  • If the employee in question is using some of their accrued entitlements (personal/carer's leave, annual leave or long service leave) then they continue to accrue their entitlements in the ordinary course.
  • If the employee is on unpaid personal/carer's leave and they have otherwise run out of accrued paid leave, they will be taking what is generically known as leave without pay (LWOP).

This means that a period of LWOP will not count as service for the purposes of accruing annual leave, personal/carer’s leave or calculating redundancy pay that is based on years of continuous service with the employer.

However, just to complicate things, because Long Service Leave (LSL) is not governed by the Act different rules apply for the accrual of LSL. In accordance with Section 4(11)(a1)(ii) of the Long Service Leave Act 1955 (NSW),  if the absence is due to an illness/injury (irrespective of whether it is subject to workers compensation legislation) the period of absence is still counted towards service for the purpose of accruing LSL.

So far in our Employment Disputes Series we’ve covered The Role of Policies & Procedures, Workplace Investigation Best Practice, When Does Performance Management Amount to BullyingHandling Ill or Injured Employees – Workplace Injuries, Handling Ill or Injured Employees – Non-Workplace Injuries.

If you have concerns about your current leave policies, need help creating new policies and procedures or if you need advice regarding an employee complaint, please contact us and we can provide you with advice tailored to your specific situation.