Many people are unaware of their obligations whilst employees are on Workers Compensation. Does an employee accrue leave entitlements and superannuation when on workers compensation?

What is workers compensation?

Workers’ compensation is a type of insurance that can pay the wages and medical costs of employees who have been injured as a result of their work duties.

Under Australian law, employers must have insurance to cover their workers in case they get sick or injured because of work. 

Each state and territory manage their own workers’ compensation arrangements and regulations vary from state to state. Let’s break it down:

QLD

In QLD, employees are entitled to take and accrue annual leave, sick leave and long service leave during the period to which the compensation relates.

NSW

In NSW, employees are entitled to take and accrue annual leave. They are not entitled to accrue sick leave, but they can take sick leave during workers compensation. If the payment for sick leave is higher, payment is the difference between the sick leave payment and workers compensation.

ACT

In ACT, employees are entitled to accumulate annual leave during workers compensation if the employee would have otherwise been entitled to the accumulation had they not been on workers compensation. Employees can take annual leave on workers compensation. Sick leave does not accrue on workers compensation and employees cannot take sick leave on workers compensation.

VIC

In VIC, employees are entitled to take and accrue annual leave whilst on workers compensation. They are not entitled to accrue or take sick leave on workers compensation.

SA

In SA, employees are entitled to take and accrue annual leave whilst on workers compensation. They are entitled to accrue sick leave, but not entitled to take sick leave on workers compensation.

TAS

In TAS, employees are entitled to take and accrue annual leave whilst on workers compensation. Employees won’t get paid for workers compensation at the same time they’re being paid for annual leave. Employees cannot take or accrue sick leave on workers compensation.

WA

In WA, employees are entitled to take and accrue annual leave on workers compensation. Sick leave does not accumulate, and employees cannot take sick leave on workers compensation.

NT

Annual leave and sick leave does not accumulate on workers compensation. Employees cannot take annual leave and sick leave on workers compensation.

Norfolk Island

Annual leave and sick leave does not accumulate on workers compensation. Employees cannot take annual leave and sick leave on workers compensation.

Is Superannuation payable while on workers compensation?

Typically, employees on compensation leave aren’t entitled to superannuation payments. This is because workers’ compensation aims to replace lost income and handle medical expenses, which superannuation isn’t meant for. However, there are exceptions. If covered by a modern award or enterprise agreement, superannuation might still be payable. Many modern awards stipulate that superannuation must be paid during work-related illness absences while remaining employed. It’s essential to check your specific modern award for clarity. Exceptions do exist, such as:

Modern Awards: Some specify superannuation payment during workers’ compensation leave, like the Building and Construction Industry Award 2020. Other examples include the Manufacturing Award, Hospitality Award, and Cleaning Industry Award.

Enterprise Agreements: Certain agreements, such as the Retail Industry in New South Wales, mandate superannuation payment during workers’ compensation leave.

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