Does an injured worker have to be back at work to accrue annual leave?

Published: 16 August 2010

Section 40(2) of the Workers Rehabilitation and Compensation Act 1986 makes it clear that when a worker is off work due to their compensable disability their period of absence is counted as a period of service in their employment for the purpose of calculating their entitlement to annual or sick leave.  This means that a worker’s entitlement to annual leave is not interrupted by being off work due to a work injury.  It also means that if a worker is off work for some of their pre-injury hours and working on reduced hours because of their work injury, they are accruing leave at their pre-injury rate.  For example, if a worker was employed pre-injury at 0.6 FTE and due to their work injury is now working 0.4FTE for their pre-injury employer, their annual leave should be accruing on a 0.6FTE pro rata basis just as it was prior to the injury.

 

This general principle is qualified by section 40(3) of the Act which reads, “Where a worker has received weekly payments in respect of total incapacity for work over a period of 52 weeks or more, the liability of the employer to grant annual leave to the worker in respect of a year of employment that coincides with, or ends during the course of, that period shall be deemed to have been satisfied.”  Therefore, a worker is deemed to have taken annual leave for the employment year that coincides with or ends during a period of total incapacity that continues for at least 52 weeks.

 

The qualification of section 40(3) applies in limited circumstances.  Firstly, the worker has to have received weekly payments over a period of 52 weeks or more.  If during that 52 week period of the worker being absent from employment, there were some weeks when the worker was not in receipt of weekly payments (eg, he or she had consented to a discontinuance of weekly payments while off work for family reasons), then section 40(3) would not apply and the worker would be entitled to accrue annual leave for that year. 

 

Secondly, the weekly payments have to have been received in respect of total incapacity for work.  “Total incapacity” is defined under section 3(10) of the Act to be the same as the worker having no current work capacity within the meaning of the Act.  “No current work capacity” is defined to mean that the worker is unable to return to either pre-injury employment or suitable employment.  “Suitable employment” is defined as employment in work for which the worker is suited, whether or not the work is available.  Putting these definitions together leads to the result that if a worker is off work but is fit to work in suitable employment (ie. whether or not that work is available), the weekly payments he or she is receiving are not in respect of a total incapacity and section 40(3) does not apply to the year the worker has had off work.  Consequently, the worker is entitled to accrue annual leave for that year.

 

This is further incentive for employers to be finding and offering suitable employment to a worker who is fit for alternative work.  If the worker is fit for alternative work but is not offered it, the worker could be entitled to his or her normal accrued leave even though they have been absent from work and receiving their usual weekly payments for more than 52 weeks.