In Western Australia, employees continue to accrue annual leave while they are on workers compensation, because the compensation period is treated as ordinary paid employment for leave entitlements. The Industrial Relations Act and the WA Workers' Compensation Act both require that leave accrues at the standard rate of 4 weeks per year (or 5 weeks for shiftworkers) during the compensation period.
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Legal basis for accrual
The WA Workers' Compensation Act states that compensation payments replace ordinary wages but do not alter other employment conditions, including leave accrual. The Industrial Relations Act reinforces this by mandating that any period of paid leave, including workers compensation, counts as service for the purpose of calculating annual leave.
How accrual is calculated
Annual leave is calculated on the basis of ordinary hours worked, not on the actual receipt of wages. While on workers compensation, the employee's ordinary hours are deemed to continue, so the standard accrual of 0.0769 days per ordinary workday (or 4 weeks per year) applies. Shiftworkers accrue at the higher rate of 5 weeks per year.
Employer obligations
Employers must record the compensation period in the employee's leave ledger and ensure that accrued leave is available when the employee returns to work or when they choose to take it. Failure to record accrual correctly can result in penalties under the Fair Work Act.
Impact on leave balances
When the employee returns, any accrued annual leave can be taken as normal, or it may be paid out if the employment ends. The accrued leave is not reduced by the workers compensation payments themselves.
Key points summary
- Annual leave continues to accrue during workers compensation.
- Accrual follows the standard rate: 4 weeks per year (5 weeks for shiftworkers).
- Employers must record and honour the accrued leave.
- Leave can be taken or cashed out after the compensation period.