How will the new Workers’ Compensation Act impact your leave? Everything you need to know

Risk Matters - Winter 2024

Picture of Donata Ostrowska

Donata Ostrowska

Employee Relations Consultant, WALGA
Donata Ostrowska is an Employee Relations Consultant at WALGA. She has been with WALGA since December 2022 and has tertiary qualifications in law and arts. Prior to WALGA, Donata gained experience providing advocacy and advice in the union movement and managing the office operations of a member of parliament.

What do the changes to Western Australia’s workers’ compensation legislation mean for local governments’ obligations with respect to leave accruals?

The Workers Compensation and Injury Management Act 2023 commenced on 1 July 2024. It replaced the 1981 Act, with all provisions rewritten, worded in plain English and renumbered in accordance with modern drafting principles.

Among the changes to Western Australia’s (WA) workers’ compensation scheme, the new Act addresses and clarifies leave accruals during periods of workers’ compensation. It is important that local governments understand these changes and adjust their payroll systems accordingly (if required), to comply with their legal obligations.

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What happens to an employee’s annual leave, sick leave, and long service leave when they are on workers’ compensation?

Under the previous Act, personal leave did not accrue during periods of absence on workers’ compensation, while long service leave only accrued up to three months each calendar year. The question of whether annual leave accrues depends on the terms of the relevant award or agreement which applies to a local government.

This changes in the new Act

The new Act, however, states that annual leave, long service leave and sick leave will accrue while an employee receives, or is entitled to receive, workers’ compensation. This change ensures that leave accrual obligations for employers are consistent across WA and in line with most other jurisdictions.

The new Act provides at section 61(2)(d):

“For any period for which a worker is entitled to receive income compensation…the worker accrues entitlements to annual leave, long service leave and sick leave that the worker would have accrued if the worker had not been entitled to receive income compensation for that period.”

Local governments need to review their payroll processes and make any necessary changes to ensure that from 1 July 2024 annual leave, long service leave and sick (personal) leave continue to accrue with respect to employees on workers’ compensation.

Can an employee take leave while receiving workers’ compensation payments?

There is no change to an employee’s ability to access leave at the same time as receiving workers’ compensation payments. The new Act clearly outlines, at section 61(2)(a), that an employee will be able to take annual leave or long service leave while entitled to receive income compensation.

The Act specifies that taking annual leave or long service leave during a period of workers’ compensation, does not affect an employee’s entitlement to income compensation payments, or the amount of those payments (see section 61(2)(b)). Therefore, the entitlement to leave, and entitlement to workers’ compensation payments, are separate and concurrent.

What about personal leave?

Under the new Act, employees will continue to accrue personal leave while receiving workers’ compensation. However, an employee will not be entitled to take sick leave at the same time as receiving income compensation.

If an injured employee takes sick leave, and subsequently becomes entitled to income compensation for that period of incapacity, the amount paid to them as sick leave is taken to have been paid as (or towards) income compensation, and the period of sick leave must be reinstated.

WALGA Employee Relations Service

Western Australia Local Government Association (WALGA) Employee Relations provides comprehensive human resource management and industrial relations support to local government members. This includes regularly providing advice on leave entitlements and legislative updates to local governments who subscribe to the service.

For more information, please visit the WALGA website: https://walga.asn.au/our-services/subscription-services/employee-relations.

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Welcome to the Winter edition of 2024! As we wrap up the financial year, we’d like to take this opportunity to thank you for your continued support. We’re pleased to share that we’ve had a complete renewal with an outstanding 100% retention of our membership.

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