Can you accrue and take leave while on workers comp?

A perennially common question to WorkplaceOHS relates to the taking and accruing of various forms of paid leave while an employee is absent on workers compensation. Often, the employer would like to take the opportunity to send the employee on paid leave during this time, so as to lower his/her accrued annual leave and long service leave balances.



However, this approach may not be possible in every state and territory depending on the relevant workers compensation legislation and, in the case of long service leave, the relevant long service leave legislation. The Fair Work Act 2009 also restricts the taking and accruing of paid leave during an employee’s absence on workers compensation.


This article explains the legality of taking and accruing paid and unpaid leave during this time.


Taking and/or accruing paid and unpaid leave — Fair Work Act

The Fair Work Act (s130) states that an employee is not entitled to take any paid or unpaid leave (except unpaid parental leave) or accrue any paid or unpaid leave provided under the National Employment Standards (NES) during a period when the employee is absent from work because of personal illness or injury, for which the employee is receiving workers compensation, unless provided otherwise by the relevant Commonwealth, state or territory workers compensation law. The absence does not break an employee’s service with the employer, meaning service prior to and subsequent to the absence on workers compensation is taken into account when calculating an employee’s accrual of leave.


The following paid and unpaid leave entitlements under the NES are affected by s130 of the Act:
– annual leave
– paid personal/carer’s leave
– unpaid carer’s leave
– paid and unpaid compassionate leave
– public holidays
– award-derived long service leave terms (derived from pre-reform federal awards)
– unpaid community service leave
– jury service make-up pay
As mentioned previously, the Fair Work Act (s130(3)) provides that an employee is entitled to take a period of unpaid parental leave during an absence on workers compensation.


Annual leave

Some workers compensation laws refer to the interaction of certain paid leave (eg annual leave, public holidays and long service leave) with payments of workers compensation. The majority of state and territory workers compensation laws do not make any specific provision regarding the accrual or taking of annual leave during an employee’s absence on workers compensation.


Currently, workers compensation legislation in Queensland allows for the accrual AND taking of annual leave during an employee’s absence on workers compensation. See Workers’ Compensation and Rehabilitation Act 2003 (Qld) (s119A).


In Victoria, the relevant workers compensation legislation allows an employee to take annual leave (but not to accrue annual leave) during an absence on workers compensation, operative from 1 January 2010. See the Accident Compensation Act 1985 (Vic) (s97).


Other workers compensation laws — judicial review


The wording of some state workers compensation legislation has created conjecture on this issue.


Example

The Workers’ Compensation Act 1987 (NSW) (s49) provides that a workers compensation benefit continues unaffected if the worker receives any payment, allowance or benefit for holidays, annual or long service leave under any Act, agreement or award (or under the worker’s contract of employment).

This has previously been interpreted by government authorities in that state to mean the NSW workers compensation legislation overrides the Fair Work Act, meaning an employee can take annual leave during an absence on workers compensation.


It has been the view of employers, however, that the NSW workers compensation legislation ‘accommodates’ an entitlement to take paid annual leave, but does not ‘permit’ the taking of annual leave. This means that because the Fair Work Act does not bestow an entitlement to take or accrue annual leave during an absence on workers compensation, the wording of the NSW workers compensation legislation is irrelevant. The relationship between s130 of the Fair Work Act and s49 of the NSW Workers’ Compensation Act has not been determined by the courts, although it should be noted that a matter on this particular issue has been listed to be heard in February 2014 before the Federal Circuit Court.


Similar wording to the NSW legislation exists in the WA workers compensation legislation.


Public holidays

An employer may be unsure regarding payment for any public holiday if they refer to the public holidays provisions in the relevant workers compensation legislation (eg NSW workers compensation legislation). Because of the provisions of the Fair Work Act (s130), an employee who is absent from work and receiving workers compensation is NOT entitled to receive payment for the public holiday, unless otherwise provided by the relevant workers compensation law. At this stage, no state or territory workers compensation law bestows an entitlement to payment for a public holiday that would override the provisions of the Fair Work Act.


Long service leave

Accrual of leave

State and territory long service leave legislation is excluded from the operation of the Fair Work Act (s27). This means the accrual of long service leave during an employee’s absence on workers compensation is dependent on the relevant state or territory legislation. Consequently, the accrual of long service leave during workers compensation may vary depending on the jurisdiction.


Example

Under NSW and Qld legislation, an employee continues to accrue long service leave during an absence on workers compensation; whereas, under Vic legislation, an employee ceases to accrue long service leave when an absence from work exceeds 48 weeks in any year on account of illness or injury. Therefore, you should refer to your state or territory long service leave legislation to establish an employee’s accrual of long service leave during his/her absence on workers compensation.


Taking leave

Most state and territory long service leave statutes do not make specific reference with respect to sending, or the employee requesting, a period of long service leave when an employee is absent on workers compensation.

Under the Long Service Leave Act 1976 (Tas) (s12(2)), an employee is not required to take long service leave during a period of workers compensation.


National Employment Standard

The NES preserves award-derived long service leave terms. These are long service leave terms previously provided under a pre-reform federal award. Such terms were common to federal awards operating in the metal industry, printing industry, food preserving industry, vehicle industry and the meat industry. Because the Fair Work Act (s130) prevents the accruing or taking of any paid (including long service leave under the NES) or unpaid leave (other than unpaid parental leave) that is provided under the NES during an employee’s absence on workers compensation, an employee could not take or accrue long service leave that is an award-derived long service leave term.


This article was originally posted on Workplace OHS a part of NSW Business Chamber – Australian Business Consulting and Solutions has a dedicated team of WHS/OHS experts who can assist you with your specific WHS/OHS issues and problems.

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Zenergy News

By Dean Woods • November 3, 2026
Welcome to Take 5, Zenergy's five-minute scan of what's moving in Australian workplace health and safety, workers compensation, and people and culture. This week: Victoria puts a date and a dollar figure on on-the-spot fines, the Fair Work Commission's generative AI rules take effect, and Safe Work Australia's annual data lands with a confronting headline number. 1. Victoria locks in on-the-spot fines for falls and SWMS breaches From 31 March 2027, WorkSafe Victoria inspectors will be able to issue infringement notices — on-the-spot fines — under the Occupational Health and Safety Amendment (Infringement Offences) Regulations 2026. The confirmed offences: failing to use a control measure for a fall risk (up to $2,091 for a company, $418.20 for an individual), starting high-risk construction work without a Safe Work Method Statement, and failing to keep a SWMS or required fall-risk records readily accessible (up to $1,254.60 for a company). The Victorian Government confirmed the start date and amounts on 21 October. No new duties are created — these are existing obligations. What changes is the speed of enforcement: a breach an inspector once handled with a notice or a long prosecution can now cost money the same day. We unpack what it means, and what the courts are doing in parallel, in this week's deep dive. Also on the radar: Australia's new Workplace Exposure Limits replace the old exposure standards from 1 December 2026 — one month out. If your chemical register and SDS library haven't been checked against the new limits, now is the time (Safe Work Australia). Sources: WorkSafe Victoria — New infringement notices for falls and high-risk construction work offences (worksafe.vic.gov.au/new-infringement-notices-falls-and-high-risk-construction-work-offences); Premier of Victoria media release, 21 October 2026 (premier.vic.gov.au/labor-brings-spot-fines-unsafe-worksites); Safe Work Australia — New workplace exposure limits (WEL) to apply from 1 December 2026 (safeworkaustralia.gov.au). 2. Key dates: Movember and the Australian Workplace Health & Safety Awards Movember runs all month, putting men's health — mental health and suicide prevention, prostate and testicular cancer — on the agenda. It's a natural fit for safety teams in male-dominated industries: 93% of the workers who died at work in 2025 were men (Safe Work Australia). A toolbox talk, a fundraising crew or a wellbeing check-in all count. On the calendar: the 2026 Australian Workplace Health & Safety Awards run 12–13 November in NSW, and AIHS branches host events through the fortnight, including the South Australian Safety Breakfast on 5 November (AIHS events calendar). Sources: Movember (movember.com); AIHS events (aihs.org.au); Safe Work Australia — Key WHS Statistics Australia 2026. 3. People & culture: the Fair Work Commission's generative AI rules are now in force New Fair Work Commission guidance on the use of generative AI in Commission matters took effect on 20 October. Anyone who uses generative AI to help prepare a document lodged in a case must disclose that use — and a person must verify that every fact, case and quote in the document exists and says what it's claimed to say. Asking another AI tool to check doesn't count. The guidance reaches further than many employers expect: an HR adviser representing their own employer falls within the definition of a professional representative. Documents that don't comply can be given less weight, disregarded, or in serious cases see the matter dismissed with costs. If your HR team touches unfair dismissal responses, witness statements or submissions, map where AI is being used and put a verification step in writing (Fair Work Commission; HRD Australia, 20 October 2026). Sources: Fair Work Commission (fwc.gov.au); HRD Australia — Fair Work Commission AI disclosure rules now in force for employers, 20 October 2026 (hcamag.com). 4. Job market pulse: vacancies ease, construction holds The ABS's latest Job Vacancies release (August 2026 quarter, published 1 October) counted 325,000 vacancies nationally, down 0.9% over the quarter and 1.3% over the year. Private sector vacancies fell 2.0% to 286,300 while public sector vacancies rose 7.8% to 38,700 — and construction vacancies held broadly steady at around 20,000. For HSE hiring, that reads as a market that has cooled from its peak but is still competitive for proven safety talent, particularly in construction and infrastructure. Sources: ABS — Job Vacancies, Australia, August 2026 (abs.gov.au); SEEK (seek.com.au). 5. Industry story of the week: 222 lives — Australia's worst year since 2012 Safe Work Australia's Key Work Health and Safety Statistics Australia 2026, released in October, confirms that 222 workers died at work in 2025 — the highest annual toll since 2012 and well above the five-year average of 197. Vehicle incidents accounted for 92 deaths, falls from height 28 and falling objects 21: together, nearly two-thirds of the total. Construction recorded 41 deaths; transport, postal and warehousing the most of any industry at 61. The compensation data tells its own story. Around 147,200 serious claims were lodged in 2024–25, and mental health conditions now account for 17,900 of them — 12.2% of the total, up 169% since 2014–15. A typical mental health claim involves a median 34.8 weeks off work and $68,600 in compensation, roughly five times the time lost of other serious claims. "The data is confronting, but it also tells us where action is needed," said Safe Work Australia CEO Marie Boland. Sources: Safe Work Australia — Key WHS Statistics Australia 2026 (data.safeworkaustralia.gov.au/reports/key-whs-statistics-australia/latest-release) and media release, October 2026 (safeworkaustralia.gov.au). Featured role: Health & Safety Manager - $175,000 + Sydney NSW | Permanent, full time Our client is a large, well-established organisation operating across a diverse range of business functions and operational environments. With a broad workforce and complex risk profile, the organisation is committed to strengthening its health and safety practices, improving consistency and embedding a proactive approach to risk management. Apply via the Zenergy job board —for a confidential conversation call the team on 1300 333 400 Hiring HSE talent, or weighing your own next move? Talk to a Zenergy consultant — 20 years of trusted partnerships across every level of HSE leadership. Visit zenergygroup.com.au.
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