“It’s disturbing that an independent statutory authority could be perceived as taking its orders from the employer lobby” … Secretary of Unions NSW Mark Lennon. Photo: Janie Barrett

EMPLOYERS in NSW are set to be advised they no longer have to provide annual leave entitlements to their workers for the time they are off work due to sickness or injury and claiming workers’ compensation.

In a shift that could potentially affect any employee in the state, WorkCover NSW has received legal advice saying the issue is governed by the Commonwealth Fair Work Act, which states workers are not entitled to accrue leave while being paid compensation.

It is a reversal of WorkCover’s previous position, based on the NSW Workers Compensation Act, whereby employers and workers have been advised annual leave and long-service leave continues to be accrued by employees while being paid compensation.

An email sent last Friday, and obtained by the Herald, reveals the change of position, which follows an approach by the employer group the Australian Federation of Employers and Industries.

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The email, written by Cameron Player, a director of WorkCover’s workers compensation insurance division, says a letter to the employers’ group and a brief for the Minister for Finance and Services, Greg Pearce, were being drafted to advise them of the changed position.

It reveals WorkCover’s previous advice to employers and workers was that ”workers on compensation benefits in NSW have long been permitted to accrue holiday and long-service leave”.

This was because ”workers on workers compensation leave are entitled to the ordinary rights and incidentals arising from their employment, on the basis that their ‘contract of employment’ subsists during that time”.

It also stated WorkCover was aware of the discrepancies between state and federal legislation, noting it was ”not aware of any challenge” to the position.

Unions claim the reversal shows NSW employers are emboldened by the government’s recent overhaul of workers compensation that limited to five years payment of medical expenses for all but the most severe injuries and tightened eligibility for journey-to-work claims.

The secretary of Unions NSW, Mark Lennon, said employers were ”receiving signals from the state government that it’s OK to further attack the rights and entitlements of sick and injured workers”. He called on the NSW government to intervene.

”It’s disturbing that an independent statutory authority could be perceived as taking its orders from the employer lobby,” Mr Lennon said.

The chief executive of the employers federation, Garry Brack, said it wrote to WorkCover in May outlining its concerns about the agency’s view of employers’ obligations. He said NSW employers had historically paid leave entitlements to employees off work on compensation because of WorkCover’s advice, which he described as ”flawed”.

The federation’s view was that claiming leave entitlements while also claiming compensation for being off work was ”double dipping”, Mr Brack said.

Mr Pearce confirmed WorkCover was ”looking into the issue of accrued annual leave and workers compensation payments” but insisted ”no determination has been made as yet”.