In NTC v Woolston Printing [2025] TASCAT 186, the Tasmanian Civil and Administrative Tribunal (Tribunal) considered whether an employer can suspend weekly workers compensation payments to offset a lump sum payment of accrued annual leave made on termination of employment.
The worker had been continuously certified as incapacitated since making a workers compensation claim in May 2022. He later resigned from his employment and was paid out approximately 16 weeks of accrued annual leave as a lump sum. Following this, the employer’s insurer wrote to the worker advising that he could not receive workers compensation payments and annual leave at the same time, and weekly payments were stopped. The worker applied to the Tribunal for the resumption of weekly payments.
Both parties relied on an earlier decision of the former Workers Rehabilitation and Compensation Tribunal, commonly referred to as the Ausdoc case. In that decision, the Chief Commissioner determined that a lump sum payment of annual leave could be set off against a worker’s entitlement to weekly payments.
In this case, the employer relied on section 84(2) of the Workers Rehabilitation and Compensation Act 1988 (Tas) as the basis for suspending payments. Relevantly, that section provides that a worker is not entitled to weekly compensation payments while taking annual recreational leave or long service leave during a period of incapacity, where that leave is taken in accordance with section 84(1)(b).
Section 84(1)(b) allows a worker and employer, by agreement, to take annual leave during a period of incapacity for which workers compensation is payable. The key issue for the Tribunal was whether the worker had “taken” annual leave in accordance with that provision.
The Tribunal found that he had not. It held that the worker was no longer an employee at the time the annual leave was paid out and, as a result, could not have taken annual leave by agreement with the employer for the purposes of section 84(1)(b). The Tribunal drew a clear distinction between taking annual leave during employment and the payment of accrued leave as a lump sum on termination. Only the former has the effect of suspending an entitlement to weekly compensation payments.
The Tribunal therefore ordered that the worker’s weekly payments be resumed.
The Tribunal’s decision highlights a clear distinction between taking annual leave during employment and the payment of accrued leave on termination, with only the former capable of affecting a worker’s entitlement to weekly compensation payments.
