Maternity Leave and Workers Compensation A PAPER BY MARY KAREKOS DECEMBER 2008
Maternity Leave and Workers Compensation
Summary Maternity leave does not come within the parameters of Section 49 and Section 50 of the Act, which specifically allow for the payment of annual, long service leave and public holidays and/or sickness leave. To reduce any workers compensation payments for maternity leave while incapacitated for employment, the Employer must show that the employee has received a dual benefit in accordance with Section 46 of the Act. The basic principle is that the mere fact of being pregnant does not disentitle a worker to payment of weekly compensation, but it is a factor to be taken into account in the award of any payment of compensation.
Who Does This Impact? Workers Compensation insurers, self insurers and Employers.
What Action Should Be Taken? The employer and insurers should keep channels of communication open between them to ensure that there are no dual benefits paid in these circumstances.
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Commonly Asked Questions
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Maternity Leave and Workers Compensation by Mary Karekos
Maternity Leave The leading case in this area is the decision of His Honour, Judge Neilson in Hirst v Illawarra Area Health Service (2001) 21 NSWCCR 82. In that case, the worker was working 5 days per fortnight. The worker alleged that she was totally incapacitated for employment. The issues were the worker’s capacity for employment and her entitlement to payment of weekly compensation pursuant to Section 40 of the Act during the period of maternity leave. The following steps were applied in awarding partial incapacity during the periods of maternity leave (at 35): 1. The worker’s probable earnings but for the injury were discerned. 2. The worker’s ability to earn during the periods in which she took maternity leave were calculated by averaging the figures before and after each period to give a mathematical difference. Although the mathematical difference would support an award at the maximum rate, it was held that an award in the circumstances should be ‘fairly fairly nominal’ (at 35). Ultimately Neilson J awarded the worker $10 per week for her period of maternity leave because this figure appeared to be ‘the appropriate award in the exercise of discretion when the applicant was on maternity leave’ (at 36).
Commonly Asked Questions 1. Is the injured worker entitled to weekly benefits during Maternity leave? •
Pregnancy and subsequent motherhood do not in themselves disentitle a worker to compensation for partial incapacity. See: Myer Sydney Ltd v Buckley [1980] 54 WCR (NSW) 319.
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This principle was applied in Hirst v Illawarra Area Health Service (2001) 21 NSWCCR 82, but with the rider that maternity leave should be taken into account when exercising the discretion under Section 40(1) on the basis that a conscious decision to take maternity leave was inconsistent with the worker’s employment.
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In exercising the discretion regard must also be had to the principle in Kesen v Luke Singer Pty Ltd (1989) 5 NSWCCR 298 which held that in exercising that discretion there must be an award, even though the amount be nominal. It is impermissible to award nothing.
2. Is there a difference in entitlement when the injured worker is on paid as opposed to unpaid maternity leave? •
Case law dealing with maternity leave and weekly benefits compensation have not drawn a distinction between unpaid and/or paid maternity leave.
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A worker could continue to be employed without carrying out any work duties and without being paid. The significant factor attributed to being employed was that a worker continues to accrue benefits as an employee. See: Harvey Galvin v Patrick Operations Pty Ltd (WCC 11389 -04).
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Maternity Leave and Workers Compensation by Mary Karekos
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Arguably, if the worker is on paid maternity leave, the Employer must show that the employee has received a dual benefit in accordance with Section 46 of the Act. The Commission may, on the determination of an application for any weekly payment of compensation or on a review under this Act of any weekly payment of compensation, order that the weekly payment be reduced to prevent dual benefits of the same kind being payable by the employer during and in respect of the incapacity for work.
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If the worker is on unpaid maternity leave, then the principles in Hirst and Wrigley v Holland [2002] NSWCA 109 (2 May 2002) would apply if the worker was partially incapacitated for employment.
3. Does the entitlement to payments of weekly compensation during maternity leave extend to both total and partial incapacity? •
The potential entitlement to payment of weekly compensation during maternity leave extends to both total and partial incapacity.
4. Partial Incapacity – Is an insurer required to apply a Section 40 Benefit or is suspension of benefits under Sections 48 & 57 of the WIM Act permissible? (on the basis that that an injured worker is not complying with an IMP) •
Benefits should not be suspended purely on the basis that the worker has taken maternity leave. It is analogous to the circumstance where an injured worker takes annual leave. Regard must be had to the reasonableness or otherwise of the worker’s actions. Clearly, the injured worker would not be entitled to payments pursuant to Section 38 of the Act and any payments would be assessed pursuant to Section 40 of the Act.
5. Total Incapacity - Is an insurer required to apply a Section 40 Benefit or is suspension of benefits under Sections 48 & 57 of the WIM Act permissible? •
If total incapacity is in issue, it must be assessed with regard to the available evidence to ascertain whether it is in fact a matter where section 40 can be applied. Suspension of benefits in the above circumstance is not recommended.
6. Can the decision in Hirst be applied to allow $10 pw in all maternity claims? •
Whilst in many instances the sum of $10 per week is likely to be an appropriate figure, Hirst does not provide that the $10 sum be awarded as a blanket figure to cover all maternity leave claims.
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In Tracey McDonald v Director General of Education & Training (WCC 14543 – 2004) it was determined that the worker was entitled to weekly benefits under section 40 at the rate equivalent to one days’ pay during her period of maternity leave.
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More recently in Suzanne Gibson v Coles Supermarkets Pty Limited (WCC 5936 – 2007), WCC determined on 5 August 2008 that during the Applicant’s period of maternity leave she was entitled to an award of $50 per week under section 40.
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In short, the exercise of discretion with respect to the amount of weekly compensation payable pursuant to Section 40 during maternity leave is to be determined on the facts of each particular case. The above noted cases serve to illustrate that there is no hard and fast rule that will apply in determining how the discretion will be exercised.
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Maternity Leave and Workers Compensation by Mary Karekos
For more information, please contact:
Mary Karekos Partner T: 02 8257 5731 mary.karekos@turkslegal.com.au
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