Weekly compensation when a worker’s employment ends
Key Points
- A worker’s entitlement to compensation does not automatically end if the worker’s employment ends, for example if the worker is lawfully dismissed or is on stand down.
- Insurers have obligations to pay compensation and provide rehabilitation and return to work opportunities to workers whose employment ends while they have an open workers’ compensation claim.
- Insurers can review a worker’s entitlement regularly and may decrease, increase, suspend or terminate their compensation, but must do so in accordance with their obligations and responsibilities under workers’ compensation laws.
As an insurer, you have obligations to injured workers whose employment ends while they have an open statutory workers’ compensation claim. Examples of when a worker’s employment ends include the worker being stood down, dismissed or if their employer’s business closes.
You have the flexibility to review compensation entitlements of injured workers on a regular basis. The Workers’ Compensation and Rehabilitation Act 2003 (the Act) specifies when and how you can stop weekly compensation payments.
A worker’s compensation entitlements do not automatically end if their employment ends. Weekly compensation can be increased or decreased according to the worker’s level of incapacity and their entitlement can only be terminated or suspended in accordance with the Act. Until this time, you must continue to meet your obligations to pay entitlements and provide rehabilitation.
Non-compliance with workers’ compensation laws is taken seriously and may result in appropriate compliance and enforcement action being taken.
This guide provides you with information to assist your decision-making on the payment of weekly compensation when a worker’s employment ends.
A worker cannot receive more than if the injury had not been sustained (Section 147)
A worker should not receive more weekly compensation than they would have received from their employment if they hadn’t sustained a work-related injury.
Workers’ entitlements are not just measured by what the worker would have received had the injury not occurred but also what the worker would have received if the injury had not occurred and the worker were at work.
This means workers continue to receive compensation when:
- their employer’s business is being wound up
- their employer must close temporarily due to a pandemic
- part of the business’s operations change or end and all employees are made redundant.
You cannot use this provision to reduce, terminate or suspend a worker’s weekly compensation when the worker has been dismissed or is on stand down1.
A worker’s entitlement for partial incapacity (Section 162)
If a worker is not employed during a period of partial incapacity, loss of earnings is to be calculated using an amount that the worker may be reasonably expected to receive having regard to the worker’s incapacity and availability of employment.
You must consider the labour market more generally, rather than just the worker’s current position. Availability of employment includes:
- vacancies within the employer (its related bodies corporate or classification group), or
- with other employers reasonably accessible from the worker’s local area.
Insurer’s responsibility for worker’s rehabilitation (Section 220)
You must take practicable steps to secure the rehabilitation and early return to suitable duties of workers who have an entitlement to compensation. This duty cannot be avoided and continues beyond an injured worker’s employment ending.
This may require you to arrange appropriate, meaningful host employment opportunities or suitable retraining and return to work programs.
A worker must participate in rehabilitation (Section 232)
If a worker fails or refuses to participate in rehabilitation without a reasonable excuse, you may suspend the worker’s entitlement to compensation until the worker satisfactorily participates in rehabilitation.
An injured worker whose employment ends may not be reasonably able to comply with this obligation. For example, if the employer has dismissed the worker and is refusing to provide host employment for the purposes of rehabilitation, then the worker has a reasonable excuse for not participating in rehabilitation. In this circumstance, you must comply with your obligation to arrange alternate rehabilitation for the worker.
1 Recent Queensland Industrial Relations Commission and Queensland Industrial Court decisions at available the following links: https://www.sclqld.org.au/caselaw/QIRC/2019/120; https://www.sclqld.org.au/caselaw/ICQ/2020/10
For more information
Contact Workers’ Compensation Regulatory Services on 1300 362 128.