Should You Lodge a Worker’s Compensation Claim or Use Accrued Sick Leave?

When you have suffered a workplace injury, whether it was your fault or not, and need to take time off from your employment, you can feel guilt or obligation when submitting a leave form. Your manager and other stakeholders might even pressure you to use your accrued sick leave instead of submitting a workers' compensation claim.

While sick leave (also known as personal leave) and workers’ compensation claims can be used to compensate you for any loss of wages, the level of support offered is drastically disparate. Trying to do ‘right’ by your employer, even if the accident initially seems minor, can have long-term implications on your finances, health, job security and future entitlements. These consequences not only pose a risk to yourself but also to your family and any dependents you may be responsible for.

No matter how overwhelming it may feel to navigate a workers' compensation claim, advocating for yourself is key. To provide greater clarity, we have set out the legal protections available to all employees who are unable to work by reason of an injury. We also outline your legal rights and examine the potential risks should you not pursue a claim and use your sick leave instead.

Key Difference Between Workers Compensation and Sick Leave 

The choice to use either your sick leave entitlements or make a workers' compensation claim can have long-term financial and legal implications. Understanding the differences between these options is crucial to making an informed decision.

Workers compensation 

Workers’ compensation is a form of insurance coverage that provides financial, medical and other forms of support to employees who suffer an injury or illness in the workplace while carrying out activities as part of their role. It is designed to offer coverage for the most immediate effects of a workplace injury and remediate future costs incurred.

Lodging a workers’ compensation claim is more beneficial than using sick leave, as it not only grants access to rehabilitation and return-to-work programs to support your transition back into the workplace but also provides legal protection against retaliation, protection that would not be available if you opted to take extensive personal leave.

Personal Leave 

Personal leave, otherwise known as sick leave, entitles a worker to a set number of days off from work if they are either injured and unwell or need to care for a dependent, all of which may make them unable to carry out their employment duties. It accommodates any misadventure that did not occur in the workplace. 

While personal leave replaces your full income, it is only available for the balance of time you have accumulated leave. In NSW, full-time employees are entitled to 10 days of personal leave per year, while part-time staff accumulate time on a pro-rata basis calculated on the basis of the hours worked. If you are a casual employee, you are not entitled to take any paid personal leave. Unlike a workers' compensation claim, personal leave offers no coverage for short or long-term medical expenses or loss of income.

Should I use sick leave or workers compensation? 

Workplace Injuries: Why A Workers Compensation Claim is Best vs Sick Leave

1. Save your sick days for when you need them

If the injury occurred at work, you should not need to use your sick leave for something out of your control. Your sick leave is limited, it is better to save it for a rainy day, whether you are ill, have been injured outside of work, need to care for dependents or need to address other non-work-related health issues.

2. Covers medical expenses and rehabilitation costs

Workers’ compensation covers medical treatment expenses, including physiotherapy, surgery, rehabilitation, medicine and other costs required for your care. Sick leave does not accommodate your medical expenses at all.

3. Provides ongoing wage replacement beyond sick leave limits

Work injury compensation will also cover you for the majority of the wages whilst you are incapacitated for work. Depending on your employment, the type of payment that you receive, and the duration that your claim covers, workers compensation benefits are calculated at 95% of your ordinary weekly wage for the first 13 weeks of absence and up to 85% of your wage from the 14th week and thereafter.

Depending on the type of payment, it can be valid for a maximum of 130 weeks (2.5 years) or 260 weeks (5 years) unless the worker has been assessed as having suffered a permanent impairment greater than 20%. In those circumstances, workers' compensation benefits can be paid for the balance of the workers’ anticipated employment. Your sick leave is limited to your accrued balance and will run out quickly.

4. You receive provisional payments until your claim is investigated and approved

Once you have been rendered unable to work and until your employer’s workers compensation insurer can investigate your claim, you can receive payments for up to 12 weeks and a maximum of $10,000 until it determines its liability for your claim. Again, sick leave only provides wage replacement while you have an accrued balance.

5. Offers protection for long-term or permanent injuries

For any claims submitted after 19 June 2012, you can also claim a lump sum payment if you have suffered an 11% or greater permanent impairment by reason of the workplace injury. It is also available to claim a lump sum payment for workers who have suffered a 15% or greater whole-person impairment for a primary psychological injury. These benefits are not available if you choose to take sick leave and not bring a workers' compensation claim.

6. Legal protections against employer retaliation

Under NSW and Australian law, namely the Fair Work Act 2009 (Cth) and Workers Compensation Act 1987 (NSW), employers cannot dismiss or discriminate against workers who make a valid workers compensation claim, whereas using sick leave does not offer the same level of legal protection and may leave you exposed.

7. Workers compensation is a right, not a burden on personal entitlements

Workers compensation is an insurance scheme, the premiums for which are paid by the employer, while sick leave comes from your personal leave entitlements, which you have earned.

8. Access to workplace rehabilitation and return-to-work programs

Workplace injury claims provide support programs to help you recover and transition back to work, including limiting your working hours and the duties you are responsible for. Sick leave does not entail any additional benefits or support.

9. Employers cannot force you to use sick leave instead of lodging a claim

Australian and NSW employment laws, such as the Fair Work Act 2009 (Cth), Workers Compensation Act 1987 and Workplace Injury Management and Workers Compensation Act 1998, protect employees from being required to use sick leave for work-related injuries. If an employer insists that you do, it is time to consult a workplace injury lawyer.

Employee Rights: Potential Risks of Using Sick Leave Instead of Work Injury Compensation

Deciding whether to use sick leave or lodge a workers' compensation claim is not just a moral choice. It can also pose significant legal ramifications. Employees who use their accrued sick leave instead of making a compensation claim may unknowingly forfeit valuable entitlements and protections under workplace injury laws.

You Could Over-Use Your Leave Balance

Personal leave does not provide care for medical treatment, and using your accrued balance potentially means that you lose out twice. In the event that you are injured or fall ill outside of work but have no sick leave entitlements remaining, you may be forced to take unpaid leave or to take the leave from your accrued annual leave entitlements.

Risk disputing your claim

One of the more concerning and unforeseen risks of wrongly taking sick leave is that if an injury worsens over time and a claim is then needed, the delay will provide an opportunity for the employer to dispute the claim. This makes it harder to establish that the original workplace incident caused the injury or disability from which you now suffer and prejudices your ability to recover compensation or damages in the future.

Protection from employer disputes

Workers compensation laws in NSW and across Australia provide a scheme that affords greater legal protection to an employee than sick leave. Employers cannot dismiss or discriminate against an employee for making a legitimate workers' compensation claim, nor can they influence the employee to make a sick leave claim instead.

You have a limited time to claim workers' compensation

Many people ask, “How long do I have to lodge a workers’ compensation claim in Australia?” and instead assume they can submit a claim for benefits at any time. Delaying or avoiding making a claim can risk your ability to recover workers' compensation benefits. There are time limits for lodging a claim. In NSW, workers generally have six months from the date of the accident or when the symptoms of the injuries began. For a work injury damages claim, but where an employer is sued for negligence for more serious injuries, a claim must be brought within three years of the date of injury.

By understanding these legal considerations, employees can make informed decisions safeguarding their financial well-being and job security.

Do Not Settle After a Workplace Injury — Consult Brydens Lawyers

As a leading law firm in NSW covering all types of employment matters and workers’ compensation claims, amongst other areas of law, Brydens Lawyers knows how challenging it can be to advocate for your rights and ensure your physical and financial health is protected.

If you feel pressured and forced to take sick leave in lieu of a workers' compensation claim, our employment and workers’ compensation lawyers are experienced in protecting your rights. Our expert team of lawyers will work hard to ensure that you receive the maximum compensation to which you are entitled.

If you are uncertain as to whether you have a workers’ compensation claim or if there is a dispute with respect to your entitlements, contact Brydens Lawyers for legal advice for all workplace injuries. Our 50 years of experience ensures that you are awarded every form of support to enable you to focus on your recovery and well-being.