Managing people

Understanding casual employee workers compensation legislation in NSW

Here’s what employers should know about the Workers’ Compensation Act 1987.

Under the Workers Compensation Act 1987, employers legally must provide workers compensation to employees who are injured in the workplace. Workers compensation is in place so that employees can have the right access to first aid and rehabilitation to help them return to work, as well as compensation to ensure they don’t suffer financial hardship as a result of a work-related injury.

Workers compensation covers a broad range of ‘workers’, including casual employees. With over two million casual employees across Australia, it’s important to be aware of the worker's compensation legislation in NSW, as well as your obligations as an employer. 

Workers compensation in Australia: a quick overview

Workers compensation covers any physical or mental health injuries that occur while an employee is at work. As well as any diseases they may have contracted while employed with an organisation or any aggravations or recurrences of an existing condition that was brought about as a result of work. 

Employees may also be able to lodge a workers compensation claim if they're injured on the way to or from work, although workers compensation legislation in Queensland or workers compensation in Western Australia may be different.

Workers compensation generally covers weekly payments for an employee, and medical costs they may have to bear as a result of their work-related injury. However, each state also has additional rules and guidelines for workers compensation benefits. The State Insurance Regulatory Authority (SIRA) New South Wales releases an updated benefits guide every April and October with details on what an employee can claim, and the maximum payment they're entitled to receive. 

As an employer, it's important to keep in mind that workers compensation can also apply to any injuries that occur if an employee is travelling for work or if they're participating in a workplace leisure activity, such as a team-building exercise or office party. In most cases, workers compensation will apply regardless of whether an employee breached company policy or didn't act in line with company procedures.

Workers compensation and casual employees

While many employers think workers compensation only applies to permanent employees, the worker's compensation definition of employee is far broader and extends to casual employees, seasonal employees, pieceworkers, commission-based workers, and working directors. Some contractors and subcontractors may also be covered by workers compensation.

When it comes to casual employees, the biggest challenges for employers is the amount of compensation that should be given to the employee. Because casual employees don't work fixed hours, the amount of workers compensation will generally be calculated based on the average number of weekly hours they've worked over the past 12 months (or since they started their employment if it's less than 12 months). 

As an employer, it's also crucial to keep in mind that if you dismiss a casual employee while they are receiving workers compensation, this could be classed as unfair dismissal and put you and your organisation at legal risk. If you're looking to dismiss a casual employee while they're receiving workers compensation, it's best to contact SIRA for more information.

Lastly, keep in mind that as an employer, you're required by law to take out workers compensation insurance in NSW with an authorised insurer. This will help ensure your organisation is protected financially and whether you need to pay workers compensation to an employee, whether they're casual or permanent staff.

Workers compensation can be challenging to navigate, particularly when it comes to casual employees. It's best to seek legal advice to ensure you're compliant with workplace legislation.

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