Redundancy while on Workers Compensation NSW

Injured worker leaving the office after being made redundant with belongings inside box

Being made redundant while on workers compensation can be a very stressful and overwhelming time for injured workers. While an employer has a legal obligation to provide suitable work duties for injured workers, redundancy may lead to loss of income and potential financial hardship for the employee. By the end of this article, you should have a solid understanding on:

  • What is a redundancy and how it’s different to termination
  • Legalities around being made redundant while on workers compensation
  • Your Workers Compensation entitlements when made redundant
  • What other options you have after being made redundant

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What is redundancy?

Redundancy is a term used to describe a situation where an employee’s job is no longer required by the employer. It occurs when there is a genuine operational or business need to reduce the workforce. Being made redundant can have significant implications for injured workers who are already on workers compensation.

It can result in loss of income and increased financial strain, particularly if the worker is unable to find suitable alternative employment due to their restricted physical capabilities. In such cases, it is important for the worker to understand their rights and options, and to seek legal advice if necessary.

Injured worker made redundant and leaving the office with belongings in box.

A redundancy can be involuntary or voluntary

Involuntary redundancy occurs when an employer terminates an employee’s position due to operational reasons or restructuring. This is typically beyond the worker’s control and can have significant impacts on their compensation benefits.

In some cases, the worker may be entitled to redundancy payments under their employment contract or enterprise agreement. However, these payments can potentially affect their ongoing workers compensation entitlements, including weekly payments and medical treatment expenses.

On the other hand, voluntary redundancy is when an employee chooses to leave their job in exchange for a redundancy payment. The worker themselves makes this decision which can also have implications for their compensation benefits.

Depending on the circumstances, voluntarily leaving employment while on workers compensation may result in the loss of weekly compensation payments, medical expenses coverage, and other entitlements. Workers should carefully consider their personal circumstances and consult legal advice before making any decisions regarding voluntary redundancy.

Difference between Redundancy and Termination

Redundancy and termination are two terms often used in employment situations, but they have distinct differences. Redundancy occurs when a job is no longer required by the employer due to organizational reasons, such as a downturn in production, business relocation, or internal restructuring.

In other words, the position itself is no longer necessary for the company’s operations. On the other hand, termination refers to being dismissed or let go from a role, usually due to reasons related to the employee’s performance, behaviour, or breach of contract.

Is it legal to be made redundant while on Workers Compensation?

It is illegal for employers to dismiss injured employees while on workers compensation within the 6 month protective period pursuant to Section 248 of the Workers Compensation Act 1987. If the employers fail to meet their obligations within this period then they are liable for monetary penalties.

After the statutory 6-month protective period employers still have obligations that they need to comply with. For example, if a worker is unable to return to their pre-injury duties, the employer must develop an injury management plan. This plan includes providing suitable work duties that accommodate the worker’s restrictions and limitations, with the aim of facilitating their gradual return to work.

Do my workers compensation benefits continue if I’ve been made redundant?

Workers compensation benefits do continue even if an employee has been made redundant.

When an injured worker is made redundant while on workers compensation, their entitlements do not automatically cease. The employer is still responsible for providing suitable duties and compensation benefits. Redundancy is not a valid reason to terminate these benefits or disregard the worker’s rights.

Entitlements that continue include:

  • Weekly payments under workers compensation
  • Medical and Rehabilitation expenses
  • Lump sum compensation for permanent impairment

For more information regarding your entitlements, visit our Workers Compensation Payout Guide NSW.

Can I claim workers compensation after being made redundant?

It is still possible for injured workers to claim workers compensation even after being made redundant. It’s important to make this claim as early as you can.

In NSW, Workers Compensation Claims should be made within 6 months of the work injury occurring. But in some circumstances claims can be lodged up to 3 years later. For more information on the claims process, visit our Workers Compensation Claims guide.

Options for reinstatement after redundancy while on worker’s compensation

Employees who have been made redundant based on the fact they were unable to work due to their work injury, then they may be able to apply for reinstatement to their previous position. Here are the steps you can take to explore the options for reinstatement:

1. Seek legal advice: It’s important to consult with a union representative or employment lawyer who can guide you through the process and provide you with the necessary information about your rights and entitlements.

2. Obtain a Certificate of Capacity: Before applying for reinstatement, you will need to obtain a Certificate of Capacity from your treating doctor. This certificate should certify your fitness to return to your previous duties or suitable alternative duties.

3. Apply for reinstatement: Once you have the necessary documentation and advice, you can lodge a claim for reinstatement. This involves submitting a written application to your employer, outlining your request for reinstatement and any supporting evidence you have, such as your certificate of capacity.

4. Apply for a reinstatement order: If your employer refuses to reinstate you, you can escalate the matter by applying for a reinstatement order through the Industrial Relations Commission (IRC). The IRC will assess your case and determine whether reinstatement is appropriate.

What other legal options do I have if I was made redundant?

What other legal options do I have if I have been made redundant while on workers compensation in NSW?

In the unfortunate event that you have been made redundant while on workers compensation in NSW, there are legal options available to help protect your rights and ensure you receive the compensation you are entitled to. Here are some other options to consider:

1. Negligence and Public Liability: If your injury was caused by the negligence of your employer or occurred at a different company’s premises, you may have grounds to pursue a claim for negligence or public liability.

2. Unfair Dismissal: If you believe your redundancy was unfair or in breach of your employment rights, you may be eligible to file for unfair dismissal. This option can provide recourse if the termination was not in line with the relevant legislation or your employment contract.

3. Prior redundancy and Workers Compensation Claim: If you were made redundant before making a workers compensation claim, you can still pursue your claim for compensation. It’s important to act promptly by lodging a workers compensation claim with the support of a workers compensation lawyer who can guide you through the necessary steps and help protect your rights.

How Alliance Compensation & Litigation Lawyers can help

Whether you are recovering from an injury, seeking clarification on your workers compensation benefits, or have recently been redundant while on workers compensation, our team of experienced Workers Compensation Lawyers is here to assist you. We will review your claim thoroughly and ensure that you receive all the entitlements you deserve.

For any further information contact us today or call for a free consultation on 02 8764 1776

Get in touch to find out more HERE … or call 02 8764 1776
We can help.
No win, no fee.
We can help.
No win, no fee.

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