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8.10 Paid Leave
When a person accesses paid leave while in employment i.e. annual leave or long service leave, the hours and earnings they receive payment for are considered AE. They will receive payment as if they were actually working those hours.
8.10.1 Lump sum payment in lieu of leave
Where a person has ceased working and receives a lump sum payment in lieu of accrued leave, these payments are not directly related to the person's labour. These leave payments are excluded from AE. Any payments in lieu of annual leave are to be regarded as forfeiture of accrued benefits and not money earned. If a person takes a period of paid leave prior to leaving employment then this is counted as AE.
8.10.2 Unpaid leave
If a person accesses unpaid leave, unless the person is incapacitated for work as a result of a compensable injury/disease during that leave, no additional compensation payments can be made for the time off work. The person should be considered to have the same level of incapacity and be treated as if they had continued in the same hours and earnings over the period. The same hours and earnings should be held in calculations over the period.
Example – Unpaid holiday leave
A person has started work and is normally entitled to four weeks holiday leave per year. His employer shuts between Christmas and New Year and employees are expected to use their holiday leave for this period (otherwise it is unpaid leave). The person has not accrued sufficient holiday leave to cover the shutdown. The person will have to take unpaid leave for the break. In this case, the person should be considered to have the same level of incapacity and be treated as if they had continued in the same hours and earnings over the period and there is no change to their incapacity payments