2. The employer relies on s 84(2) as providing the legal authority to suspend the worker's weekly payments.
3. The parties cited decisions from other jurisdictions relating to accrual of leave entitlements during periods of workers compensation, however this case turns on the interpretation of s 84.
4. The meaning of the section is to be determined according to the ordinary and grammatical meaning of the text having regard to the context and purpose of surrounding provisions and the Act: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41 at [4] and [47] and Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 at [69]. A purposive approach is to be taken and context is to be considered at the first stage of the process of construction: The Queen v A2 [2019] HCA 35 at [32]- [37].
5. The scheme of the WRC Act is to provide a system for compensation for injured workers. The purpose of s 84 is to entitle a worker to a period of leave on full pay equivalent to the annual leave that the worker would otherwise have accrued during the worker's period of incapacity. A further purpose is to ensure that a worker who takes a period of annual leave is not paid weekly payments of compensation while doing so.
6. The obligation in s 84(1)(a) is that the worker must be given a similar period of leave on full pay in lieu of the equivalent annual recreation leave after return to work or at the termination of the workers right to compensation.
7. Section 84(1)(b) provides, in the alternative, that a worker may, by arrangement with the worker's employer, take annual leave during the period of the workers incapacity. Section 84(2) provides that if the worker takes annual leave the worker is not entitled to receive weekly payments of compensation during that annual leave.
8. In Betty Joan Cannon v Coats Patons (Australia) Limited [1985] TASSC 55 Cosgrove J considered a similar provision in s 8C(1)(b) of the now repealed Workers Compensation Act 1927 (the 1927 Act):

8C - (1) If during a period for which compensation would otherwise be payable to a worker under this Act there occurs any period during which the worker would be entitled under the contract of service in force when the right to compensation accrued to be absent from his employment on full pay, the worker shall - > > (a) ... > > (b) in the case of a period in the nature of annual recreational leave, be given by his employer a similar period of leave on full pay in lieu at some time within 3 months of his return to work, or at the termination of his right to compensation under this Act if he does not then return to work.

9. At [8] his Honour considered that the entitlement to "a similar period of leave on full pay in lieu", a formulation also used in s 84(1)(a), was an entitlement separate from and additional to the right to weekly payments. He confirmed that approach in Foster v Fonthill Pty Ltd [1987] TASSC 67 at [16]. That approach is consistent with the requirement in s 84(1)(a) that a worker be given equivalent accrued annual leave on return to work or on termination of the right to compensation.
10. The effect of s 84(1) is that a worker should receive the same annual leave entitlements that the worker would be due under the worker's contract of service, as if the worker had not been absent from work on workers compensation. The worker's right to compensation is unaffected except in the circumstance where leave is taken as provided in s 84(2).
11. The worker's contract of service, if a formal written contract in fact exists, was not included in the agreed facts. Clause 31.1 of the Award provides that the worker is entitled to annual leave in accordance with the National Employment Standards in the Fair Work Act. No issue was raised by the parties in respect to the terms of the contract of service and I will assume that either the contract provided for annual leave or that the entitlement to annual leave under the Award forms part of the contract of service without any need to consider implication of terms: Byrne v Australian Airlines Ltd [1995] HCA 24.
12. Section 90(2) of the Fair Work Act requires that accrued annual leave be paid out on termination of employment:

(2) If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken the period of leave.

13. Paragraphs 84(1)(a) and (b) refer respectively to "a similar period of leave on full pay in lieu of annual leave" and "annual leave". The paragraphs are framed as alternatives and it is apparent that notwithstanding the inconsistency of language and the reference to a period of leave in lieu in paragraph (a), paragraph (b) applies to leave accrued during the period of workers compensation, and otherwise.
14. Given the nature and purpose of s 90(2) of the Fair Work Act and s 84 of the WRC Act, I see no difference between annual leave accrued under the contract of service and the equivalent arising in lieu under s 84(1)(a). Both constitute an accrued entitlement to the worker for which the employer is liable.
15. It is also clear from s 84(2) that a further purpose of s 84 is that a worker who takes annual recreation leave while otherwise incapacitated for work is not entitled to receive weekly payments of compensation during the period of that leave. Essentially, the worker is not entitled to be paid workers compensation whilst taking a period of leave for which the worker is receiving payments of annual leave.
16. In N v Taylor Bros Marine Pty Ltd [2022] TASCAT 143 at [16] Deputy President Clues observed that the law is clear that an employer cannot unilaterally cease, terminate or reduce weekly payments of compensation. She referred to a number of cases in support of that observation at [17] to [20]. The suspension of workers compensation during a period of annual leave pursuant to s 84(1)(b) is not a termination or reduction of weekly payments. The amount of weekly payments established under s 69 of the WRC Act is not affected. Rather, the entitlement to compensation is suspended for the period of the annual leave.
17. I did not understand either party to contend otherwise, or that an order of the Tribunal was required to authorise the suspension. The worker did, however, contend that s 84(2) was not enlivened in this matter as it expressly relates to the taking of annual leave by arrangement pursuant to s 84(1)(b), and the worker contends that he did not take leave pursuant to s 84(1)(b). The worker says that it was not open for the employer to cease weekly payments, or reduce them to nil, without an order of the Tribunal pursuant to s 88 of the Act, observing that the avenues to reduce or terminate weekly payments pursuant to s 86 and s 81A(5) do not apply. The employer contends that the payment to the worker for annual leave was the taking of the annual leave pursuant to s 84(1)(b) so as to enliven s 84(2).
18. The worker also says that if he is considered to have taken annual leave it was not by arrangement with his employer, as required by s 84(1)(b). The employer says that an arrangement for the purposes of s 84(1)(b) may arise by operation of law as a consequence of the workers resignation. I do not need to determinate that as, for the reasons set out below, I am satisfied that the worker did not take annual leave for the purposes of s 84(1)(b).
19. There is a difference between the taking of annual leave and the cashing out of accrued annual leave. The Fair Work Act treats the taking of annual leave and the cashing out of annual leave as alternatives. Section 88 of that Act regulates the taking of paid annual leave and s 92 deals with, and restricts, cashing out:

(1) Paid annual leave may be taken for a period agreed between an employee and his or her employer.

(2) The employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave.

92 Paid annual leave must not be cashed out except in accordance with permitted cashing out terms

Paid annual leave must not be cashed out, except in accordance with:

(a) cashing out terms included in a modern award or enterprise agreement under section 93, or

(b) an agreement between an employer and an award/agreement free employee under subsection 94(1).

1. The obligation in s 90(2) of the Fair Work Act in respect to payment for untaken paid annual leave accrued as at the termination of employment is for the amount that would have been payable "had the employee taken that period of leave". The obligation is to make a payment for the value of an accrued entitlement, not for the period of accrued entitlement to be taken. That is, it does not provide that the period of annual leave is to be taken, but that an amount is to be paid, such amount to be determined by the period of accrued leave. I do not see anything in s 84 that indicates that the taking of leave for the purposes of that section should have a different meaning.
2. An accrued period of annual leave therefore has an existence somewhat akin to Schrödinger's cat. It exists in two potential states - as a right to a period of absence from work on full pay and as a right to a lump sum payment in lieu. The annual leave crystalises into one or the other on the taking of leave or on the cashing out of leave or on payment in lieu on termination of employment.
3. In this case the employee's employment terminated on his resignation. At that point he was entitled to a payment determined by the period of his accrued leave. As pointed out by Cosgrove J, that entitlement is in addition to his entitlement to weekly payments of workers compensation. Given that he was no longer employed the worker could not then take annual leave from his employment for the purposes of s 84(1)(b) by being absent from work on full pay, and accordingly the right to suspend weekly payments of workers compensation under s 84(2) does not arise.
4. That construction is consistent with the reference in s 84(1) describing the right to annual leave as being the right to be absent from employment on full pay. The use of 'absent' must mean absence from attending and undertaking the duties of employment while employed. The taking of annual leave involves absence from employment.
5. This is supported by the use of 'during' in the phrase "the worker is not entitled to receive weekly payments for compensation during that annual recreational leave" in s 84(2). The use of 'during' contemplates the worker undertaking a period of paid absence from work, and a temporal element that is not present when the payment is made as a lump sum in lieu.
6. Section 84(3) also lends support to this interpretation. It provides that an employer must not attempt to cause or require a worker to take annual leave during a period of incapacity for which compensation is payable, and makes doing so an offence. If an employer terminated a worker's employment for valid reason while the worker is on workers compensation then the obligation under s 90(2) of the Fair Work Act would be triggered by that unilateral action of the employer. If taking annual leave for the purpose of s 84 includes receiving a lump sum payment in lieu then the employer would have caused the worker to take annual leave and be in breach of s 84(3) and liable to prosecution. Construction of the section should avoid such an irrational result: Minister for Immigration and Citizenship v SZJGV; Minister for Immigration and Citizenship v SZJXO [2009] HCA 40 [9].
7. In Lawrence John McCall v E.Z. Company (Australia) Ltd B19/1983 Cosgrove J considered the circumstance of a termination payment and a payment in lieu of notice on the redundancy of a worker who was in receipt of compensation under the 1927 Act. His Honour did not consider annual leave. The issue before his Honour was whether the payments constituted salary or wages such that if the worker was also paid workers compensation he would be paid twice for the same period. That is different to consideration of whether a lump sum in lieu of annual leave is the taking of annual leave for the purposes of s 84(1)(b) and (2). His Honour determined that the payment in lieu of leave should result in the withholding of weekly payments, but the termination payment should not. His Honour considered that the termination payment was not in a payment lieu of wages, but that payment for the period of notice was in lieu of wages for identifiable services which the employer could dispense with. A period of notice is clearly an ordinary period of employment, even if the employer chooses not to require that the worker undertake work during that period. A period of notice does not exist independently of the termination of the employment. Accumulated leave exists as an entitlement independent of the termination of the employment relationship and it does not represent a period of work for which the employer could require performance of the worker's duties. In the context of McCall the payment in lieu of annual leave is more akin to a termination payment than a payment in lieu of notice.
8. In the Ausdoc case the Chief Commissioner said that "the intent of the legislation is that a worker ought not receive a payment for annual leave concurrent with any weekly payment of compensation". He considered that, in respect to a payment for accrued leave on termination of employment, "it seems appropriate to deal with a payment made in this case as if it were a payment made within the context of s 84(1)(b)". With respect I disagree with the Chief Commissioner on these points. The intent of the legislation is that a worker ought not receive weekly payments of compensation concurrent with paid annual leave taken by the worker. A lump sum payment in lieu of annual leave is not a payment made within the context of s 84(1)(b), and s 84(2) is not enlivened.

1. Counsel for the worker submitted I should refer this matter to the Director of Public Prosecutions pursuant to s 86(5) of the WRC Act, which provides that an employer who terminates or reduces a weekly payment otherwise than in accordance with that section is guilty of an offence.
2. I am not satisfied that such a referral should be made. As noted above, the action of the employer was to suspend weekly payments of workers compensation, not to terminate or reduce the payments. In the context of the worker's submission, that is not merely a matter of semantics. As the employer pointed out, s 86 does not cover the field with respect to suspension. For example, there is a separate power to suspend the right to compensation under s 90C of the Act, and the obligation to pay weekly payments is suspended if a medical certificate is not tendered in respect of a particular period: Viney v Roney Management [1996] TASSC 27 [14]. The worker did not contend that a referral to the Tribunal would be required where leave is taken by arrangement pursuant to s 84(1)(b) and payments are suspended.
3. The employer relied on the authority of the Ausdoc case, wherein the Chief Commissioner clearly stated that it was appropriate to deal with a lump sum payment on termination as if it were a payment made within s 84(1)(b). If that was correct then the worker would have had no entitlement to compensation for the period of the annual leave. I have determined that that case should not be followed, but the employer's conduct was not unfounded or careless of the law. I do not consider that the employer's conduct warrants referral.

1. For the reasons set out above, the worker was entitled to weekly payments of workers compensation for the period of the suspension. The gratuitous payment made by the worker's insurer should be taken as part of that entitlement.
2. The worker's referral seeks an order for costs. While the worker has succeeded on the referral, the issue of costs was not raised at the hearing and it would be appropriate to give the employer the opportunity to make submissions in respect to costs if it so choses.
3. Accordingly, the following orders are made:
   1. Within 14 days the employer is to pay the worker weekly payments of compensation for the period from 10 May 2025 to 31 August 2025 inclusive.
   2. The payment of $1,814.12 made by the employer's insurer to the worker on or about 29 August 2025 is to be taken as part payment of the compensation payable under (1).
   3. There is liberty to apply in respect to the amount of the payment to be made pursuant to (1).
   4. Within 14 days the parties are to file a consent memorandum for proposed agreed orders in respect to the costs of the referral.
   5. If the parties are unable to agree proposed orders for the purposes of (4) then within 21 days the parties are to file and serve submissions in respect to costs.