Annual leave used as sick leave due to claim injuries is recoverable as economic loss because the plaintiff will be entitled to acrue and be paid out unused sick leave at the end of their employment. The same applies to sick leave where it can acrue and the unused amount be paid out at the end of employment. However, in the case of sick leave, very few employees are entitled to acrue it and be paid it out at the end of their employment. How can an injured plaintiff recover economic loss for sick leave used up due to claim injuries?
In Kenny & Anor v Eyears & Anor [2003] QSC 439 at [49]-[55], Her Honour Philippides J decided that an injured plaintiff was entitled to economic loss for annual and sick leave paid by the plaintiff’s employer. This was beacuse the annual and sick leave was used by the plaintiff to recouperate from injury and the employer had agreed to re-credit the plaintiff’s leave account if it was paid back to the employer. Her Honour stated:
Decisions such as Graham v Baker (1961) 106 CLR 340 require that there be a set off against a claim for loss of earning capacity of any payments received by the plaintiff as ordinary wages. However, the High Court in that case also observed (at 351) that in an appropriate case, the extinguishment or diminution of sick leave credits may result in damage. In the present case, Mrs Kenny’s employer has agreed to re-credit the sick leave, and I accept that Mrs Kenny has in the circumstances suffered compensable loss.
Graham v Baker (1961) 106 CLR 340
A deduction was made though for the travel expenses the plaintiff did not need to incur while incapacitated for work and therefore not travelling to her workplace.
Graham v Baker also allows for recovery of economic loss for sick leave used for claim injuries where the plaintiff has lost the use of that sick leave for non-claim related reasons, such as colds and flues etc that are not the defendant’s fault. However, each case will turn on it’s own facts and if the plaintiff never or virtually never used sick leave prior to their accident and has no non-claim related need to use it in the future, then this may be of little to no assistance for a plaintiff seeking to maximise their damages for economic loss.
This shows the importance of asking a plaintiff’s employer if they agree to re-credit the plaintiff’s sick leave if claim related sick leave is paid back to the employer. If the employer agrees to do so, an argument can be mounted that the defendant should pay for that sick leave.
What about the case of charitable leave, where a plaintiff’s employer out of the goodness of their heart, simply pays ‘sick leave’ for their employee’s time off work due to claim injuries? Can the plaintiff recover economic loss for that charity from their employer? They can, and this is what happened in Clement v Backo & Suncorp Metway Insurance Ltd [2007] QCA 81 where His Honour Fryberg J at [83] to [93] found that Graham v Baker did not apply because in that case, the plaintiff was legaly entitled to the sick leave, whereas the benefits received by the plaintiff in Clement were not a legal entitlement arising due to the claim injuries. His Honour instead applied the test in National Insurance Co of New Zealand Ltd v Espagne [1961] HCA 15. A defendant is not entitled to have gratuitous services or payments (such as charitably paid sick leave) applied in its favour by a reduction in the plaintiff’s damages.