Continuous Employment
The first consideration to remember is that when an employee goes off work on ACC, whether it's from an injury at work or in their private life, they are still your employee and employment law obligations still apply. Their absence is still deemed 'continuous employment'. Forget about them at your peril. During their absence, their tenure continues, annual leave accrues and anniversaries continue as normal, along with payment obligations. Even if they've been away for years and you haven't heard from them, unless a termination (from either party) has taken place, they remain your employee.
Payment while on ACC
If the associated injury has occurred at work, the Employer is liable to pay the first week at 80% of the usual earnings (and not deduct sick leave entitlement). Further time off is paid by the ACC (at 80% of usual pay). The Employer and Employee can agree to top up the balance (20%) by using the Employee's sick leave entitlement and/or annual leave.
Public Holidays
Do staff on ACC qualify for Employer paid Public Holidays? No. The ACC payments continue as normal regardless of Public Holidays or not. The Employer pays nothing more. Public holiday entitlements are dependent on the 'Otherwise Working Day' test, which basically translates to mean: 'But for the Public Holiday occuring, would the employee have worked?' Yes, or No? If an employee is off work on long-term ACC due to a personal injury, then they would not have worked on the public holiday, and therefore there will be no obligation to pay them for a public holiday.
Terminating
Employees can of course resign at any point during the employment relationship without giving reason - some may choose to do this where they are off work and on ACC. However, if they don't or won't even during a long-term spell on ACC this can leave the Employer with little choice, but to look at implementing a formal medical disengagement process.
An Employer does not have to keep a role open and available to an injured employee indefinitely, but they must reasonably accommodate an Employee's absence and formally consult with them prior to any decision to terminate for reasons of medical incapacity. Circumstances should always be assessed on a case-by-case basis of course, there's no one size fits all approach for this scenario. Such an undertaking is heavily process driven, and cannot be covered in this article alone. We recommend reading our eBook on
Medical Incapacity, including the applicable template letters and sample procedure.
Final Pay
Calculating an employee's final pay from a period of ACC often comes as a shock for some who hadn't realised the impact of having an employee on long-term ACC means they're still accruing annual leave, and the usual rules of paying out holiday pay apply.
If the employee is still within the first 12 months of employment they haven't yet hit their entitlement to annual leave, the calculation is simply 8% of gross earnings in the period.
After the first anniversary year, then any entitled annual leave balance must be paid at the 'higher' or either 'Ordinary Weekly Pay' or 'Average Weekly Earnings' - Usually OWP will be the higher rate here, i.e. the amount of pay payable under an employee's employment agreement for ordinary working week. Any remaining portion since the last anniversary again is paid at 8% of gross earnings for that period.
Takeaway
Ensure continuous communication with any employees while they are away on ACC. Do not forget them or simply write them off, they are still your employee and be aware that they will still continue to accrue annual leave. A good rule of thumb is to start questioning their return to work at around the three month point if you haven't already, and if there is no obvious prospect of them returning, then a formal medical disengagement process may need to be carefully considered. If you're a Member, then you can find our Employer eBook - Medical Incapacity - on
Library of your Employers Toolbox.