Can an Employee Be Terminated While on Workers Compensation in NSW?
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Principal Lawyer and Director · Last updated 30 August 2026
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Key takeaway: Yes, your employer can terminate you while on workers compensation in NSW, but not within 6 months of your injury purely because you are unfit to work (the protected period). Termination does not stop your payments: weekly compensation can run up to 260 weeks, or longer if your WPI is 21% or higher.
Termination on Workers Compensation: Quick Answers
Can an employee be terminated while on workers compensation in NSW? The short answer is yes.
While your employer may terminate you, it is not legal for them to do so within six (6) months of your injury, purely because you’re unfit to return to work. This period is called the ‘protected period’.
After 6 months however, it is legal for your employer to terminate you, provided they have facilitated all things possible to assist you to return to work.
If you are terminated however, you may have options to seek reinstatement.
Common Injuries Eligible for Workers Compensation in NSW
To qualify for workers compensation in NSW, your injury must occur during the course of your employment. Eligible injuries include:
- Physical Injuries: Such as fractures, sprains, or repetitive strain injuries.
- Psychological Injuries: Including work-related stress, anxiety, or depression.
- Occupational Diseases: Conditions caused by workplace exposure, like asbestosis.
- Aggravation of Pre-Existing Conditions: If worsened by work-related activities.
If you’ve experienced any of these injuries at work, you may be eligible to claim workers compensation benefits. If you are unsure if you injury qualifies, or if you are unsure of your entitlements, contact our team of experienced workers compensation lawyers today for a free claim assessment.
Your Employer’s Responsibilities While You’re on Workers Compensation
Your employer should facilitate your return to work by:
- Participating in the development of the your injury management plan.
- Complying with their obligations set out in the injury management plan.
- Providing you with suitable work where reasonably practicable, when you’re able to return to work, either on a full-time or part-time basis, with or without restrictions.
- Providing you with suitable work that is, where reasonably practicable, the same as or equivalent to the work you performed at the time of your injury.
Part of supporting your return to work requires that your employer identifies suitable work options for you, by considering the following:
- The physical demands of each task.
- The impacts of your injury, and any medication you may be taking on your ability to manage the psychological, cognitive, and social demands of the duties being offered.
- Whether the environment you are returning to is appropriate, considering confined spaces, seating arrangements, uneven surfaces and working alone and whether these would impact on your ability to undertake specific tasks.
- Elimination or substitution of tasks to reduce the risk of further injury to you.
- If the duties identified fall outside what would be considered your usual duties, then whether you require further education or training to complete the duties safely.
- How your personal circumstances influence your recovery at work. For example, if your employer were to relocate you, they should consider where you live and whether this creates difficulty getting to and from work.
- Whether the duties add value to the workplace. If the duties do not add value, you may become unmotivated or discontent.
Terminating an Employee on Workers Compensation in NSW: What Happens to Your Entitlements?
If your employer terminates your employment while you’re on workers compensation, they must follow specific legal requirements, including:
- Providing Written Notice:
Your employer must issue written notice of termination. - Honoring Your Minimum Notice Period:
They must provide the required notice period under your employment agreement or the Fair Work Act. - Paying in Lieu of Notice:
Your employer may choose to pay you instead of requiring you to serve the notice period. - Combination of Notice and Payment:
They can also combine written notice with payment in lieu of the remaining notice period.
Your Entitlements After Termination
Even if you’re dismissed because your GP certifies you as unfit for work, your workers compensation benefits do not end. Here’s how it works:
- If You’re Fully Unfit for Work:
You remain eligible for:- Weekly payments to replace lost wages.
- Coverage for reasonably necessary medical treatment.
These benefits will continue during your entitlement period.
- If You’re Fit for Suitable Duties:
If your GP certifies you as fit for modified or suitable duties but not pre-injury duties, you’ll receive:- Pro-rated weekly payments based on your capacity to work.
- Medical treatment within your entitlement period.
Who Pays Your Benefits After Termination?
When your employment officially ends (e.g., resignation or dismissal), your weekly payments will no longer come from your employer. Instead, the workers compensation insurer will take over responsibility for paying your benefits directly.
Can I Resign While Receiving Workers Compensation in NSW?
Yes, you can resign from your job while receiving workers compensation benefits, as long as you provide the required notice period to your employer. In most cases, your workers compensation period can count as your notice period.
However, resigning while on workers compensation is a significant decision and may not always be in your best interest. In some situations, resigning could impact your ongoing claim or entitlements, and your employer or insurer may use it against you. We recommend you speak to our team of workers compensation lawyers for free advice on how this could impact your claim.
Can Your Employment Be Reinstated After Being Terminated While on Workers Compensation in NSW?
If your employer has terminated your employment due to your injury, you may seek reinstatement of your employment when you’re certified by your GP as fit to return to pre-injury duties. Provided it has not been more than two years since your dismissal, you can seek reinstatement:
Speak to your employer about reinstatement. If not to your pre-injury role, to one that is not less advantageous than your pre-injury role.
If your employer is unwilling to reinstate you, you need to apply to the Industrial Relations Commission (IRC) for a reinstatement order.
Reach us for free legal advice
What to Do if You’re Facing Termination on Workers Compensation
If you believe your termination was unfair or unlawful, take the following steps:
- Seek Legal Advice:
Contact our experienced team of workers compensation lawyers to assess your situation and protect your rights. - Lodge a Complaint:
You may be able to file a complaint with the Fair Work Commission for unfair dismissal or discrimination. - Continue Your Claim:
Even if terminated, you may still be eligible for medical benefits, weekly payments, or lump-sum compensation under NSW workers compensation laws. Our team of workers compensation lawyers can help you claim your entitlements on a No Win No Fee basis.Losing your job while on workers compensation can be overwhelming, but you don’t have to face it alone. Taking swift action and seeking the right legal support can make all the difference. Withstand Lawyers are here to guide you through this process and fight for the compensation and justice you deserve. Contact us today for a free consultation.
Can You Claim Workers’ Compensation After Resignation?
A common question that employees have is “Can I claim workcover after resignation?”. The answer is yes, you can claim workers’ compensation after resignation.
Under NSW law you may still lodge a workers compensation claim after resigning. In most cases, you have up to 6 months from the date of your injury to make a claim, whether you are still employed or not.
However, resigning can impact your claim, especially when it comes to entitlements like weekly payments. Before making any decisions, it’s best to consult with our experienced workers compensation lawyers to understand how resignation may affect your rights and benefits.
How Long Can You Stay on Workers’ Compensation in NSW?
In New South Wales (NSW), injured workers can receive weekly compensation payments for up to 260 weeks (5 years) if their whole person impairment (WPI) is assessed at less than 21%.
If your WPI is 21% or higher, you may be eligible for ongoing payments beyond the 5-year limit. Your entitlement depends on medical assessments and your capacity to work.
Click here to read more about the duration of workers compensation entitlements, or contact our dedicated team of workers compensation lawyers today for a free claim assessment.
Termination and Workers Compensation FAQs
Can an employee be terminated while on workers compensation in NSW?
What is the protected period for injured workers in NSW?
Does termination stop your workers compensation payments?
Can I resign while receiving workers compensation in NSW?
Can your employment be reinstated after termination?
Can you claim workers compensation after resignation?
How long can you stay on workers compensation in NSW?
What injuries are eligible for workers compensation in NSW?
About the author
Issa Rabaya · Principal Lawyer and Director
✓ Admitted to the Supreme Court of NSW and High Court of Australia ✓ LLB ✓ IRO-approved ✓ Law Society of NSW
Acts for injured people in CTP, workers compensation, TPD and public liability claims.
Why Choose Withstand Lawyers for Your Workers Compensation Claim?
At Withstand Lawyers, we are committed to providing compassionate, experienced legal assistance to help you navigate your workers compensation claim with confidence. Here’s why we are the trusted choice for clients across NSW:
1. No Win, No Fee Guarantee
Our firm operates on a strict No Win, No Fee basis, meaning you won’t pay us anything unless your claim is successful.
2. No Out-of-Pocket Expenses
Thanks to funding from the Independent Review Office (IRO), all legal fees and associated costs are covered, ensuring there are absolutely no costs to you.
3. Decades of Experience
With years of proven experience in workers compensation law, our team has helped countless clients achieve favorable outcomes in even the most complex cases.
4. Free Claim Assessment
We offer a free, no obligation assessment of your case, so you can understand your options and make informed decisions with no pressure.
5. Clear, Simple Communication
Legal jargon can be overwhelming. We explain everything in straightforward terms, so you fully understand your rights, entitlements, and the claims process every step of the way.
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“Working with Esther has been an absolute blessing during an incredibly difficult time. Anyone who has ever had to navigate an insurance claim knows just how difficult, overwhelming, and anxiety-inducing the entire process can be. Before reaching out to Withstand Lawyers, I was constantly stressed and deeply overwhelmed by the system. The firm made the initial intake process incredibly smooth, and they placed me in the hands of my lawyer, Esther. From that moment on, from the first conversation, I finally found my solid ground. Esther has completely transformed how I navigate this unfortunate situation. Because she handles my matter directly, I have a direct line of contact with her and never have to jump through hoops to get support. Esther’s presence alone has given me immense confidence in my claim. What sets her apart is her perfect balance of professional mastery and genuine empathy. As a client, having a lawyer who truly listens and supports you when your mind is filled with doubt is a massive relief. She doesn’t just manage a file — she consistently protects her client’s peace of mind. Her recommendations are always highly logical, realistic, and clear-cut. She cuts through the legal confusion and tells you exactly where you stand, which is exactly what you need during the hardest times of your life. I feel incredibly lucky to have Esther and her team at Withstand Lawyers by my side. For anyone out there facing a difficult time with an insurer and looking for a legal advocate who offers absolute clarity, strength, and compassion — I cannot recommend Esther highly enough. She is a truly admirable professional who genuinely cares about the people she protects. Truly grateful!” “I have searched top lawyers (personal injury) in Sydney. I found Withstand Lawyers so I rang them up and asked I need lawyers that are nicer and more understanding despite what I am going through. They exceeded my expectations especially Issa, he always remind everyone to be more cautious when speaking to me and I really appreciate that. I am satisfied that my case (MVA) turned out to be successful. Withstand lawyers is more than 5 stars. Can’t recommend highly enough.” “I would like to express my deepest appreciation for the incredible support I’ve received over the past 4.5 years. My case has been long, complicated, and filled with challenges, but Issa and his team stood by me through every step with genuine care, professionalism, and dedication. Their compassion has meant just as much to me as their legal expertise. They didn’t just handle my case, they helped me through some of the most difficult years of my life. I wholeheartedly recommend them to anyone who needs genuine support, honesty, and a team that truly cares about your wellbeing.” “Thank you Withstand Lawyer for your exceptional work, professionalism and easy process for successfully assisting me with my TPD claim. I am thankful for your support. I highly recommend Withstand Lawyers and the services they provide.” “Had a very positive experience with Withstand Lawyers. The team was professional, knowledgeable, and supportive throughout the entire process. They took the time to explain everything clearly, kept me informed at every stage, and responded promptly to my questions. Their attention to detail and commitment to achieving the best possible outcome gave me confidence from start to finish. I truly appreciate their dedication and excellent service, and I would highly recommend Withstand Lawyers to anyone looking for reliable and trustworthy service.” Every claim is handled by a personal injury lawyer with dedicated workers compensation and work injury experience. Issa Rabaya Director, Lawyer Founder and Director with 12 years' experience since his 2014 admission, previously at the largest litigation law firm in Australia. A personal injury lawyer for serious injuries, leading Withstand Lawyers' work across every claim type, with settlements reaching into the millions, including a $6.3 million motor vehicle accident result. Esther Ihn Senior Associate Senior Associate with over a decade of experience exclusively in personal injury claims since 2014, handling hundreds of matters across motor vehicle accidents, workers compensation, work injury damages and public liability. The team's go-to for serious-injury claims. Chenoa Ingram Lawyer · 4+ yrs experience Lawyer with 4+ years' hands-on experience in personal injury claims, built inside the firm before her 2026 admission, known for being organised and efficient in progressing clients' workers compensation, work injury damages, public liability and TPD claims. Lauren Bergan Lawyer · 4+ yrs experience4.9 ★ — 265+ Reviews
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