When an employee resigns while on workers’ compensation, employers are often left navigating questions about what obligations continue after the employment relationship ends.
A common misconception is that a resignation automatically brings a WorkCover claim to an end. In reality, an employee’s resignation and their entitlement to workers’ compensation are treated separately under Queensland workers’ compensation laws.
For HR and payroll teams, understanding where employer obligations cease, and where WorkCover Queensland’s responsibilities continue, is critical to managing compliance, payroll processes, and employee communication appropriately.
Can an employee resign while on WorkCover?
Yes. An employee receiving workers’ compensation payments during an active claim can resign from their employment at any time.
Importantly, a resignation does not automatically terminate the worker’s compensation claim or their entitlement to compensation benefits.
Depending on the worker’s medical capacity and claim status, the claim may continue after employment ends. In these circumstances:
- WorkCover Queensland may continue to manage and pay ongoing statutory compensation entitlements, including weekly compensation payments where applicable; and
- claim costs associated with medical treatment, rehabilitation expenses, and ongoing support may continue to impact the employer’s claims experience and premium calculation.
This distinction is important because the end of employment does not necessarily mean the end of the workers’ compensation claim itself, and claim-related costs and administrative impacts may continue beyond the employee’s resignation.
What happens to employer return to work obligations?
Queensland employers should distinguish between obligations that apply during employment and those that continue after employment ends.
While the employment relationship remains active, employers are generally required to participate in rehabilitation and return to work processes, including considering suitable duties where reasonably practicable.
Once an employee resigns and employment formally ends, the employer’s obligation to provide suitable duties will generally cease. At that point, responsibility for ongoing rehabilitation coordination and claim management typically shifts primarily to WorkCover Queensland.
For employers, this often means that while the employment relationship has concluded, the workers’ compensation claim itself may remain administratively active for some time afterward.
It is important to note that once employment ends, employers will generally no longer receive ongoing medical information or updated Work Capacity Certificates relating to the former employee’s claim. Employer access to claim information is typically limited to matters relevant to the administration and status of the claim, such as:
- confirmation that the claim remains active; and
- general updates regarding the anticipated timeframe for claim closure.
Employers should also remain mindful of privacy and confidentiality obligations when handling workers’ compensation information following the end of employment.
Practical steps for employers
When an employee resigns during a WorkCover claim, employers should consider:
- confirming the resignation and employment end date in writing;
- clarifying whether the employee will work their notice period or receive payment in lieu;
- reviewing when return-to-work and suitable duties obligations formally cease;
- checking payroll treatment of compensation, leave accruals, and final pay entitlements;
- ensuring accurate records are maintained regarding claim related payments; and
- communicating clearly with both the employee and WorkCover Queensland regarding the employment end date.
When an employee resigns during a WorkCover claim, the employment relationship may end, but the workers’ compensation claim itself can continue beyond termination.
For employers, the key issue is understanding the point at which workplace rehabilitation and suitable duties obligations cease, while ensuring payroll, leave, and communication processes are managed correctly.
A clear and well documented approach can help minimise confusion and ensure both employment and workers’ compensation obligations are handled appropriately.
Seek advice where appropriate: Resignations during an active workers’ compensation claim can involve complex obligations, particularly where there are ongoing medical restrictions, psychological injuries, rehabilitation and return to work considerations, or disputed liability issues.
Employers should ensure they continue to meet their obligations under workers’ compensation and workplace laws, even where the employment relationship has ended.
The workplace relations team at Business Chamber Queensland offer a Workers’ Compensation Information and Advisory Service for Employers and can assist with navigating employer obligations, claim management issues, and review or appeal processes where required.
