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By Chris Nikolovski
When we think about workers’ compensation, we often think about employees. But what about company directors?
Many directors are surprised to learn that they are usually covered by workers’ compensation legislation as well. This is because a director of a corporation is also a ‘worker’ under the legislation. This means a director may have the same rights and entitlements as any other worker under the legislation.
Being a director doesn’t automatically mean you’re excluded from the definition of a worker. If you meet the relevant requirements under the legislation, you may have access to the same workers’ compensation entitlements as other workers.
Directors can also be workers
A company director can wear many hats. They may be responsible for managing the business, but they can also perform day-to-day work just like other employees and are an integral part of the team.
Whether you work for a small company, or are a director of a large national or international company, your position as a director does not, itself, prevent you from being covered by workers’ compensation legislation.
This means if you suffer an injury in the course of your work, you may be entitled to make a workers’ compensation claim with the company for which you work.
Understanding whether you fall within the definition of a “worker” is therefore important.
What about shareholders?
A shareholder may not be a worker automatically, but if you are a shareholder of a company and work there then the same legislation applies to you as any other worker in that company.
The same principle can apply to shareholders.
The distinction is important because workers’ compensation legislation generally looks at the nature of the working relationship and the relevant statutory definitions, rather than simply the title you hold within a business.
The legislation that applies could be a state law or commonwealth so it is always important to obtain advice.
What about sole traders?
A sole trader is different.
Unlike a director of a company, a sole trader is generally not considered a worker under the workers’ compensation legislation as if they are the entity itself.
This distinction between operating as a sole trader and operating through a company can have significant implications when it comes to workers’ compensation coverage.
Sole traders that are not incorporated should consider their own private insurance such as income protection, but they will be personally responsible for this.
Injured at work? Know your rights
If you’re a company director or shareholder that is also considered a worker, and you’ve suffered an injury you should obtain legal advice about your rights.
Workers’ compensation legislation can be complex, and whether you are covered will depend on your particular circumstances and the relevant legislation.
At Nikolovski Lawyers, we can provide advice about your rights, obligations and entitlements and help you understand whether you may be covered by workers’ compensation.
