Article by Wesley Davey
Balance is restored in the universe, at least as far as paid personal/carer’s leave is concerned.
A recent decision of the High Court of Australia (‘HCA’) has confirmed the existing approach to accrual and payment for personal/carer’s leave in accordance with the National Employment Standards (‘NES’), in part 2-2 of the Fair Work Act 2009 (“the Act”). The decision in Mondelez, is the first decision of the HCA on the NES and restores the existing common-sense approach to personal/carer’s leave historically taken by employers. This brings to an end a long running matter that reached the highest court in the land and one that was particularly concerning for employers.
So What Happened
Mondelez and the Attorney General and Minister for Industrial Relations, the Honourable Christian Porter, were granted special leave to appeal a Full Court of the Federal Court of Australia’s (‘FCA’) August 2019 ruling in the HCA.
In August 2019 the FCA found that a ‘day’ for the purpose of 10 days paid personal/carer’s should be interpreted as a “working day”, meaning that an employee should receive 10 days of personal/carer’s leave irrespective of the hours that fall on a day when paid personal/carer’s leave is taken.
The decision of the FCA was significant, as it meant that personal/carer’s leave interpreted as a “working day” could lead to:
- changes in the accrual and processing of personal/carer’s leave;
- a significant variance in the number of hours of personal/carer’s leave paid to different employees depending on the length of the day when leave is taken; and
- a part-time employee receiving the same or a greater personal/carer’s leave entitlement than a full-time employee.
The HCA found, by majority, that the appeal be allowed, set aside the order of the FCA and declared that:
1. 10 days means an employees weekly ordinary hours over a two week period;
2. this is 1/26 of the employees ordinary hours of work in a year; and
3. a day is a notional day, being one-tenth of an employees entitlement to 10 days;
The HCA rejected the FCA’s “working day” construction on the basis that it “is not consistent with the purpose of s 96 or the stated objectives of the Fair Work Act” and would “give rise to absurd results” and “lead to inequalities between employees with different work patterns, and so would be unfair” .
The HCA’s decision reflects the existing common-sense approach to 10 days paid personal/carer’s leave taken by employers, in the manner that personal/carer’s leave is accrued, taken and paid. Personal/carer’s leave should be accrued based on an employees ordinary hours of work. If an employee is absent for a day, the employee should be paid for the ordinary hours of work on the day, which may be more than a notional day and the number of hours paid for should be deducted from the accrued entitlement.
QHA members seeking more information or wishing to discuss a specific employment relations matter are encouraged to contact the Employment Relations Department for a confidential discussion by calling
(07) 3221 6999 or emailing firstname.lastname@example.org