The Federal Court of Australia has clarified entitlements to Personal (Sick/Carer’s) leave for employees in a recent decision that will have significant impact in some industries, particularly those with shift workers.
The decision in Mondelez Australia Pty Ltd v AMWU  follows a Fair Work Commission ruling last year that backed calculating personal leave entitlements on a worker’s typical shift. The Full Federal Court has confirmed that all employees (including part-time employees) are entitled to 10 “working days” of personal leave per year under the Fair Work Act, regardless of how many hours the employees works per day or how many days they work per week. The Court also confirmed that a working day is not a calendar day. Rather, a working day is the portion of a 24 hour period that an employee would otherwise be working.
Most payroll systems accrue personal leave on an hourly basis. Rather than expressing an employee’s leave entitlement in days or weeks, payroll software tends to record the accrual as an hourly amount (with 7.6 hours often reflecting one day’s accrual). This means most payroll systems accrue 76 hours of personal leave per year for full time employees, and a pro-rata amount for part time employees. In Mondelez v AMWU, the majority ruled that the employees were entitled to paid personal leave of 10, 12 hour shifts per year, because the 12 hour shifts were their ordinary hours of work. Whilst there is a chance this may be appealed to the High Court, the decision by the Full Federal Court is binding and immediately applicable, so employers will need to revisit how they calculate and grant personal leave entitlements to ensure they are correct, as well as considering any obligations they may have under relevant awards, enterprise agreements and contracts.
Keeping up with your obligations under the Fair Work Act can be tricky, and seeking expert advice can assist you to stay on the right side of the law. If you need help ensuring you’re on top of your obligations, contact us today at HR Dept Ringwood on 03 6289 8955 or email@example.com