Personal / Carer’s Leave accrual – High Court Decision in Mondelez Case

Yesterday 13 August  the High Court ruled on how the entitlement to paid personal / carers leave is to be calculated under s96(1) of the Fair Work Act 2009 (Cth) in the case now commonly referred to as the Mondelez Case.

Background

In August 2019 a full Federal Court majority held that two 12 hour shift workers were entitled to 10 12 hour days of paid personal / carers leave rather than 10 shifts of 7.6 hours. This decision entitled the shift workers to 120 hours of paid personal leave per year.

The Australian Manufacturing Workers Union (AMWU) representing the shift workers argued that the construction of a working day [“working day construction”], for the purposes of interpreting s96(1) of the FWA was the “portion of the 24 hour period that would otherwise be allotted to work” and that s96(1) provided for 10 such days.

Potential Impact

Left undisputed, the above full  Federal Court ruling resulted in s96(1) of the FWA providing an entitlement to all part time and full time employees to 10 days of paid personal leave irrespective of the working hours performed in the day.

Outcome

The Federal IR Minister Christian Porter and Employer Mondelez appealed against the above full Federal Court ruling.  This appeal resulted in the High Court setting aside the full Federal Court judgement, declaring

The expression ’10 days’ in s 96(1) of the Fair Work Act 2009 (Cth) means an amount of paid personal/carer’s leave accruing for every year of service equivalent to an employee’s ordinary hours of work in a week over a two-week (fortnightly) period, or 1/26 of the employee’s ordinary hours of work in a year. A ‘day’ for the purposes of s 96(1) refers to a ‘notional day’, consisting of one tenth of the equivalent of an employee’s ordinary hours of work in a two-week (fortnightly) period.”

It was further stated that the “working day construction” would

“give rise to absurd results and inequitable outcomes, and would be contrary to the legislative purposes of fairness and flexibility in the FWA”.

What this means

What this means for schools is that the current (traditional / pro-rata) method for accruing personal leave for full time and part time staff remains as was the practice prior to the initial Full Federal Court decision.

Menu