Full Court rules personal leave calculated in ‘days’ not hours

The Full Federal Court has ruled on the personal/carer’s leave entitlements for national system employees. The Court examined how the entitlement to 10 days of paid personal/carer’s leave under the National Employment Standards (NES) in the Fair Work Act 2009 should be construed and what the term “day” meant in relation to that personal/carer’s leave. 

Workers at the Cadbury chocolate factory worked 36 hours per week either as 12 hour shifts for three days or 7.2 hour shifts for 5 days.

Workers submitted that the notion of a “day” had its ordinary meaning of a “calendar day” and therefore a worker should be entitled to be absent from work without loss of pay for 10 calendar or “working days” per year of service.

The company argued that a “day” was a “notional day” consisting of an employee’s average weekly hours based on an assumed five-day working week.  

The Minister (who intervened) also argued that the “10 days” was the equivalent of an employee’s ordinary hours of work (excluding overtime) in a two week period.

The Full Court rejected the company’s and the Minister’s submissions and found that;

“The natural and ordinary meaning of ‘10 days’ of paid personal/carer’s leave in s.96(1) is authorised absence from work for ten such “working days” …”

“Under s.96(1), the accrual is expressly based upon time served with the employer and is calculated in ‘days’. So… every 5.2 weeks, the employee accrues an entitlement to another full day of paid personal/carer’s leave.”

The Court determined that the “…ordinary, or ‘working day’ construction …is consistent with the purpose of providing…income protection for all part-time and full-time national system employees.” 

As such, where an employee is rostered on to work a certain number of hours and is absent from that shift due to personal/carer’s leave, that employee is entitled to a payment reflecting the income he would have earned had he been able to work.

The employee working three 12 hour shifts a week was entitled to be absent for 10 days of 12 hours each without loss of pay and the employee working five 7.2 hour shifts a week was entitled to be absent for 10 days of 7.2 hours each without loss of pay.  

For example: if an employee is sick on a day on which he is rostered to work 12 hours, then they are paid for 12 hours and one ‘day’ comes out of their personal leave entitlement.

This decision is inconsistent with long standing industry practice and may well be appealed to the High Court or Parliament may legislate to reverse the effect of this decision. 

However, the Fair Work Ombudsman has revised its advice and adopted this approach and all employers now need to ensure personal/carers leave are paid in accordance with this decision. Employers are also urged to review their employment contracts to ensure it is not inconsistent with the NES. Part-time employees no longer accrue personal/carers leave on a pro-rata basis but accrue 10 days personal/carers leave per annum.

[Mondelez v AMWU [2019] FCAFC 138 (21 August 2019)]

Disclaimer: This summary is not legal advice and for more information on NES entitlements call NECA Legal (WA) Pty Ltd on (08) 6241 6129 or email necalegalwa@ecawa.org.au.