Home High Court clarifies NES paid personal/carer’s leave

UpdatesAug 18, 2020

High Court clarifies NES paid personal/carer’s leave

The entitlement to paid personal/carer’s leave is calculated under s 96(1) of the Fair Work Act 2009 (Cth) (FW Act).

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The entitlement to paid personal/carer’s leave is calculated under s 96(1) of the Fair Work Act 2009 (Cth) (FW Act). This provides that for each year of service with his or her employer, an employee is entitled to 10 days of paid personal/carer’s leave.

In an appeal decision handed down on 13 August 2020 (Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2020) HCA 29), the High Court has ruled that a ‘day’ in ‘10 days’ in 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 period.

This decision provides guidance on the FW Act obligations of an employer with respect to accrual, payment and taking of paid personal/carer’s leave.

Accrual: Over a year of service an employee accrues a number of hours of paid personal/carer’s leave equal to the number of ordinary hours the employee works in a two-week period. This is the case, regardless of whether their ordinary hours over this two-week period are worked across ten, six, or five days. If the employee’s ordinary hours in a two-week period vary because of their working patterns, the entitlement is 1/26th of the number of ordinary hours the employee works in a year.

Payment: When a day of personal/carer’s leave is taken, the employee is paid the amount they would have been paid if they worked a number of ordinary hours equal to one‑tenth of the ordinary hours the employee would have worked in a two‑week period (or if the employee’s ordinary hours in a two-week period vary because of their working patterns, 1/26th of the ordinary hours the employee would have worked in a year).

The timing and number of hours or days of leave taken does not affect this payment. All employees working the same number of ordinary hours in a year are to be paid the same for a day of leave, regardless of whether their ordinary hours over a two-week period are worked across ten, six, or five days in that period.

Deduction of leave when taken: When a day of personal/carer’s leave is taken, the employee’s accrued entitlement is reduced by the actual number of ordinary hours the employee would have worked on that day. This means in some cases, because of the employee’s pattern of work or distribution of hours, the paid personal/carer’s leave entitlement will not entitle the employee to be absent without loss of pay on ten working days per year.

The same principles apply to the entitlement to paid annual leave under s 87(1) of the FW Act. However, the FW Act’s provisions dealing with unpaid pre-adoption leave, unpaid carer’s leave, compassionate leave, and unpaid family and domestic violence leave are different. In respect of these entitlements a ‘day’ is not calculated according to an employee’s ordinary hours of work. Rather, they authorise an absence for the portion of the 24-hour period that would otherwise be allocated to working.

The High Court rejected the argument that a ‘day’ in ‘10 days’ in s 96(1) referred to a ‘working day’, consisting of the portion of a 24-hour period that would otherwise be allotted to working, thereby authorising an employee to be absent without loss of pay on ten working days per year. An employee whose hours are spread over fewer days with longer shifts would be entitled to more paid personal/carer’s leave than an employee working the same number of hours per week spread over more days. The Court cited a number of unfair anomalies that would arise from this construction:

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