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Sweetening Shift Work: Changes to Sick Leave Entitlements

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Sweetening Shift Work: Changes to Sick Leave Entitlements

The recent landmark Federal Court decision of Mondelez v (AMWU) [2019] FCAFC 138 changes how personal/carer’s leave is calculated and accrued. The implications are wide-ranging and significant for both employers and employees, particularly shift workers.

Personal leave must be calculated in “working days” (not hours). A working day is a portion of a 24-hour period that an employee would otherwise be working.

The Case

The case turned on the meaning of “day”. Under section 96(1) of the Fair Work Act 2009 (Cth) (the “FW Act”) “an employee is entitled to 10 days of paid personal/carer’s leave”. Mondelez contended that “day” means a notional working day, which is a number of hours equivalent to an average day based on a 5-day week. The average was calculated as 7.2 hours a day. Under this construction, all workers are entitled to the same hours of paid personal leave a year, being 72 hours.

The Federal Government intervened and supported Mondelez’s interpretation.

AMWU argued that “day” has its meaning of “calendar day,” and all employees are entitled to 10 calendar days of paid personal leave per year.

Key Findings

The majority of the Full Court found in favour of AMWU. They rejected Mondelez’s argument of a notional working day. They found that the FW Act provided no basis for such a formulaic interpretation of “day”. The court concluded that “day” means “working day”.

The court summarised:

• A “day” under section 96(1) of the FW Act means the portion of a 24-hour period that would otherwise be allocated to work (a “working day”);

• An employee accrues an entitlement to be absent from work for 10 working days;

• For every day of paid personal leave taken, a day is deducted from the employee’s leave balance; and

• Accrual of personal leave and the taking of personal leave may be in part days.

The court found that Mondelez’s interpretation of “day” provided significant shortfalls for shift workers. If all workers were awarded 72 hours of paid personal leave, a shift worker who works 12-hour shifts, would have exhausted their paid personal leave after six days of leave.

The court conceded that shift workers would accrue more “hours” of paid personal leave than non-shift workers. However, they found that the purpose of the paid personal leave is to provide protection to employees rather than to supplement income should they later cash out leave.

On balance, it would be a greater inequity for shift workers to have less paid personal leave days than non-shift workers.

Implications for employers

The case has significant implications for employers. Although Mondelez may appeal to the High Court, the Full Court’s decision is the current state of the law. Employers should review their pay roll systems to ensure that employees’ personal leave is calculated on a “working day”, and not an hourly basis (which is a common industry practice).

If you need advice on this decision or wish to know more about what it means for you, please contact Colin Broadbent on (03) 9604 9400.

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