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Case study – Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union; Minister for Jobs and Industrial Relations v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29

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Case study – Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union; Minister for Jobs and Industrial Relations v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29 (13 August 2020)

By a majority of 4-1, the High Court has overturned the Full Federal Court’s ruling concerning how entitlements are to be calculated for personal/carer’s leave under section 96(1) of the Fair Work Act 2009 (Cth), which provides employees with 10 days of paid personal/carer’s leave per year.

The High Court confirmed that each employee is entitled to 10 days of paid personal/carer’s leave in accordance with the National Employment Standards. However, these “days” will be “notional days” meaning that leave will be accrued proportionally to the ordinary hours worked by the employee.

This differs to the Full Federal Court’s blanket approach, which considered that the National Employment Standards provided 10 days for employees, regardless of their pattern of work or distribution of hours.

The High Court was of the belief that the construction employed by the Full Federal Court would “give rise to absurd results and inequitable outcomes, and would be contrary to the legislative purposes fairness and flexibility in the Fair Work Act, the extrinsic materials and the legislative history.”

The absurdity of such construction would result in additional entitlements for employees, particularly if they worked multiple jobs. That is, compared with a person who works the same hours for one employer, a part-time worker would have double the entitlements if they worked for two employers.

The High Court took a more practical approach, which involves calculating the duration of a “day” as 1/10 of an employee’s working hours over a two-week period. For example, a standard full-time employee working 38 hours per week and 72 hours a fortnight would accrue 7.6 hours of personal/carer’s leave each fortnight, or 76 hours per year.

Alternatively, a part-time employee working 40 hours per fortnight will be entitled to one paid personal/carer’s day on 4 hours.

As patterns of work do not always follow two-week cycles, the entitlement to 10 days of paid personal/carer’s leave can be calculated as 1/26 of an employee’s ordinary hours of work in a year.

This result represents a major victory for employers, as well as confirming the long-standing approach regarding the accrual of personal/carer’s leave.

It further shows that the courts are open to identifying and considering the practical implications of statutory interpretation, especially when such a strict and literal interpretation would result in absurd outcomes.

CONTACT

Anthony Maher | Partner | anthony@mmrb.com.au | www.mmrb.com.au

Stacey Bonney | Senior Associate | stacey@mmrb.com.au | (03) 9604 9400

Sean Sim | Lawyer | sean@mmrb.com.au | (03) 9604 9400

Disclaimer: This article is general commentary on a topical issue and does not constitute legal advice. If you are concerned about any topics covered in this article, we recommend that you seek legal advice.

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