The Full Federal Court has recently determined how personal/carer’s leave should be calculated under section 96(1) of the Fair Work Act 2009 (Cth) (FW Act) for shift workers who do not work a standard day.
In a 2-1 decision, the Court in Mondelez v AMWU FCAFC 138(Mondelez) ruled that employees are entitled to 10 days of personal/carer’s leave per year, regardless of the pattern of hours worked by the employees such as the length of their shift.
Under the FW Act, an employee is entitled to ’10 days’ of paid personal/carer’s leave per year of service. In this instance, the two Cadbury employees who commenced the claim worked three, 12-hour shifts each week for a total of 36 hours per week. The question was how should their personal leave be calculated i.e. how many hours of personal/carer’s leave should they be paid on a day that they were unable to work.
Mondelez, the employer, contended it should be calculated on the basis of the industry standard, ‘notional day’ which, on the basis of a 36 hour week, is 7.2 hours. Based on Mondelez’s interpretation, the employees would be paid only 7.2 hours of personal/carer’s leave when they would have otherwise been paid for 12 hours of work had they completed the rostered shift.
The union, on behalf of the employees, argued that the employees\’ entitlements should be paid on the basis of their 12 daily ordinary hours and anything less would result in the employees not receiving the minimum entitlement under the FW Act.
The majority decision of the Court was that a ‘day’ had its natural meaning and in this instance, a ‘day’ for those workers was a 12 hour day and they should therefore be paid 12 hours of personal/carer’s leave. Across a year, this would entitle the employees to 120 hours of personal/carer’s leave.
The court acknowledged that, while this would create unequal outcomes between employees and difficulties in circumstances where the length of an employee’s shifts was inconsistent, those issues weren’t enough to escape the natural meaning of the word ‘day’ used in the FW Act.
This decision will equally apply to any industries with shifts longer than a standard 7.2 hour day such as mining, construction, medicine or veterinarian services. If your business rosters employees on longer shifts and calculates personal/carer’s leave by reference to ‘hours’, you should ensure you are paying full entitlements for personal/carer’s leave. If you need any assistance or would like to review your policies and systems, please contact GRT Lawyers.
We note the Mondelez decision is now subject to appeal.