Full Court decides what's in a 'day'

In brief 2 min read

In a decision with far-reaching implications for employers, the Full Court of the Federal Court has decided that employees who work 12-hour shifts spread over a 36-hour week are entitled to 10 days of their shifts each year for personal/carer's leave.¹

How does it affect you?

• This decision will have a significant and far-reaching impact for many employers – who won't be alone if they have been calculating leave accruals on the basis of an employee's ordinary hours. According to the Full Court, this is the incorrect approach.
• Given the significant financial implications for employers, the Minister for Small and Family Business, the Workplace and Deregulation had intervened in the proceedings. It remains to be seen whether the decision will be appealed or whether legislation will be introduced to mitigate its impact. At this stage, employers should review how they calculate the accrual and taking of paid personal/carer's leave for employees.

Background – considering the meaning of a 'day'

Mondelez' enterprise agreement provided for employees who worked 12-hour shifts over a 36-hour week to have 96 hours of paid personal/carer's leave each year. To decide whether this was more or less beneficial than the National Employment Standards (NES) entitlement, the Full Court considered what a 'day', in the context of the '10 days of paid personal/carer's leave' in the Fair Work Act 2009 (Cth), actually means.

The decision – days, not hours

The Full Court decided that a 'day' in the context of personal/carer's leave is a 'working day', not an average number of ordinary hours. So, employees who worked 12-hour shifts over a 36 hour week are entitled to accrue and take 10 lots of their 12-hour working days of personal/carer's leave each year.

The decision considers the statutory entitlement to 10 days' paid personal/carer's leave as a form of income protection. It allows an employee to be absent from work with pay for 10 'working days' – even if a 'working day' is made up of different ordinary hours. This means that all part-time and full-time employees have the same entitlement to be absent from work for 10 of their working days each year, irrespective of the employee's average daily ordinary hours. This will affect how a vast majority of employers have been treating the accrual and taking of paid personal/carer's leave for employees, particularly part-time and shift employees.

As a result of the Full Court's interpretation, the personal/carer's leave entitlement in Mondelez' enterprise agreement was less beneficial than the NES entitlement.