In a decision that is welcome news for employers (and HR people, accountants, bookkeepers and payroll people alike!), the High Court earlier this month provided some much needed clarification in terms of how paid personal/carer’s leave is to be accrued and taken.
The decision overrules an earlier controversial decision by the Federal Court [Mondelez Australia Pty Ltd v AMWU & Ors [2020] HCA 29], and confirms that employees (other than casual employees), are entitled to 10 ‘notional days’ of personal leave a year by reference to their ordinary working hours. To a large extent this confirms and gives the green-light to how provisions relating to personal/carer’s leave have been interpreted and applied by most employers since the introduction of the National Employment Standards more than 10 years ago.
Without going into the detail of the previous (now over-ruled) decision, the High Court of Australia has clarified that:
>> the entitlement to 10 days of personal/carer’s leave under the National Employment Standards (NES) is calculated based on an employee’s ordinary hours of work, not working days
>> 10 days of personal/carer’s leave can be calculated as 1/26 of an employee’s ordinary hours of work in a year.
By way of example (taken from the Fair Work website):
Suzanne is a full-time employee who works 38 hours per week, 5 days a week. Rebecca is a part-time employee who works an average of 19 hours per week, working a 5-day fortnight. Suzanne gets 76 hours of paid sick and carer’s leave per year. Rebecca gets half of Suzanne’s paid sick and carer’s leave (38 hours) per year as she works half the hours Suzanne works.
Our understanding is that most accounting/payroll systems calculate personal/carer’s leave in the manner now clarified by this decision, though employers are advised to review the detail of the decision and check to ensure compliance.
For additional information refer the Fair Work website and/or seek support from your bookkeeper, accountant or friendly HR person (hello?!) as required.
Note that this article includes general information only and is not intended as legal advice.