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Fairwork have updated their website with further information and examples. https://www.fairwork.gov.au/library/k600601_paid-sick-carer-s-leave-frequently-asked-questions The Morrison government and the Employer have both applied to the high court to appeal the decision. At this time we will not be making changes to our software. |
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On 21 August 2019, the Full Federal Court of Australia handed down a decision in Mondelez Australia Pty Ltd v AMWU [2019] FCAFC 138. The decision deals with the method of accruing and taking paid personal/carer’s leave for the purposes of the National Employment Standards under the Fair Work Act 2009. |
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You may/may not be aware of a significant decision made by the Federal Court last week in relation to
sickto sick/personal leave entitlements under the Fair Work Act 2009.
The entitlement to sick/personal leave under the Fair Work Act 2009 is 10 days per year. As such, the
common the common approach when it came to accruing personal leave entitlements was to accrue 76 hours per
year per year (based on the presumption that 76 hours equates to 10 days).
In the case of Mondelez v AMWU, the Federal Court decided that 10 days = 10 days. Not 76 hours but 10 DAYS. This has a couple of flow-on effects for employers (and no doubt some serious headaches when trying to configure your software accordingly). The 2 key amendments for employers will be:
1. For employees who work ordinary hours > 7.6 per day, they will have more "hours" to accrue. For example, Maria works 4 x 9.5 hour days each week (=38 hours per week) and Amy works 5 x 7.6 hours per day (= 38 hours per week). Both Maria and Amy accrue 10 DAYS of sick/personal leave each year and if this is converted to hours, – as most if not all payroll software accrues the entitlements in hours like annual leave – Maria accrues 95 hours per year and Amy accrues 76 hours per year. This gets even trickier if Maria worked 3 x 10 hour days and 1 x 8 hour day – if Maria takes a 10 hour day as personal leave, this is 1 DAY. If Maria takes the 8 hours day as personal leave, this too is 1 DAY. However, each day has a different amount of hours.
2. Part-time employees are also entitled to 10 days per year. So an employee working 3 x 8 hour days per week (24 hours) is also entitled to 10 days per year.
There may/may not be a flow-on effect from this decision where employers may be liable for backpays (for example where a 12 hour per day shift worker was only paid 7.6 ordinary hours or only accrued 76 hours per year or where a PT employee has accrued 10 days per year pro-rata). There has been no determination regarding this matter. Furthermore, Mondelez are appealing the decision so there may be another outcome in the future however as this case took over 18 months to decide, it may take just as long to hear the appeal so please don’t wait for the appeal!
Whilst I have a lot more to say about this case and how much of a nightmare it is for payroll personnel, I will leave you all to contemplate how you are going to configure your software and pay sick/personal leave entitlements based on the decision last Thursday – enjoy!
Kind Regards,
Maria Nikoletatos
Chief Knowledge Officer
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