Personal Leave decision overturned by High Court

Public news

A High Court majority has rejected union arguments that employees working longer than standard hours are entitled to use those hours as the basis for calculating their entitlement to 10 days paid personal/carer's leave for each year of service.

The ruling by Chief Justice Susan Kiefel and justices Geoffrey Nettle and Michelle Gordon overturns a full Federal Court majority finding last August that two 12-hour shift workers at a Cadbury chocolate factory were entitled to 120 hours of paid personal/carer's leave, rather than leave payments for 10 shifts of 7.6 hours.

Employer Mondelez and Federal IR Minister Christian Porter appealed against justices Mordy Bromberg and Darryl Rangiah's acceptance of the AMWU's interpretation of the National Employment Standards (NES) entitlement at s96(1) of the Fair Work Act, which provides that employees are entitled to 10 days of personal/carer's leave per year of service.

The union held that because the NES mandates a minimum of 10 days and the two employees worked 12-hour shifts, this means they were entitled to 120 hours of paid time off in the year, instead of the 76 hours that Mondelez based on the 12-hour shift workers 38 ordinary hours a week.

In a decision handed down on 13 August 2020, the High Court plurality set aside the full Federal Court judgment and in its place declared that: "The expression '10 days' in s96(1) of the Fair Work Act 2009 (Cth) means an amount of paid personal/carer's leave accruing for every year of service equivalent to an employee's ordinary hours of work in a week over a two-week (fortnightly) period, or 1/26 of the employee's ordinary hours of work in a year. A 'day' for the purposes of s 96(1) refers to a 'notional day', consisting of one-tenth of the equivalent of an employee's ordinary hours of work in a two-week (fortnightly) period."

"The 'working day' construction adopted by the majority in the Full Court (and urged by the union parties in this Court) is not consistent with the purpose of s96 or the stated objectives of the Fair Work Act of fairness, flexibility, certainty and stability," said Chief Justice Kiefel and justices Nettle and Gordon.

Justice James Edelman in a supporting but separate judgment allowed the appeal, ultimately agreeing that the plurality's orders would "have the same legal effect in practice" as different orders he proposed.

Justice Stephen Gageler dissented, finding the appeals should be dismissed.

If you have any questions about leave entitlements, contact the WR team on (08) 8291 2000 or at wr@mtasant.com.au.