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CMSolutions News Flash – High Court majority has rejected a Federal Court Decision Re: Personal Leave

CMSolutions News Flash for Federal Members Only

The High Court majority has rejected a Federal Court Decision that found employees working longer than standard hours are entitled to use those hours as the basis for calculating their entitlement to 10 days paid personal/carers leave for each year of service.

Chief Justice Susan Kiefel and Justices Geoffrey Nettle and Michelle Gordon ruling 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.

Federal IR Minister Christian Port and Employer Mondelez appealed against the Federal Court ruling.

The High Court set aside the full Federal Court judgement 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 s96(1) refers to a ‘notional day’, consisting of one-tenth of the equivalent or 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.

This decision resolves the somewhat “odd” situation which arose from the Federal Court ruling where part time employees were able to accrue more Personal/Carer’s Leave than full time employees. This was clearly not the intent of the legislation and the Court has now returned us to “life as normal”.

What does this mean for members?

Essentially it means that what we were accruing for more than 20 years continues to be correct. The calculation for the accrual of leave can result in no full time employee accruing more than 76 hours leave in a year. A part time employee will accrue a proportion of that amount based upon the hours they work over a year.

If you had changed the way you were accruing Personal/Carer’s leave as a result of the Federal Court decision, you may now disregard those changes and revert to your former practice.

CMSolutions has been providing specialist advice to Community Not-for-profits for almost 50 years. We know Community Organisations inside and out, and our Members know we are only a phone call away.

If you require assistance with calculating leave for your employees, our friendly team are here to help.

Call 1300 007 110 or 07 3852 5177 or email info@cmsolutions.org.au for more information.