High Court Decision Overruled: Paid Personal Leave Anomaly

On Thursday 13 August the High Court delivered a long awaited judgment, which clarifies the way in which personal/carer’s leave accrues and can be taken by part time workers.

High Court Ruling: Paid Leave Entitlements

The High Court Decision

By majority, the High Court overruled the previous Federal Court decision (handed down in August last year in relation to Mondelez Australia Pty Ltd v AMWU) where it was controversially decided that an employee’s entitlement to personal/carer’s leave would be expressly ‘calculated in working days, not hours.’

The High Court’s determination has taken us full circle and we are back to calculating personal/carer’s leave on the basis of ordinary hours of work, however calculating this across a yearly period.

10 ‘Notional Days’

The High Court determined that all employees are entitled to what has been termed as 10 ‘notional days’ (otherwise expressed as an estimated 10 days’ worth) of personal/carer’s leave each year. However, an individual’s precise accrual or ‘banking of time’ will be directly related to the number of ordinary hours they have actually worked.  The method for calculating this across a yearly period further allows for a more simplistic calculation when factoring those employees who work varied hours (i.e. shift workers).

As a further explanation, the court found that “the expression of ’10 days’ in section 96(1) of the Fair Work Act 2009 (Cth) means 1/26 of the employee’s ordinary hours of work in the year of service with their employer.” This finding is based on a full time employee accruing one day of personal/carer’s leave in an average 10 day (or 76 hour) fortnight.

Breakdown of an Individual’s Personal/Carers Leave Accrual

To further break this down, please refer to the table below which compares an individual’s personal/carer’s leave accrual (over the course of a year), when employed in a full time, part time or shift worker capacity.

Personal carer's leave accrual table

General Consensus of the Ruling

The general consensus is that the recent decision by the High Court has been welcomed by employers who will no longer be plagued by the payroll and administrative difficulties in relation to accrual calculations and the great disparity that the previous ruling caused.

Need Help?

If you have questions or concerns in relation to this decision and how it might apply to your particular situation, please don’t hesitate to contact us for assistance. This is a complex area of employment law and we have a team of experienced specialists at Allan Hall HR dedicated to helping clients work through these sorts of issues. If you need any assistance, please don’t hesitate to contact our support team on 1300 675 393 or online at www.allanhall.com.au/hr.