Q. What are all the employment lawyers banging on about today?
A. The High Court has just handed down its decision in the Mondelez case.
Q. What is the Mondelez case?
A. It’s a case about how much personal/carer’s leave employees are entitled to under the National Employment Standards (NES).
Q. You needed to have a case about that? I’m confused. Doesn’t the NES say that employees get 10 days of personal/carer’s leave per year?
A. Yes, that is what the NES says. But it has been unclear what 10 days actually means. For a long time employers thought that 10 days meant 76 hours, and that the entitlement was pro-rated based on the number of ordinary hours an employee worked. So full-time employees were entitled to 76 hours of personal/carer’s leave per year of service and part-timers to a pro-rata amount. Then the Full Court of the Federal Court handed down a decision in the Mondelez case which changed that understanding.
Q. What did the Full Court of the Federal Court decide?
A. It decided that personal/carer’s leave is correctly accrued (and taken) in days and not hours, and that everyone gets 10 days.
This meant that part-time employees were entitled to 10 days of personal/carer’s leave just like full-time employees, rather than a pro-rata amount, regardless of how many hours per week they worked.
Employees who worked long shifts, for example shifts of 12 ordinary hours, were also entitled to 10 days of personal/carer’s leave per year of service. This meant that they received the equivalent of 120 hours of personal/carer’s leave, which is quite a bit more than what an employee working a standard 7.6 hour working day would get.
It was all a bit confusing so the employer appealed to the High Court. And today the High Court handed down its decision.
Q. So what did the High Court decide?
A. The High Court decided that the NES entitlement to 10 days of personal/carer’s leave is an amount of leave equivalent to an employee’s ordinary hours of work in a fortnight, or 1/26 of an employee’s ordinary hours of work in a year. This means that a full-time employee who works 38 ordinary hours per week is entitled to the equivalent of 76 hours of personal/carer’s leave per year of service, regardless of how long their shifts are. So, a full-time employee who works their 38 ordinary hours over a standard 5-day work week accrues the same amount of personal/carer’s leave as a full-time employee who works longer shifts over fewer days (such as an employee who works their 38 hours over 4 days).
Q. What about part-time employees?
A. They are back to a pro-rata entitlement. For example, if a part-time employee works 2 days per week, they accrue 4 days of personal/carer’s leave per year of service, because that is equivalent to the ordinary hours they work in a fortnight.
Q. Does this apply to everyone?
A. The High Court was interpreting the NES entitlement to personal/carer’s leave. This decision applies to full-time and part-time employees whose entitlement to personal/carer’s leave comes from the NES. If an employee is entitled to a greater amount of personal/carer’s leave under an enterprise agreement or a contract, then they are still entitled to the greater amount.
If you are an employer and have any questions about employee entitlements, or whether you need to update your employment contracts as a result of this decision, please contact the team at Justitia on (03) 8621 4500 or firstname.lastname@example.org