Good news for employers - common sense prevails
The High Court has ruled that the method of accruing and taking paid personal/carer’s leave under the National Employment Standards, is calculated based on an employee’s ordinary hours of work, not working days.
The High Court rejected the meaning of ‘working day’ and the decision of the Full Federal Court in Mondelez Australia Pty Ltd v AMWU was overturned by the High Court on 13 August 2020.
Change in law due to Full Federal Court's decision, 21 August 2019
It’s been almost a year since the law changed requiring personal/carer’s leave to be calculated and recorded as accrued ‘days’ not ‘hours’. The change in law impacted on the way leave accrued and was taken, particularly for part-time employees.
Part-time employees
Before the High Court decision, (21 August 2019 to 12 August 2020), a part-time employee’s personal/carer’s leave entitlement was 10 days. The same as a full-time employee.
From 13 August 2020, a part-time employee accrues their entitlement to personal/carer’s leave on a pro-rata basis (in hours, not days).
Employers can now return to MYOB, XERO and other payroll systems for calculating their part-time employee’s accrual and recording the taking of paid personal/carer’s leave. It is no longer necessary to keep a separate spreadsheet for the purpose of calculating and recording leave for your part-time employees.
National Employment Standards
Under the National Employment Standards the entitlement to
10 days personal/carer’s leave:
- is calculated on an employee’s ordinary hours of work (not working days)
- 10 days personal/carer’s can be calculated fortnightly (1/26) of an employee’s ordinary hours of work in a year.
The Fair Work Information Statement on the Fair Work Ombudsman website has been updated to reflect the High Court’s decision.
The High Court’s decision is now the law (summarised below)
- Permanent employees (full-time and part-time) will accrue personal/carer’s leave based on their ordinary hours of work.
- Hours of work may be averaged over a two-week period (for standard hours) or over 12 months (for non-standard hours).
- Part-time employees accrue personal/carer’s leave on a pro-rata basis. Calculated on the part-time employee’s average ordinary hours of work (not 10 days of personal/carer’s leave).
- When an employee takes personal/carer’s leave, the number of ordinary hours taken should be deducted from their leave accrual balance (not a fraction of a day).
It’s the decision all employers have been waiting for. Thank goodness common sense prevails.
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