Recent Federal Court Decision: Accrual of Personal/Carer’s Leave

Most employers in Australia follow the practice of calculating personal/carer’s leave entitlements in hours.

On 21 August 2019, the Federal Court of Australia handed down a decision in Mondelez Australia Pty Ltd v AMWU [2019] FCAFC 138 which deals with the method of accruing and taking paid personal/carer’s leave for the purposes of the National Employment Standards under the Fair Work Act 2009.

The Mondelez Case

Mondelez sought a declaration from the Court that entitlements to personal/carer’s leave under its enterprise agreement were more beneficial than under the Fair Work Act.  Mondelez employs permanent full-time staff in a “standard pattern” of 7.2 hours a day, five days per week and a “shift-work pattern” of 12 hours a day, three shifts per week.

The Decision by Federal Court

In the decision, the majority of the Full Federal Court determined:

• Full-time and part-time employees are entitled to 10 working days of paid personal/carer’s leave for each year of employment.
• The leave protects those employees’ income when they are entitled to be absent from work due to illness or injury (or providing care or support to a family or household member who is ill, injured or suffering from an unexpected emergency).
• The leave must be calculated in working days, not hours. A working day is the portion of a 24 hour period that an employee would otherwise be working.
• An employee’s entitlement is expressly based upon the time worked for the employer and is expressly calculated in days.
• For every day of personal/carer’s leave taken, an employer deducts a day from the employee’s accrued leave balance. If an employee takes a part-day of leave, then an equivalent part-day is deducted from the employee’s accrued leave balance.

The effect of the Court’s finding is that an employee can access up to ten working days of personal/carer’s leave for each year of service, regardless of the number of ordinary hours the employee ordinarily works on those days or their pattern of work. Based on the court decision the Fair Work Ombudsman has released advice that all permanent employees are entitled to 10 days of paid personal/carer’s leave for each year of employment.

Employers should use the Ombudsman’s advice as a starting point to review how their business currently accrues and deducts personal/carer’s leave.