In a 4 – 1 decision on Thursday 13 August 2020, the High Court overruled the original decision of the Full Federal Court in the landmark case of Mondelez. In its decision, a majority of the High court agreed that ‘10 days’ of paid personal /carer’s leave each year as expressed in s 96(1) of the Fair Work Act 2009 (Cth), refers to “notional” days and not “working” days as per the union parties contention.
The decision essentially takes employers back to calculating personal /carer’s leave on an employee’s ordinary hours of work rather than days.
Here’s how paid personal leave is to be accrued
According to the High Court, employees are entitled to 10 ‘notional days’ of paid personal / carer’s leave for every year of service.
The duration of a ‘notional day’ is determined by identifying 1/10th of an employee’s ordinary hours over a two-week period (1/26th of their total ordinary hours over the course of a year).
Examples:
- A full time employee who works a 38 hour week (76 hour fortnight) will accrue the entitlement to paid personal /carer’s leave on 7.6 hours (this represents 1/10th of the employee’s ordinary hours over a two week period). Over a year, the employee will accrue 76 hours of paid personal /carer’s leave (10 x 7.6 hour notional days).
- A part time employee who works a 19 hour week (38 hour fortnight) will accrue the entitlement to paid personal/carer’s leave on 3.8 hours (this represents 1/10th of the employee’s ordinary hours over a two week period). Over a year, the employee will accrue 38 hours of paid personal /carer’s leave (10 x 3.8 hour notional days).
If an employee changes the basis of their employment (e.g. from full-time employee to part-time), the employee would not lose any accrued leave, however future rate of personal /carer’s leave accrual will vary based on the employee’s new ordinary hours of work.
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