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Summary of Decision

A majority decision of the Full Court of the Federal Court in Mondelez v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (“Mondelez v AMWU”) recently confirmed that the entitlement to personal/carer’s leave provided by the National Employment Standards is ten days, which cannot be averaged out to any number of hours based on the employee’s ordinary hours per week.1

The matter in Mondelez v AMWU involved employees in two different groups of full-time employees. One group worked a five-day working week of 7.2 hours per day, totalling 36 hours per week; the second group worked a three-day working week of 12 hours per day, totalling 36 hours per week. The employer, Mondelez, argued that employees in both groups accrued a total of 72 hours per annum of personal/carer’s leave.

The majority of the Full Court rejected Mondelez’s argument and noted that the entitlement to personal/carer’s leave is not an entitlement to payment of a certain amount of money each year, but an ‘income protection scheme’ to ensure than an employee can be absent on a day due to illness or injury (or for caring responsibilities) without loss of ordinary hours pay for that day. 

In the scenarios discussed in Mondelez v AMWU, an employee absent due to illness or injury on a 12 (ordinary) hour shift is entitled to payment for all 12 hours, and this constitutes one day of personal/carer’s leave.  The majority held that Mondelez’s arguments must fail, as if the arguments were correct, the employees who work 12-hour shifts would be entitled to less than ten days personal/carer’s leave per year if 12 hours was deducted from a 72-hour balance of leave.  Similarly, if they were absent from a 12-hour shift and were only paid for 7.2 hours, they would not receive a day’s income.  These results were found contrary to the intended ten-day income protection scheme of the National Employment Standards.

What does this mean for employers?

Enterprise Agreements

When drafting enterprise agreements, employers must ensure that the agreement entitlement to personal/carer’s leave (and other leave types) is no less favourable than the National Employment Standards.

Mondelez v AMWU confirms the earlier Fair Work Commission case of Australian Workers Union v AstraZeneca Pty Ltd, where it was held that an enterprise agreement providing an accrual of ’76 hours’ of personal/carer’s leave per annum was inconsistent with the National Employment Standards, as employees worked varying shift lengths, including a 12-hour roster.2

For this reason, our recommendation remains in place that personal/carer’s leave should be defined in terms of ‘days’; and annual leave defined in terms of ‘weeks’.

Payroll

We recommend employers review their payroll systems to ensure that all permanent employees are accruing and being paid all leave in accordance with the minimum entitlements set out in National Employment Standards.

Casual employees

The Construction, Forestry, Maritime, Mining and Energy Union has recently launched a class action case against Workpac in relation to employees who it says have been incorrectly classified as ‘casual’ employees and who therefore may be owed leave entitlements, such as personal/carer’s leave.

As advised following the decision of Workpac Pty Ltd v Skene (see our previous EMA note),3 we recommend that employers review the nature of their casual employees’ employment to assess their risk.

Require further information/assistance?

If you require further information or advice, please contact one of our consultants.


1 [2019] FCAFC 138.
2 [2018] FWC 4660.
3 [2018] FCAFC 131.

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