In the decision of Mondelez v AMWU last week, a full federal court majority held that full-time and part-time employees are entitled to 10 ordinary ‘working days’ of personal/carer’s leave per year under the Fair Work Act, regardless of how many hours the employees work. The decision is therefore of relevance to employers whose employees work their ordinary hours over an averaging arrangement, whereby they don’t work the same ordinary hours each day.
Mondelez had argued that its shift workers, who worked their ordinary hours over three 12-hour shifts per week (36 ordinary hours) should accrue 72 hours of personal leave per year. Mondelez argued that leave should be based on 10 days’ worth of 7.2 ordinary hours.
Ordinary hours are traditionally 38 hours per week for a full-time employee, generally worked in a pattern of 7.6 hours over 5 days of the week. 7.6 hours has therefore been understood as the standard workday. Where ordinary hours for full-time employees are 36 hours per week, as was the case in Mondelez, this equates to a 7.2 hour standard work day.
The full federal court majority (Bromberg, Rangiah JJ, O’Callaghan J dissenting), rejected the interpretation of personal leave as being based on a standard 7.2 hour work day. The majority considered that such an interpretation would be inconsistent with the natural and ordinary meaning of the words used in section 96(1) of the Fair Work Act. This is contentious, as the majority’s reasoning is at odds with the Explanatory Memorandum to the Fair Work Act.
The majority therefore held that all employees are entitled to 10 ordinary working days of personal/carer’s leave per year, regardless of how many ordinary hours are worked in a particular day. In this instance, the outcome was that the employees were entitled to 10 days of 12 hours each – a total of 120 hours of personal leave per year.
The decision, if not reversed by the high court or by legislative change, may require employers to review arrangements relating to employees working non-standard ordinary hours.
The majority's decision represents a significant change for many employers' current leave accrual practices and does little to resolve the increasing uncertainty around leave provisions under the Fair Work Act.
Members seeking further information are encouraged to contact the IR department on (03) 9411 4560.