28 August 2020

In an important and relieving decision for employers, the High Court has overturned last year’s Mondelez leave decision relating to Cadbury chocolate factory workers which caused them to be entitled to 120 hours of sick leave.

The earlier decision had caused great concern to the business community as it would have created inequities between employees and exposed employers to significantly increased costs. For example, a part-time employee who worked four days per week would still have been entitled to “10 days of paid personal/carer’s leave” despite this being greater than their working period.

However, the interpretation adopted by the High Court ensures that all employees are entitled to take up to two weeks off work each year for personal/carer’s leave regardless of how many ordinary hours an employee works in that two-week period.

This means that a full-time employee who works 38 ordinary hours per week is entitled to 76 hours of personal/carer’s leave per year and a part-time employee who works 20 hours per week is entitled to 40 hours of personal/carer’s leave per year.

The decision handed down confirms the traditional method of accruing and taking paid personal/carer’s leave under the National Employment standards (NES).

In the decision the High Court clarified that:

• the entitlement to 10 days of personal/carer’s leave under the NES is calculated based on an employee’s ordinary hours of work, not “working days” irrespective of their pattern of work,
• 10 days of personal/carer’s leave is calculated as 1/26 of an employee’s ordinary hours of work in a year.

The decision has been welcomed as providing certainty for all Australian employers with non-standard shift arrangements and those that employ part-time employees, across as range of industries such as those in the manufacturing, nursing, mining, building and construction and transport and distribution.

The Fair Work Ombudsman has advised that they have updated their leave information sheets and website material to reflect the outcome of this decision.

For further information please contact the MEA Workplace Relations Team on 1300 889 198.