On the 21st of August 2019, the Full Federal Court of Australia handed down a decision in relation to accruing and taking of paid personal/carers leave in Mondelez Australia Pty Ltd v AMWU  FCAFC 138.
This decision has a profound impact on how many employers in Australia currently accrue and deduct personal/carers leave for employees.
Below is an overview of what you need to know.
What was the decision?
- Full time and part time employees are entitled to 10 working days of paid personal/carer’s leave for each year of employment. The important word here is days. Many employers had previously been accruing 76 hours of paid personal/carers leave per year for full time employees and pro rata for part time employees, based on their hours of work. The ruling has now stated that this should be ‘days’ not hours. Essentially, this means if an employee works a 12 hour shift and is unable to attend work due to illness or injury, he/she will be deducted 1 day personal/carers leave, not 12 hours as many employers had previously been applying. In addition to this, part time employees are also entitled to receive 10 days, not pro rata based on their hours of work.
- An employee’s entitlement should accrue in days, meaning that every 5.2 weeks, an employee accrues an entitlement to another full day of leave.
- If the employee takes a part-day of leave, then an equivalent part-day is deducted from the employee’s accrued leave balance.
Do I need to make changes now?
The recent decision reflects the current state of the law. Therefore, technically yes you need to ensure you are applying the current interpretation. There may be an application to appeal the decision to the High Court, however this has not yet been confirmed.
Many payroll systems are set up with rules regarding the automatic accrual of personal/carers leave in line with the National Employment Standards. Liquid HR recommends you contact your payroll provider to discuss this matter with them and their position on the changes.
Have further questions?
Please don’t hesitate to reach out to us on 1300 887 458 or email@example.com, we will be more than happy to answer any questions you may have.