The High Court of Australia has overturned the Federal Court’s problematic interpretation of the personal/carer’s leave provisions of the Fair Work Act in the Mondelez v AMWU case. The successful outcome was the result of three years of hard work by Ai Group and Ai Group Workplace Lawyers. Ai Group Workplace Lawyers represented Mondelez in both the Federal Court and High Court proceedings.

The High Court’s decision restores equity and common sense to the calculation of personal/carer’s leave accruals and avoids a $2 billion a year additional cost for employers that would have resulted if the Federal Court’s decision had not been successfully challenged.

The case related to the personal/carer’s leave entitlements of 12-hour shift workers at the Mondelēz International plant in Claremont, Tasmania where Cadbury chocolate is manufactured.

In particular, the arguments in the case revolved around the meaning of the phrase “10 days of paid personal/carer’s leave” in section 96 of the Fair Work Act.

The Federal Court’s decision

In the decision that has been overturned by the High Court, the Federal Court adopted an interpretation that would have meant that:

• Full-time employees who work an average of 38 hours per week on the basis of 12- hour shifts would accrue 120 hours of personal/ carer’s leave per year, rather than the 76 hours per year that aligns with industry practice; and
• Part-time employees would accrue the same amount of personal/carer’s leave per year as full-time employees, regardless of how many days per week they work.

In evidence filed in the High Court case, Ai Group’s Chief Economist estimated that if the decision of the Full Federal Court was not overturned, the cost to employers would have been more than $2 billion a year.

The High Court’s decision

On 13 August 2020, the High Court of Australia in a 4-1 judgment granted the appeals by Mondelēz International and the Australian Government against the Federal Court’s decision.

The High Court’s judgment preserves widespread industry practice where personal/carer’s leave accruals are calculated in hours on the basis of an employee’s ordinary hours of work. 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 leave per year.

The Court’s judgment ensures equity amongst full-time and part-time employees, regardless of the length of their ordinary shifts.

If you would like more information about the entitlements to personal/carer’s leave, please contact Ai Group’s Workplace Advice Service on 1300 55 66 77.

Alternatively, if you would like advice about managing employees’ personal/carer’s leave entitlements, or drafting such entitlements into your enterprise agreement, policies or employment contracts, please contact your local employment, workplace and industrial lawyer in Sydney, Newcastle, Wollongong, Melbourne or Brisbane or contact Ai Group Workplace Lawyers at Ai Group Workplace Lawyers here.