Today a majority of the High Court overturned the Full Federal Court’s decision in Mondelez
Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union known as the Australian Manufacturing Workers Union (AMWU) & ORS 1
(‘the Cadbury Decision’).
Full Federal Court Decision
The Cadbury Decision concerned the calculation of paid personal/carer’s leave under
section 96(1) of the Fair Work Act 2009 (Cth) (‘the Act’). In summary, the facts are:
Cadbury shift workers work shifts of either 8 or 12-hour shifts.
The two employees named in the proceedings worked a 36-hour week averaged
over a four-week cycle. Their ordinary shift length was 12 hours, they worked an
average of 3 shifts per week.
Under the terms of the Enterprise Agreement these employees accrued 96 hours of
personal/carer’s leave per annum. They are entitled to 10 days personal/carer’s
leave per annum and for each shift they did not work due to illness/injury or carer’s
responsibilities, they were deducted 12 hours from their accruals.
The majority of the Full Federal Court held that a “day” under s 96(1) means the portion of
time worked by an employee in any 24-hour period. Therefore, a ‘working day’ is the period
of time the employee worked in that 24-hour period. Accordingly, the Full Federal Court held
that the two named employees in the proceedings were each entitled to 10 periods of 12
hours of paid personal/carer’s leave being a total of 120 hours per annum.
The High Court Decision
The High Court rejected the Full Federal Court’s ‘working day’ construction on the basis that
it is not consistent with the purpose of the Act and would lead to inequalities, unfairness and
uncertainty between employees who performed different patterns of work 2
The High Court set aside the order of the Full Federal Court and declared that 3 :
“The expression ’10 days’ in s 96(1) of the Fair Work Act 2009 (Cth) means an
amount of paid personal/carer’s leave accruing for every year of service equivalent to
an employee’s ordinary hours of work in a week over a two-week (fortnightly) period,
or 1/26 of the employee’s ordinary hours of work in a year. A ‘day’ for the purposes of
s 96(1) refers to a ‘notional day’, consisting of one-tenth of the equivalent of an
employee’s ordinary hours of work in a two-week (fortnightly) period.”
What Now For Employers?
Today’s High Court decision makes it clear that the calculation of personal/carer’s leave is
based on an employee’s ordinary hours of work. The ordinary hours of work are calculated
on a weekly or fortnightly or annual basis, and is not based on the hours of a single shift.
For example, an employee working 38 hours per week would accrue 76 hours of paid
personal/carer’s leave per annum, no matter the variation in the length of shifts performed by
the employee. In this example, the employee would have 1 day (i.e. 7.6 hours) of paid
personal/carer’s leave deducted from their accruals for each day of personal/carer’s leave
taken.
Employers must now ensure the way they accrue and pay personal/carer’s leave complies
with this decision.
If you have any questions about this or any other employment or workplace matter, please
contact us on (02) 9058 4930.
1 Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the
Australian Manufacturing Workers Union [2019] FCAFC 138
2 Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the
Australian Manufacturing Workers Union; Minister for Jobs and Industrial Relations v Automotive, Food, Metals, Engineering,
Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union [2020] HCA 29 AT [41]-[43]
3 Ibid at page 1, Order 2
2
This article should not be considered legal advice. Please contact us should you require legal advice on any
aspect of employment law on 02) 9058 4930