Another change in employee leave accruals

The High Court of Australia recently outlined the latest rulings in regards to the calculation of an employee’s personal/carer’s leave. The summary revealed that a majority of the High Court rejected the ‘working day’ construction and instead held the view that what is meant by a ‘day’ or ’10 days’ must be calculated in relation to the ordinary hours of work of the employee.

The summary comes in response to the Federal Court’s 2019 ruling which found that the Fair Work Act’s minimum 10 days of paid personal leave should be given to permanent employees regardless of the number of days worked per week or number of hours worked per day.

The judgement of the High Court ensures equity among full-time and part-time employees, and among eight-hour and 12-hour shift workers. In summary:

  • A full time employee who works 38 ordinary hours per week is entitled to 76 hours of personal/carer’s leave per year, where as;
  • A part-time employee who works 20 hours per week is entitled to 40 hours of personal/carer’s leave per year.

Full time employees remain entitled to 10 days of personal/carer’s leave per year whilst the leave is calculated prorata for part-time employees. This can be calculated as 1/26 of the employee’s ordinary hours of work in a year.

Previously, both full time and part-time employees would have been entitled to 10 full days of leave per year despite a significant difference between the ordinary hours worked per week.

 

The ruling of the High Court is considered a win for employers.

If the Federal Court’s interpretation of ‘10 days of paid personal/carer’s leave’ was upheld, many businesses would have been hit with a major cost implication.

As an employer, If you changed how your employee’s personal/carer’s leave operated following the Federal Court’s ruling in 2019, you should update your payroll system accordingly. Employers should also communicate the outcome of the High Court’s decision with their team to avoid any potential confusion.

 

If you have any questions in regards to personal/carer’s leave, please contact our office on 03 5443 0344 or email us at afs@afsbendigo.com.au