Employers forced to play catch-up on personal leave

Up until August 2019, employees have been entitled to 76 hours personal leave per year. This entitlement was based on a 38 hour working week and intended to allow employees ten 7.6 hour days off per year.

The Federal Court has since ruled that employers have to provide 10 working days of personal leave for every employee per year. A working day is considered to be the portion of a 24 hour day that would otherwise be allotted to working.

This has two major implications:

  • Employees who perform shift work are entitled to 10 days off per year, the length of which is determined by how many hours they ordinarily work in a day. So if they normally work 12 hour shifts, then they are entitled to ten 12 hour days off.
  • Part-time employees are now entitled to the same paid time off for personal leave as a full time employee, where previously personal leave was accrued at the proportion of an ordinary week they worked. For example, an employee who worked 80% of a week would receive 80% of 76 hours personal leave per year.

This decision applies retrospectively as far as the commencement of the Fair Work act in 2009, and employers must now conduct reviews of historical leave accruals to ensure each of their employees has received the full amount of personal leave they are entitled to.

Eloise Wallis, Accountant at AFS & Associates

As well as this, they may owe back-pay where an employee has had to take unpaid leave as a result of insufficient personal leave available.

This decision is going to be appealed in the High Court but as it stands is law.

If you would like assistance with reviewing your historical leave accruals please contact us on 03 5443 0344.