All in a (notional) day's work: High Court has final say on entitlement to paid personal and carer's leave

In a landmark case on how many 'sickies' a person will be able to take per year, the High Court has today upheld the appeals of Mondelez Australia Pty Ltd (Mondelez) and the Commonwealth Minister for Jobs and Industrial Relations in relation to the proper calculation of the entitlement to take paid personal or carer's leave under s 96(1) of the Fair Work Act 2009 (Cth) (FW Act).

Section 96(1) of the FW Act provides that an employee is entitled to 10 days of paid personal leave or carer's leave for each year of service with their employer.

The case was an appeal from a decision of the Full Federal Court last year, in which a majority found that a 'day' is the portion of a 24-hour period that would otherwise be allotted for work (a 'working day'), and not based on the employee's average daily working hours in a week (a 'notional day'). As a result of the Full Federal Court's decision, two Mondelez employees who worked 12-hour shifts were entitled to 120 hours of paid personal leave per year, rather than the 96 hours provided for under their enterprise agreement.

Implications of the High Court's decision for the Victorian public sector

The current state of the law is reflected in the majority decision of the High Court discussed below.

The High Court's decision confirms that all employees (which would include Victorian public sector employees covered by the Fair Work Act 2009) will accrue personal and carer's leave based on their ordinary hours of work.

For full-time employees whose ordinary hours of work will average 76 hours to be worked over a 10 day fortnight (eg employees covered by Victorian Public Service Enterprise Agreement 2016), a day's personal leave would be 7.6 hours and an employee is entitled to take 10 such days of personal leave per year.

For Victorian public sector employees engaged in shift work or part-time work, who are more likely to work different ordinary hours on different days, a day's personal leave will be calculated on the basis of 1/10th of the equivalent hours of work in a two week period, or 1/26th of the employee's ordinary hours of work in a year. For example, for a part-time employee who works an average of 38 hours to be worked over a 10 day fortnight, a day's personal leave would be 3.8 hours and an employee is entitled to take 10 such days of personal leave per year.

Importantly, the High Court confirmed that employees will not be paid personal or carer's leave for hours they would have ordinarily performed as overtime. However, Justice Edelman confirmed in his judgement that the employee would usually be able to refuse to work overtime on a day of paid personal or carer's leave, for a reason such as illness, where overtime is scheduled.

We provide examples of common working arrangements of employees in the Victorian public sector, and the implications of the High Court's decision on paid personal or carer's leave, in the table below:

Summary of High Court's decision

A majority of the High Court (Chief Justice Kiefel and Justices Nettle and Gordon) found that the expression '10 days' in s 96(1) of the FW Act means an amount of paid personal or 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 period. The majority further explained that because patterns of work do not always follow two-week cycles, the entitlement to paid personal or carer's leave could be calculated as 1/26th 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 1/10th of the equivalent of an employee's ordinary hours of work in a two-week period. The majority made an order in the same terms which overturned the Full Federal Court's preferred interpretation of a 'working day'.

In a separate judgment, Justice Edelman found that the expression '10 days' means 1/26th of the employee's ordinary hours of work in the year of service with their employer. Justice Edelman considered that s 96(1) should be interpreted in a manner that accommodated employees who have different hours of work from fortnight to fortnight, although ultimately concluded that the order made by the majority would have the same legal effect in practice as his interpretation.

In a dissenting judgment, Justice Gageler supported the Full Federal Court's decision and found that the expression '10 days' means '10 periods each of 24 hours'.

You can read the full decision of the High Court and the High Court's summary of the decision.

Contact our team

VGSO's Workplace Relations and Occupational Safety Branch provides advice to employers across the Victorian Public Sector on all aspects of workplace relations and occupational health and safety

Frances Anderson
Assistant Victorian Government Solicitor, Workplace Relations and Occupational Safety
Phone: 8684 0933
Mobile: 0475 834 049
Email: frances.anderson@vgso.vic.gov.au

The information is of a general nature only and does not convey or contain legal advice. If you would like to obtain legal advice in relation to any matter discussed on this page, please contact us.