In a decision that highlights ongoing issues with the National Employment Standards (NES), the Federal Court has handed down a controversial decision granting Cadbury employees who work 12 hour shifts, 120 hours of personal/carers leave despite only working a 36 hour week.
Under the NES employees are entitled to 10 days personal/carer’s leave which accrues progressively based on their ordinary hours of work.
The NES does not define what a day is, however, the relevant explanatory material which formed part of the Fair Work Bill identified that the entitlement would be based on 76 hours of leave for full time employees irrespective of their work arrangements.
Where non standard work arrangements are performed, most employers relied on this material in calculating leave entitlements. This generally occurs by providing the employee with 76 hours personal/carer’s leave per year and paying them for the ordinary hours worked on that day. In the case of employees working 12 hours shifts, the employee would then be entitled to 6.3 days of personal/carer’s leave on full pay.
However, in this matter the relevant union challenged that approach, arguing that the employees, who worked a 36 hour week made up of three 12 hour shifts, should be entitled to 10 days personal/carer’s leave paid at the full 12 hours, resulting in a total entitlement of 120 hours.
In a split decision, two of the judges accepted the union’s argument identifying that the entitlement to personal/carer’s leave is 10 days without loss of pay, irrespective of the number of ordinary hours worked on that day. Their reasoning also identifies that this approach should apply to part time employees who work differing number of hours each day.
Employers who may be affected by this decision are encouraged to seek advice, with the potential impact being dependent on a range of factors. Members are encouraged to contact our Employee Relations Advice Centre in the first instance on 9365 7660.
However, this decision is unlikely to be the last word on the matter. In a dissenting judgement the third judge accepted the argument of the employer which may give grounds for a further appeal. CCIWA has also previously raised this issue with the Federal Government which intervened in the case in support of the employer. We will therefore be using this decision to reinforce the need further changes to the NES.
As always, the team are well equipped to provide support and guidance to our employer members in this area. Contact them today on email@example.com