You can have your chocolate and your personal leave too!

Key Points

• Last week the Full Federal Court of Australia handed down a decision to two Cadbury chocolate workers that full-time and part-time employees are entitled to 10 working days of paid personal/carer’s leave for each year of employment

• A working day is the portion of a 24 hour period that an employee would otherwise be working ie if normally a shiftworker working a standard 12 hour day, the shiftworker will be entitled to 10 (12 hour) working days of personal leave

• The Fair Work Ombudsman is currently reviewing and updating its advice in light of this decision

Background

Pursuant to section 96(1) of the Fair Work Act 2009 (Cth) (the Act), permanent employees are entitled to 10 days paid personal/carer’s leave each year. For a standard 38 hour working week, this equates to 10 days of personal/carer’s leave at 7.6 hours per day.  
 
The Case
 
The case of Mondelez Australia Pty Ltd v AMWU [2019] FCAFC 138, was an argument between the Australian Manufacturing Workers Union (AMWU), on behalf of the two Cadbury workers, and the food manufacturing employer, Mondelez Australia Pty Ltd (Cadbury). The AMWU argued that as the two employees ordinarily worked 12-hour shifts, they were entitled to 10 days of personal/carer’s leave at 12 hours per day. Conversely, Cadbury’s argued that like other employees who worked 36 hours per week, they were only entitled to 10 days of personal/carer’s leave at 7.2 hours per day.
 
The Federal Court ruled in favour of the AMWU, ruling that the meaning of the word “day” for the purposes of section 96(1) of the Act is “the portion of a 24 hour period that would otherwise be allotted to working”¹. Accordingly, the 10 “days” personal/carer’s leave entitlement is based upon the ordinary hours an employee would have worked, if not for being absent for the illness or injury².
 
The Effects
 
What might be a heralded decision by the two Cadbury chocolate workers, the Australian Manufacturing Workers Union, and the rest of the Cadbury workers, the decision could have significant cost implications for a large number of Australian employers, particularly those who conduct shiftwork. Given the manufacturing industry is already being forced to innovate and adopt significant changes or risk perishing, this decision may add to the falling number of manufacturers in Australia.
 
Example
 
If a part time employee normally works 22.8 hours per week, worked as:

• 8 hours on Mondays;
• 6.8 hours on Tuesdays; and
• 8 hours on Wednesdays;

and the employee takes personal leave on a Monday they are entitled to the entire “day” of Monday’s ordinary eight hours as personal leave, not just the pro rata amount of 7.6 hours based on working three “days” ie 7.6 hours, per week.
 
Takeaway
 
It is too soon to know if Cadbury’s will appeal the decision to the High Court of Australia, however, the Fair Work Ombudsman is reviewing and updating its advice following this ruling, and has declared that the Full Federal Court’s decision reflects the current state of the law.
 
In light of the decision, employers should review their own payroll systems to ensure they are calculating leave in accordance with the decision. If employers are not sure how personal/carer’s leave entitlement is being calculated, you can speak to one of our Workplace Relations team members today, who are specialists in interpreting and applying employment case law and legislation!

¹ Mondelez Australia Pty Ltd v AMWU [2019] FCAFC 138 [93] (Bromberg and Rangiah JJ).
² Ibid [203].

Post by Warwick Ryan and Saasha Greeney