Paid personal leave: now accrued in hours

On 13 August 2020, the High Court of Australia handed down a decision clarifying how paid personal leave is accrued and taken under the National Employment Standards (NES).

In the decision of Mondelez Australia Pty Ltd v AMWU & Ors [2020] HCA 29, the High Court clarified that:

• the entitlement to 10 days of personal/carer’s leave under the NES is calculated based on an employee’s ordinary hours of work, not working days
• 10 days of personal/carer’s leave is calculated as 1/26 of an employee’s ordinary hours of work in a year.

The High Court’s decision overturns a decision made by the Full Federal Court of Australia in August 2019. In that decision, the Full Federal Court held that personal/carer’s leave accrues in working days, not hours.

The recent decision clarifies an employee who takes paid sick or carer’s leave is paid for the hours they would normally work during the period they took leave (not including overtime hours).

Let’s compare the sick and carer’s leave entitlements for full-time employees against those working part time to see how the recent decision has particular impact on workers employed in part-time positions.

Suzanne is a full-time employee who works 38 hours, 5 days a week. Rebecca is a part-time employee who works an average of 19 hours per week, working a 5-day fortnight. Suzanne gets 76 hours (or 10 days) of paid sick and carer’s leave per year. Rebecca gets half of Suzanne’s paid sick and carer’s leave per year as she works half the hours Suzanne works.

Use the Fair Work Ombudsman’s Leave Calculator to calculate sick and carer’s leave entitlements for your employees. You should also update your copy of the Fair Work Information Statement that reflects the new entitlement.

All too hard? We know you’re busy keeping your business afloat in these tough times so keeping up with changes to paid personal leave and other employment legislation is often something low on your “to do” list. Why not let us do it for you? Give Bare Bones Consulting a call or shoot us a request for a call back here.