In September, 2019 we advised the landmark decision by the Full Court of the Federal Court concerning two employees of Mondelez Australia who work 12 hour days were entitled to ten 12 hour personal leave days per year and where part time employees were entitled to 10 days personal leave per year. This decision was based on what constitutes a personal leave day under the National Employment Standards (NES).
This decision was recently challenged in the High Court and the outcome overturned the Full Court of the Federal Courts decision.
The High Court found that a day of personal leave refers to a ‘notional day’ consisting of 1/10th of the equivalent of an employee’s ordinary hours of work in a two-week fortnightly period. For employees whose work hours do not follow a two-week cycle, the entitlement to 10 days leave can be calculated as 1/26th of the employee’s ordinary hours in a year.
The High Court also found that part time employees accrue personal leave on a pro-rata basis based on their ordinary hours of work.
It therefore stands that an employee’s personal leave is deducted according the ordinary hours the employee would have worked for that period of leave.
It is important to note that this refers to the calculation of Personal Leave under the NES. You should always check your relevant modern awards or enterprise agreements to determine if more generous entitlements exist for your employees.
Please ensure that any calculations of personal leave that were changed to reflect the Mondelez decision is rechecked and amended to reflect the High Court ruling.
Should you have any questions as to how you are to administer your personal leave, please contact us at [email protected] or 1300 720 004.
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