Summary

The Government has announced it is seeking leave to appeal the recent full Federal Court decision to the High Court regarding the entitlement of all employees to 10 calendar days of personal leave per year. The case has far-reaching implications for all employers and employees and will be carefully monitored as it progresses.

For employers

• Under the current full Federal Court precedent, all employees are entitled to 10 calendar days personal leave per year
• Consider amending employment contracts to include a reference to NES entitlements for personal leave
• If in doubt about your obligations, seek legal advice

In a landmark case last month, the full Federal Court ruled that shift workers who were working 12-hour shifts were entitled to 10 calendar days of personal leave per year, amounting to 120 hours, instead of the 76 hours the employer (Mondelez International) believed applied under the NES (based on 38 ordinary hours per week)[1].

The Mondelez employees were all working 36 hours a week- some by working 3 x 12-hour shifts. The Federal Court decided that these employees should still be entitled to 10 days personal leave at 12 hours each occasion, given this was their ordinary working hours, even though that meant that they could take up to 120 hours personal leave each year. The implication of the decision is that part time employees also get 10 days personal leave and that this is not pro rata.

The case has caused significant unrest amongst employers, particularly those who engage shift workers and part time employees, given the financial implications of the ruling.

On Monday the IR Minister, Christian Porter, announced that the government is seeking leave to appeal the decision in the High Court of Australia. Mondelez International has stated they are also seeking leave to appeal.

In the meantime, while there is some uncertainty whether the decision in Mondelez will be upheld, the precedent is set requiring personal leave to be calculated by reference to calendar days rather than a “notional day” based on an employee’s average ordinary hours. That is, all employees are entitled to 10 days personal leave per year, regardless of whether they work long shifts or part time.

Along with employers Australia-wide, we will be keeping a close eye on this case and will provide further updates on any developments.