The High Court decision on 13 August 2020 in Mondelez Australia Pty Ltd v AMWU & Ors; Minister for Jobs and Industrial Relations v AMWU & Ors [2020] HCA 29 provides key guidance on how the entitlement to paid personal/carer's leave under the National Employment Standards (NES) is calculated under the Fair Work Act 2009 (FW Act).

The High Court, in overturning a decision of the Full Federal Court of Australia, held that an employee is entitled under the NES to “paid personal/carer's leave equivalent to an employee's ordinary hours of work in a two-week period, for each year of service”.

Noting that “patterns of work or distribution of hours do not always follow two week cycles”, the High Court held “the entitlement can also be calculated as 1/26 of an employee’s ordinary hours of work in a year”.

This decision arose in the context of a challenge to the enterprise agreement of Mondelez Australia Pty Ltd (Mondelez), that provided employees working three 12-hour shifts per week were entitled to 96 hours of paid personal/carer’s leave per year (i.e sufficient paid personal/carer’s leave to cover eight 12-hour shifts).

Mondelez argued the entitlement under the NES was 72 hours per year – which was the number of hours worked by the employees in a two-week period (i.e 10 days) – and therefore the enterprise agreement exceeded the NES.

The AMWU and affected Mondelez employees argued the employees were entitled to sufficient paid personal/carer’s leave to cover ten 12-hour shifts (i.e 120 hours) per year under the NES.

The High Court's interpretation means employees working the same number of ordinary hours per year will receive the same entitlement of paid personal/carer’s leave regardless of the pattern of hours worked.

The High Court considered the alternative “would give rise to absurd results and inequitable outcomes, and would be contrary to the legislative purposes of fairness and flexibility in the Fair Work Act”.

The full decision of the High Court is available at http://eresources.hcourt.gov.au/downloadPdf/2020/HCA/29, and a summary of the decision is available at https://cdn.hcourt.gov.au/assets/publications/judgment-summaries/2020/hca-29-2020-08-13.pdf.”

E-Alert
17 August 2020

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