The High Court’s decision to reverse a Federal Court ruling on how personal and carer’s leave is calculated for permanent national system employees is a win for employers across the country, according to Employsure, Australia’s largest workplace relations advisor.
A 2019 ruling against Cadbury manufacturer Mondelez found the Fair Work Act’s minimum 10 days’ paid personal leave should be given to permanent employees regardless of the number of days worked per week or number of hours per day.
That decision has now been reversed.
“Today’s ruling takes away the unnecessary financial risk business owners may have faced due to the confusing nature of the original decision,” said Employsure Managing Director Ed Mallett.
“The decision, had it remained, could have had significant ramifications for employers across a number of sectors, leaving a number of businesses to foot the bill.
“In practical terms, what today’s reversal of the decision means for workers is that their leave entitlements are based on the number of ordinary hours they work in a fortnightly period.
“The ruling is a win for employers who have already been stretched to breaking point over the past year due to COVID-19.”
The reversal by the High Court means the rate of personal and carer’s leave will revert back to the way it used to be calculated prior to August last year.
Permanent full-time employees are entitled to 10 days personal leave per annum, while permanent part-time employees are entitled to a pro rata amount based on number of ordinary hours worked.
The payment will be paid based on ordinary hours normally worked had the employee not been on leave.
Mr Mallett has advised employers to communicate with their staff on the outcome of the High Court’s decision, to avoid any potential confusion.
“If an employer changed how personal leave operates following the original Federal Court ruling last August, they need to update their payroll system accordingly,” he said.
“Staff need to be assured that they don’t need to do a thing, and that when personal or carer’s leave is taken, the business will comply with the Governing legislation.
“If an employer did not change how personal leave operates as a result of last August’s decision, the employer should still reiterate with staff that the way they operate personal or carer’s leave in the business is accurate, and no further action is needed.”
