Since an August 2019 ruling from the Federal Court, there has been a lingering question about the handling of leave accruals for Australian employees. Yesterday, this was brought to a close by the High Court of Australia, striking down the Federal Court’s decision and returning the status quo.
The August 2019 ruling determined that employees rostered for three 12-hour shifts in a week are entitled to be paid for the full 12 hours of their shift when on personal and carer’s leave. Their employer had been paying the shift workers for only 7.2 hours, being the average number of hours per day in a five-day week. Further to this the court also clarified that personal and carer’s leave must be accrued and taken in measures of days and part-days, rather than hours.
However this ruling has now been reversed, with the Australian Payroll Association CEO Tracy Angwin declaring
it would have “placed significant additional financial burden on companies, and also created a disparity in entitlements for part-time employees, and a level of complexity that could lead to employer’s reconsidering flexible working arrangements.”
Yesterday’s decision has upheld the current practice of calculating leave accruals that allows an employer to recognise a ‘day’ as a reference to the employee’s ordinary work hours.
The High Court stated, “One “day” refers to a “notional day” consisting of one-tenth of the equivalent of an employee’s ordinary hours of work in a two-week period.
Because patterns of work do not always follow two-week cycles, the entitlement to “10 days” of paid personal/carer’s leave can be calculated as 1/26 of an employee’s ordinary hours of work in a year.”
The full summary judgement is available here