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High Court leave decision spares business further pain

Overturning the controversial Federal Court decision in Mondelez v AMWU
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High Court leave decision spares business further pain

High Court leave decision spares business further pain

20 August 2020

The business community has breathed an enormous sigh of relief following the High Court restoring common sense last week to how personal/carer’s leave is calculated under Australia’s workplace laws.

In overturning the controversial Federal Court decision in Mondelez v AMWU, the High Court has upheld the common understanding of calculating personal/carer’s leave entitlements.

“Section 96 of the Fair Work Act states that each employee is entitled to '10 days of paid personal/carer's leave',” Steve Knott, AMMA Chief Executive, said.

“The Mondelez matter has essentially tested what ’10 days’ means, with the Federal Court interpreting this as 10 days at whatever number of hours an employee would ordinarily work in a 24-hour period – what is referred to as the ‘working day’ construction.

“The High Court has confirmed this interpretation was wrong. It states the ‘working day’ construction ‘would give rise to absurd results and inequitable outcomes’ – employers could not have said it better themselves.

“The concern with the ‘working day’ construction was that it would create great disparity between different groups of employees in workplaces where there are multiple different shifts and rosters in place, such as manufacturing plants or mine sites.

“It might, for example, have seen some employees receive 120 hours’ of leave entitlement and others receive 76 hours, despite working the same number of hours across a two-week period.

“The High Court has held that what is meant by ’10 days’ must be calculated by reference to an employee’s ordinary hours of work across two standard working weeks.

“Employees working 76 hours across a fortnight, for example, would receive the same personal leave entitlements irrespective of whether those 76 hours were worked across eight shifts or ten.

“This issue has only come about due to the poor drafting of the Fair Work Act. At the time everyone knew ’10 days’ meant ordinary hours spread across two working weeks, but the legislation failed to properly clarify this.”

Mr Knott said the High Court’s decision would be much welcomed by employers both in the resources industry and across the broader economy.

“The economy has dodged a significant bullet here at a time when we can least afford it,” he said. “A significant amount of businesses would have been exposed to huge liabilities if the Federal Court’s interpretation stood.

“It goes without saying that imposing billions of dollars of unforeseen employment costs, brought about by novel interpretations of our workplaces laws, is the last thing Australian businesses need as they struggle to keep their heads above water during a global health and economic crisis.”

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