“Today, the High Court of Australia granted special leave to Mondelēz International and the Australian Government to appeal the problematic decision of the Federal Court in the Mondelēz v AMWU case about the quantum of personal/carer’s leave that employees are entitled to. The appeal will be heard next year and the outcome will be extremely important for industry,” Australian Industry Group Chief Executive, Innes Willox, said today.
“In economic evidence filed in support of the special leave application, Ai Group’s Chief Economist estimated that the Federal Court’s decision, if it stands, would impose more than $2 billion a year of additional costs on employers. In addition to the cost impacts, the decision would impose a major barrier to employers agreeing to part-time employment arrangements, including for employees returning from parental leave.
“The case relates to the meaning of the expression ’10 days of paid personal/carer’s leave’ in section 96 of the Fair Work Act.
“In August this year, the Full Court of the Federal Court handed down a split decision on the meaning of the above expression.
“The Majority (Bromberg and Rangiah JJ) decided that a ‘day’ in section 96 means ‘the portion of a 24 hour period that would otherwise be allotted to work’ and that ‘an employee accrues an entitlement to be absent from work … for ten such working days for each year of service’. On this interpretation, part-time employees would receive 10 days of paid personal/carer’s leave per year even if they work only one day per week, and full-time 12-hour shift workers would receive more than 50% extra personal/carer’s leave than employees who work a standard 7.6 hour day.
“In his dissenting judgment, O’Callaghan J stated that ‘I am unable, with respect, to agree with their Honours’ conclusions’. Justice O’Callaghan highlighted the examples in the Explanatory Memorandum for the Fair Work Bill and stated:
Those examples, in my respectful view, reinforce the expression of the determination of Parliament that the amount of personal/carer’s leave to be accrued is not to be affected by any different spread of an employee’s ordinary hours of work in a week, and is designed to achieve what senior counsel for the applicant, correctly in my view, described as “equity as between different classes of employees”.
“The case relates to 12-hour shift workers at the Mondelēz International plant in Claremont, Tasmania where Cadbury chocolate is manufactured. The current enterprise agreement agreed to by Mondelēz states that the 12-hour shift workers at the Claremont Plant are entitled to 96 hours of personal/carer’s leave per year. This is a lot more generous than the 76 hours that employees would have been entitled to under the Fair Work Act if the Act had been interpreted in the manner that aligns with the widespread industry practice.
“The Federal Court’s decision is inconsistent with the widespread industry practice and will have substantial cost implications for a large number of employers, if the decision stands. Therefore, the decision by the High Court to hear an appeal is very welcome,” said Mr Willox.