The Federal Court has made a landmark ruling in the case of Mondeléz v AMWU  FCAFC 138. This case has been called to clarify the definition of personal leave under the provision of the Fair Work Act. Hope Earle Lawyers’ Raffaella Oliva provides a thorough breakdown of this ruling below.
In a case brought before the Federal Court regarding the Mondeléz International plant in Claremont Tasmania, the court was called to consider how an employee’s entitlement to personal leave under s96(1) of the Fair Work Act (the Act) is to be calculated. Specifically, they were required to assess whether a personal leave day taken by an employee be paid out by reference to their ordinary working hours or an average of their ordinary hours.
Mondeléz argued that the hours paid out for a personal leave day be calculated by totalling the employee’s working hours of a standard week and dividing it by the number of days worked. The result of this calculation produced a ‘notional day’ for personal leave and potentially meant that an employee who fell sick on a day that they were expected to work 10 hours, may only be paid out for 7 when calculated as a ‘notional day’. The effect of this interpretation is that across the period of a year, employees are entitled to personal leave for the equivalent of 10 average working days and in effect leave is calculated by way of hours.
The Respondent submitted to the court that their interpretation of s96 of the Act and the meaning of ‘day’ in the provision reflected an ordinary calendar day. The effect of this interpretation is that an employee be entitled to paid leave for the entirety of the hours they were expected to work when enlisting their personal leave and can enlist this leave on 10 separate working days of the year.
After assessing these competing constructions, by way of Majority, the Court ruled in favour of the Respondent. The Court confirmed that on their interpretation of the provision, ‘personal leave is to be calculated by reference to calendar days in line with its natural and ordinary meaning’ and that employers are ‘required to pay a personal leave day by reference to the employee’s ordinary hours of work.’
Hope Earle Lawyers have considerable experience advising and assisting employers with a variety of employment law concerns. For all enquiries regarding business and employment, get in contact with our team of legal experts today.