High Court Appeal heard on Personal Leave Test Case

UPDATE: The High Court handed down its decision in this matter on 13 August 2020 – catch-up in our related article here.

Most employers will likely recall that, in August last year, a Full Federal Court handed down a significant – and, for the most part, unexpected – decision, finding that the entitlement to “10 days of paid personal/carer’s leave” contained within the Fair Work Act 2009 (Cth) was to be interpreted as 10 “working days” for all permanent employees. According to the Federal Court, this entitlement to 10 “working days” per year also extends to part-timers, regardless of the number of hours or days they work per week.

The decision, which was a complete departure from the traditionally applied method of calculating an employee’s entitlement to personal/carer’s leave, understandably attracted substantial attention across Australia, creating much angst for employers (and the bookkeepers and payroll officers responsible for maintaining leave accrual records). Ramifications of the landmark decision were such that, if not overturned, nearly all permanent (full-time and part-time) employees stood to be impacted, with the exception of those who work 7.6-hour days over a 5-day working week. The additional costs that would flow to employers on the basis of the Federal Court’s decision are estimated to be in the vicinity of $2 billion a year.

At this stage, the Federal Court’s decision still stands but both the employer (Mondelez Australia Pty Ltd) and the Federal Government were granted leave to appeal the decision just prior to Christmas 2019, and the appeal was heard before the High Court earlier this month. For now, we are once again waiting with great interest for the High Court’s decision to either uphold, or overturn, the Federal Court’s ruling – a decision of even greater significance than the original.

Employer Services Subscribers will be kept fully informed of developments. Employers can refresh on the key elements of the Federal Court’s August 2019 decision in our original news bulletin here – Entitlement to Personal Leave – Full Court rules on Test Case.