Important Changes – method of accruing and taking personal/carers leave

On 21 August 2019, the Full Federal Court of Australia handed down a decision in Mondelez Australia Pty Ltd v AMWU. The decision deals with the method of accruing and taking paid personal/carer’s leave for the purposes of the National Employment Standards under the Fair Work Act 2009.

The decision said that:

• full-time and part-time employees each get 10 days of paid sick and carer’s leave for every year of employment

• paid sick and carer’s leave accumulates in days, not hours.

The Australian Government and the company involved in the case, Mondelez Australia Pty Ltd, applied to the High Court of Australia to appeal this decision. The High Court granted these applications on 13 December 2019. This means an appeal of the Mondelez decision will be heard by the High Court. In the meantime, the decision made on 21 August 2019 is the current state of the law and applies to affected employers and employees.

What are the changes?

1. Full-time and part-time employees are entitled to 10 working days of paid personal/carer’s leave for each year of employment.

2. The leave must be calculated in working days and not hours as it previously was. A working day is defined as the portion of a 24-hour period that an employee would be working. For example, where an employee is rostered on 12 hour shifts, and they take personal/carer’s leave for the whole shift, then 1 day is deducted from their personal/carer’s leave accrual, not 12 hours or 7.6 hours.

3. For every day of personal/carer’s leave taken, an employer deducts a day from the employee’s accrued leave balance. If an employee takes a part-day of leave, an equivalent part-day is deducted from the employee’s accrued leave balance.

How can you implement the changes?

You will need to make changes to your payroll platform settings from accruing in hours to accruing in days. For example, the accrual rate should now be 0.02739726 days or 0.0273224 days (in a leap year). You will also need to ensure when employees take personal/carers leave that the system deducts a day or part day from the employee’s balance.

For an employee who works 38 hours a week, 7.6 hours a day, 5 days a week the change is reasonable simple.

However, where you have employees who work part-time or do shift work, it will be much more complex, particularly where there is no rostering system or set standard hours per day.

For example, you employ a part-time employee who does not have a set roster in place where they work standard hours on particular days of the week. Without this structure in place it will be difficult to manage the accruals and deductions properly.

How can we help?

Having the right payroll platform and employment contracts in place will be fundamental to implementing these changes successfully.

Essential HR recognise that many small to medium sized businesses in Adelaide do not have internal HR resources. We have developed cost effective and scalable solutions to suit any business needs. We deliver our solutions with a focus on systems & processes, compliance, performance and retention, aligning company goals with best practice HR strategies. What sets us apart from traditional HR consulting is we are powered by Employment Innovations, meaning we can offer additional support and services including payroll processing, legal advice and HR/payroll technology, such as Employment Hero and Keypay.

For a free consultation contact me justine@esshr.com.au