Australia: The Full Federal Court holds that “day” in 10 days of paid personal/carer’s leave to be given “working day” construction
A majority (Bromberg and Rangiah JJ; O’Callaghan J diseenting) of the Full Federal Court of Australia has held that, for the purposes of section 96(1) of the Fair Work Act (Cth) (“FW Act”), a “day” of paid personal/carers leave refers to a day of ordinary hours worked and not a notional day of 7.6 hours.
In Mondelez v Australian Manufacturing Workers Union [2019] FCAFC 138, the majority of the Full Federal Court refused to make declarations sought by a food manufacturing plant operator, Mondelez (“Employer”), that the entitlement to paid personal/carer’s leave under the Mondelez Australia Pty Ltd, Claremont Operations (Confectioners & Stores) Enterprise Bargaining Agreement 2017 (“Enterprise Agreement”) was “more beneficial” than the entitlements under the National Employment Standards (“NES”).
Importantly, the majority observed that, pursuant to section 61(1) of the FW Act, the NES are the “minimum standards that apply to the employment of employees which cannot be displaced.” As part of the NES, section 96(1) of the FW Act provides that “for each year of service with his or her employer, an employee is entitled to 10 days of paid personal/carer’s leave.”
Comparatively, the Enterprise Agreement provided that employees working 12-hour shifts, three days a week, being the position of the two employees who were also Respondents to the proceedings (“Employees”), were entitled to 96 hours of paid personal leave per annum. The issue in contention was what the ordinary meaning of “day” was in section 96 of the FW Act.
The Employees argued that “day” had its grammatical, or natural and ordinary, meaning of a “calendar day”, which is a “24 hour period”, and therefore the Employees were entitled to 120 hours of paid personal/carer’s leave, being 10 days of 12-hour shifts.
The Employer argued that “day” had its “industrial meaning” of “notional day”, which would be the Employees’ average daily hours based on an assumed five-day working week, being ten days of 7.2 hours. The Employer based this contention on a corresponding notional 38-hour working week.
The majority of the Full Federal Court preferred the Employees’ submissions, holding that the statutory text of section 96(1) was expressly based upon time served by the employee and was to be calculated in days, not hours as submitted by the Employer and the Minister for Small and Family Business, the Workplace and Deregulation intervening. Consequently, the entitlement to be paid personal/carer’s leave under the Enterprise Agreement was found to be less beneficial to the Employees than their NES entitlements.
The majority considered that the Employer’s “notional day” construction would mean that the Employee’s accrued paid personal/carer’s leave balance would be exhausted after 6 calendar days, and if they took further leave they would lose income, which was inconsistent with the purpose of income protection for all part-time and full-time employees.
By reference to “ordinary hours” in section 96(2), the majority found that the legislative intention accommodated the common circumstance of an employee requiring a part-day of paid personal/carer’s leave.
Additionally, the majority rejected the Employer’s submission that an “ordinary meaning” construction of “day” would be inequitable as an employee who works fewer, longer shifts would effectively get more paid personal/carer’s leave than an employee who works a standard five-day week. The majority stated there could be no inequity or unfairness where both employees are able to take an equal number of “working days” of paid personal/carer’s leave with neither suffering a loss of earnings as a consequence of not working.
