In Mondelez Australia Pty Ltd v Automotive, Food Metals, Engineering, Printing and Kindred Industries Union (AMWU) & Ors  HCA 29 (13 August 2020) the High Court considered how the entitlement to paid personal/carer’s leave (personal leave) is calculated under s96(1) of the Fair Work Act 2009 (Cth) (Fair Work Act).
By way of background, Mondelez operates a number of food manufacturing plants in Australia. Ms Triffitt and Mr McCormack are Mondelez employees and union members. They both work 12-hour shifts and work an average of three shifts a week.
Under the relevant enterprise agreement (EBA) Ms Triffitt and Mr McCormack are entitled to 96 hours of paid personal leave per annum. When Ms Triffitt or Mr McCormack take personal leave for a single 12-hour shift, Mondelez deducts 12 hours from their accrued balance.
Ms Triffitt, Mr McCormack and the AMWU contended that the EBA leave entitlements did not comply with s96(1) of the Fair Work Act. Section 96(1) provides that “(f)or each year of service with his or her employer, an employee is entitled to 10 days of paid personal/carer’s leave”.
Central to the disputed construction of s96(1) of the Fair Work Act was the meaning of “working day”. The AMWU argued that a “working day” consists of a portion of a 24-hour period in which an employee is engaged to work. So, s96(1) allowed an employee to take 10 working days per year in personal leave.
But Mondelez argued that “working day” referred to a “notional day” consisting of one-tenth of the equivalent of an employee’s ordinary hours of work in a two-week period (or 1/26 of their ordinary hours of work in a year). So, Ms Triffitt and Mr McCormack were, on the hours that they worked, entitled to 72 hours of personal leave under the Fair Work Act (less than actually given under the EBA).
The Full Federal Court of Australia favoured the AMWU’s construction of a “working day” as being part of a 24-hour period. But Mondelez was successful on appeal to the High Court. The plurality, consisting of Kiefel CJ and Nettle and Gordon JJ and (in a separate set of reasons) Edelman J, considered that s96(1), properly construed, referred to a “notional day” for broadly three reasons.
First, their Honours noted the statutory context of the Fair Work Act favoured a “notional day” construction. In the Fair Work Act, the accrual of personal leave (s96(2)), payment of personal leave (s99) and the “cashing out” of personal leave (ss100 and 101) all refer to the employee’s ordinary hours of work.
Kiefel CJ and Nettle and Gordon JJ also opined that the “notional day” construction accommodates the diverse working patterns of employees and is consistent with the purposes of the Fair Work Act, being, among other things, to provide workplace laws that are fair to working Australians and flexible for businesses.
Second, their Honours noted that the explanatory memorandum to the Fair Work Act described the concept and operation of the personal leave scheme in terms of the ordinary hours worked by employees.
Third, their Honours observed that the legislative history of the Fair Work Act also supported a “notional day” construction. The Workplace Relations Act 1996 (Cth) (Workplace Relations Act)was the predecessor to the Fair Work Act.
Section 93F(2) of the Workplace Relations Act included a formula for the calculation of personal leave that included the nominal hours worked by an employee. The explanatory memorandum to the Workplace Relations Act explained that the purpose of the formula was to ensure that employees, whose hours of work vary, accrue appropriate amounts of personal leave.
Kiefel CJ and Nettle and Gordon JJ considered that the inclusion of the Workplace Relations Act provisions in the explanatory memorandum to the Fair Work Act demonstrated the continuity of those old provisions.
Gagler J, in dissent, saw no reason to depart from the “standard pattern” in the Fair Work Act of “specifying the number of 24-hour periods in which absence of work is authorised”.
Dr Michelle Sharpe is a Victorian barrister practising in general commercial, disciplinary and regulatory law, ph 9225 8722, email email@example.com. The full version of these judgments can be found at austlii.edu.au.