New Calculation Of Personal/Sick Leave
The Mondelez Decision
On 21 August 2019, the Full Federal Court of Australia handed down a decision dealing with how paid sick and carer’s leave accumulates and is taken under the National Employment Standards (NES).
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.
This entitlement applies from the employees start date of employment.
The company & government have appealed this decision. However, until this is heard the above isthe law.
What does this affect?
Whilst an award, agreement, contract can set out different entitlements to leave, they can’t be less
than the minimum entitlement in the National Employment Standards (NES).
The NES minimum entitlement is based on the decision above and allows for 10 paid days leave per
employee per year of service.
How is it calculated?
- Find out how many Calendar days in the employees year of service
- Find out how many Calendar days (or part days) count as service. Unpaid leave does not count as service.
- Calculate the amount of leave accumulated
Multiply the number of days from step 2 x 10 then divide by the number of days in step 1.
What happens if an employee takes a part day of leave?
A part day of leave is calculated as a fraction of the ‘ordinary hours’ of work the employee would
have worked that day.
What if an employee works different hours on different days?
If any employee works different hours on different days this doesn’t affect how their leave is
accrued. This is because leave is accrued in days, based on service with the employer. A day is an employee’s ordinary hours of work in a 24 hour period.
Working different hours on different days, does affect what the employee gets paid when they take
i.e. employee works 2 weeks on a 4 on 4 off basis of 12 hrs. Then for the following 2 weeks they
work 5 days at 8hrs per day.
If sick, in weeks 3 (working 8 hrs per day) they get paid 8 hrs.
This is really applicable to shift workers who will now get paid according to the hrs on the shift of the day they would have worked, not the standard base rate hrs of 7.6 per day. Employee’s aren’t paid for any overtime hours they are rostered to work.
Is an employee entitled to back pay if an employer only paid them for 7.6 hours of leave on the days they would’ve worked 12 ordinary hours?
If the employee would have normally worked 12 ordinary hours on a day they took paid sick and carer’s leave, they should be paid for those 12 hours at their base pay rate.
If they were previously only paid for 7.6 hours but should have been paid for 12, the employee is entitled to back pay for the difference.
They may also be entitled to extra superannuation contributions and interest.
What happens to accumulated paid sick and carer’s leave if an employee changes from part-time to full-time employment with their employer?
Full-time and part-time employees each get 10 days of paid sick and carer’s leave for each year of
A part-time employee would have accumulated 10 days of leave for each year of service while part time.
If they become full-time, they accumulate leave at the same rate.
Does the decision impact our advice on annual leave or other types of leave?
The decision doesn’t impact annual leave or other forms of leave under the NES. It only applies to
paid sick and carer’s leave.
What should employers do now?
Employers should review their leave or payroll systems and records to make sure they’re calculating
leave in days, not hours.
As part of this, employers should consider issues such as:
- In addition to employees’ NES entitlements to paid sick and carer’s leave, do their employees have a greater entitlement under their registered agreement, award or employment contract?
- Are they required to make any back payments and/or additional superannuation
contributions and/or interest payments in relation to the leave?
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