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High Court majority overturns full Federal Court Mondelez decision, restoring traditional sick leave accrual rules

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By Chao Ni, Principal, MST Lawyers

In our 28 November 2019 and 28 February 2020 legal bulletins, we highlighted the significant Federal Court decision in Mondelez v AMWU [2019] FCAFC 138 (the Mondelez decision).

In the Mondelez decision, the Full Federal Court (by two to one majority) determined that all full time and part time employees were entitled to 10 days’ personal/carer’s leave per year of service, with each ‘day’ to mean the hours that they would have worked on the day of the absence.

The Mondelez decision was appealed by the employer and joined by Minister for Jobs and Industrial Relations.

On 13 August 2020, the High Court (by majority four to one), set aside the Mondelez decision and allowed the appeal.  The High Court’s judgment can be accessed here.

In allowing the appeal and restoring what was, for many, the usual method of accruing personal/carer’s leave entitlements for part time and full time employees,  the High Court placed an emphasis on fairness, including:

  1. Fair treatment as between employees according to their ordinary hours of work, regardless of the pattern in which those hours are worked; and
  2. Fairness for employers and employees both being able to know, at any point in time, precisely how much paid personal/carer’s leave an employee has accrued.

The High Court deemed that the alternative construction adopted by the Full Federal Court would produce absurd results and unfair outcomes, contrary to the legislative purposes of fairness and flexibility in the Fair Work Act, the extrinsic materials (such as the Explanatory Memorandum to the Fair Work Act) and the legislative history (such as the Workplace Relations Act which preceded the Fair Work Act).

Employer groups can now breathe a sigh of relief knowing that certainty has been restored and that the prospect of retrospective sick leave liability can be put to rest.

For more information about this article, please contact our Employment Law team by email or on telephone +61 8540 0200.