A key component of our service offering is to assist our clients to meet the legislative requirements in managing their people.  Here we share two recent legislative updates which have had potentially far-reaching implications for employers. 

Personal Leave – What Defines a ‘Day’?

Employers would be aware of the requirement under the National Employment Standards (NES) to provide employees with 10 days of paid personal leave per year. This is straight-forward when calculating the personal leave accrual for full time employees who work a ‘standard’ work roster of 38 hours per week. 

The Personal Leave provisions under the NES was the subject of a challenge in the Federal Court in 2019.  (Mondelez v AMWU [2019] FCAFC 138). The case centred on the interpretation of the personal leave provision under the NES and became the point of contention for part-time employees who worked three 12 hour shifts each week.  In the ruling, the Federal Court’s judgement determined that employees are entitled to 10 days of personal/carer’s leave irrespective of their pattern of work hours.  

This judgement was tested again recently on appeal in the High-Court on 13 August 2020 ( Mondelez v AMWU [2020] HCA 29). The ruling was seen as a ‘common-sense’ approach in which the High Court made a decision to overturn the prior ruling and determined that personal leave accrues on the basis of the ordinary hours worked per week.  That is, personal leave accrues on a pro-rata basis for a part-time employee.

In summary, the High Court clarified that:

• The entitlement to 10 days of personal/carer’s leave under the NES is calculated based on an employee’s ordinary hours of work, not working days; and 
• 10 days of personal/carer’s leave is calculated as 1/26 of an employee’s ordinary hours of work in a year.

The good news…

As this is the long standing basis on which most automated payroll systems accrue personal leave, unless your payroll system or provider made changes to the way employees accrue personal leave, it’s likely that your part-timers have been accruing personal leave correctly.  

We recommend that it’s worth checking with your payroll provider to ensure personal leave is being accrued correctly.

The Miscellaneous Award

Effective 1 July 2020 changes to the ‘Coverage’ clause of Miscellaneous Award came into effect.  The edits to the ‘Coverage’ clause have effectively broadened the reach of this Award. So employers may now find that some employees are covered by the Miscellaneous Award where they previously were not covered by any Award. 

 The potential consequences for employers are:

• • Employees who were previously held to be ‘Award Free’ employees, may now be covered by the Miscellaneous Award.
  • The Miscellaneous Award may now apply to employees who perform work of a manual or low skilled nature, and who are not covered by any other Award.
  • The Miscellaneous Award may now apply to more senior employees who were traditionally not covered by an Award. Though notably, clause 4.2 states the following exclusions: 

• 4.2 The award does not cover managerial employees and professional employees such as accountants and finance, marketing, legal, human resources, public relations and information technology specialists.

Given the above changes, if you believe that some of your employees may now fall under the Miscellaneous Award, it’s prudent to undertake a review to confirm the Award coverage and ensure the minimum Award provisions are met, in particular with respect to pay rates, penalty rates, overtime rates and meal breaks.

If you require assistance in navigating any aspect of the above changes, feel free to give us a call.

Disclaimer: The contents do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such.

Nick Hedges is the founder of Resolve HR, a Sydney-based HR consultancy specialising in providing workplace advice to managers and business owners. He recently published his first book, “Is Your Team Failing Or Kicking Goals – Take control of your people and their performance”. It is a practical response to the most pressing HR challenges, which can be found at https://resolvehr.com.au/.