Q. Our company has a number of employees with an excessive accumulation of paid personal/carer’s leave. Previously, it was common for awards to limit the amount of personal/carer’s leave an employee could accrue to a maximum accumulation, usually 12 years. The Fair Wok Act does not make such a provision nor do the respective modern awards which cover our employees. Management is considering changing our leave policy to include a maximum accumulation of personal/carer’s leave, after which the employee forfeits further accrual. Is this permitted under the Fair Work Act or the applicable modern awards? The relevant awards are the Manufacturing and Associated Industries and Occupations Award 2020 and the Clerks – Private Sector Award 2020. 

 

A. Under the Fair Work Act (s.96), any untaken balance of paid personal/carer’s leave carries over to the next year. There is no cap on the amount of personal/care’s leave an employee may accumulate during the course of their service with the employer. A cap on sick leave accumulation was a term in many federal and state awards prior to the introduction of Fair Work legislation.  
Paid personal/carer’s leave accrues during periods that count as an employee’s ‘service’, which is defined as including all periods of employment other than: 

  • unpaid leave, e.g. parental leave, or leave without pay granted by the employer 
  • an unpaid absence (other than community service leave) 
  • an unauthorised absence, e.g. unprotected industrial action. 

 
An employee does not accrue personal/carer’s leave during an absence on workers compensation, unless otherwise provided by the relevant state or territory workers compensation law. There is no definition of ‘ordinary hours of work’ – this is determined by the ordinary hours of work for an employee covered by the relevant modern award for a week or a day, which will be used to calculate payment for paid personal/carer’s leave or paid compassionate leave.  

The rate of accrual can change if an employee converts from full-time to part-time employment, or vice versa, however, the employee will not lose accrued leave. The future rate of accrual will be different, based on the employee’s new ordinary hours of work. 

 

Modern awards 

Generally, the terms of a modern award relating to personal/carer’s leave refer to the National Employment Standards under the Fair Work Act. This means there is no cap on accumulation of personal/carer’s leave which is specified by a modern award. This includes, in this case, the Manufacturing and Associated Industries and Occupations Award 2020 and the Clerks – Private Sector Award 2020.