Many employers could be hit with the prospect of increasing sick leave provisions and even backpaying workers, depending on the outcome of a significant Federal Court case.
“An important case is before the Federal Court relating to the meaning of the phrase ‘10 days of paid personal/carer’s leave’ in section 96 of the Fair Work Act,” Australian Industry Group chief executive Innes Willox said in a statement.
“In payroll systems, personal/carer’s leave entitlements are typically recorded in hours, not days, on the basis of the number of ordinary hours that an employee works. For example, employees who work 38 hours per week are typically credited with 76 hours of paid personal/carer’s leave per year, regardless of whether their ordinary hours are arranged on the basis of 7.6, 8, 10 or 12 hours per day.”
Mr Willox noted that the case was brought on because of action relating to “12-hour shift workers at the Mondelēz International plant in Claremont, Tasmania”, but the court’s ultimate ruling “has implications for most employers in Australia”.
“The current enterprise agreement agreed to by Mondelēz International applies to employees at the Claremont Plant and states that they are entitled to 96 hours of personal/carer’s leave per year. This is a lot more generous than the 76 hours employees are entitled to under the Fair Work Act, if the act is interpreted in the manner in which AI Group and Mondelēz contends.”
According to Mr Willox, the potential gravity of the situation has caused federal Small Business Minister Craid Laundy to become involved, with the matter set to be heard by the Full Court of the Federal Court on 6 September.
Fairfax Media suggested that “the Fair Work Commission recently pulled the rug on the standard practice” of providing 76 hours paid sick leave each year, following a separate judgement in favour of workers doing 12-hour shifts at drug-maker AstraZeneca.
That finding suggested employees working more than the standard work day were entitled to a corresponding increase in the amount of sick leave they are allocated.
Workplace complexity ‘its own Achilles heel’
Commenting on the saga that has cast a shadow over some 1 million shift workers around the country, EmploySure founder and managing director Ed Mallett said the already complex industrial relations framework just got significantly worse.
“Now the Fair Work Ombudsman must correct the ‘misleading advice’ it has been giving to employers, which the Fair Work Commission had contradicted,” he said in a statement.
“We know very well in this heavily red taped workplace relations system that employers – particularly small business – simply cannot afford to slip up. One misinformed error can be the end of what they have worked tirelessly to achieve.”
Mr Mallett said that “it is possible that employers could be forced to backpay sick leave”, but suggested the incidence of this – if it did eventuate – may be minimal, given that “it seems the onus of proof would be on the employee”.
“Employees may [be able to] claim the unpaid sick leave entitlement as far back as seven years if they were required to take unpaid leave to cover periods of doctor-supported illness,” he said.
“We are keen to see what the Federal Court rules and further, how the claim process will roll out.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.