A recent landmark Federal Court decision brought forward by the Australian Manufacturing Worker’s Union will now see increased employee rights regarding personal leave, including sick leave back pay. The decision greatly affects both employers and employees and will pave the way for new industry standards.

Australia’s National Employment Standards (NES) stipulates that employees must be entitled to a minimum of 10 days paid personal leave per year. However, such a basis is made on the assumption that an employee works an average of 7.6 hours a day; thus entitling them to 76 hours of personal leave under the NES. This industry standard does not consider shift workers and other employees who work greater working days, or those who work shifts greater than 7.6 hours.

The recent case between Mondelez v AMWU & ors accordingly found that the Fair Work Act’s personal leave right should be calculated on the number of ordinary hours an individual works rather than the predetermined 7.6 hours. The decision reflects the idea that employees who work longer than standard shifts, should be entitled to an amount of sick leave that adequately reflects the longer hours that they work.

Employers must be prepared to pay their staff according to the number of hours worked, otherwise they may become subject to an underpayment claim. All employers should seek to avoid underpayment claims entirely. This may be achieved by:

  • Calculating an employee’s base rate, allowances and penalty rates.
  • Keeping precise records of all payments made to employees; including hours worked and overtime.
  • Keeping up to date with the current modern award system and any legislative changes related to employee wages.

All employers should consult past payment records to determine precisely how much personal leave all employees have been paid. This should be in accordance with the Australian National Employment Standards.

The recent landmark Federal Court decision paves the way for employees to claim personal leave if they believe they have been unfairly undercut or underpaid. If you believe your personal leave has been undercut do not hesitate to contact JFMLAW on (02) 9199 8597.  Our staff at JFMLAW are highly experienced in all aspects of Employment Law, and are more than happy to help with any issues that may arise in your workplace.