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Important changes to personal leave accrual

Updated: Dec 15, 2020

Are you a business owner? Do you understand the impending changes for employers following the recent Federal Court (Mondelez v AMWU & Ors [2019] FCAFC 138) ruling about the accrual of personal leave?

Although the full extent of these changes is still not yet known, the Fair Work Ombudsman has confirmed that they are currently reviewing and updating their advice in relation to the accrual of personal/carer’s leave. So, what does this mean for employers and what steps should you be taking to prepare?

Personal leave: What you need to know

  • Full-time and part-time employees are entitled to 10 working days of paid personal/carer’s leave for each year of employment.

  • The leave protects those employees’ income when they are entitled to be absent from work.

  • The leave must be calculated in working days, not hours. A working day is the portion of a 24 hour period that an employee would otherwise be working.

  • An employee’s entitlement is expressly based upon time working for the employer and is expressly calculated in days.

  • For every day of personal/carer’s leave taken, an employer deducts a day from the employee’s accrued leave balance. If an employee takes a part-day of leave, then an equivalent part-day is deducted from the employee’s accrued leave balance.

Moving forward: Accrual breakdown

  • Make sure the accrual of employee personal/carer’s leave is calculated in days not hours. Whether your employees are full-time or part-time, they are entitled to 10 working days, regardless of the hours worked.

  • Check your payroll system. Typically, this is recorded as an hourly amount. For example, 76 hours per year for full-time employees and a pro-rate amount for part-time employees. If this is the case, ensure that:

  1. Part-time employees accrue 10 working days per year rather than a pro-rated amount).

  2. Shift workers who work more than the standard 7.6 hours accrue 10 working days of personal/carer’s leave per year.

As more information becomes available about employer obligations following this decision, it will be released by the Fair Work Ombudsman.

Do you need some help understanding and implementing changes for personal/carer’s leave accrual? Get in touch with our team.

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