Chocolate factory decision set to affect tens of thousands of SA bosses and workers
It’s set to be one of the biggest recent changes to workplace laws — as a Federal Court decision on part-time and shift workers’ sick leave may have massive ramifications on both employers and employees.
South Australia’s largest business lobby and the Federal Government have warned a new court ruling on how sick leave should be calculated for part-time and shift workers could have major ramifications.
Business SA is concerned the Federal Court decision, in favour of Cadbury chocolate factory workers in Hobart, will increase the cost to employers of sick leave and carer’s leave for anyone working longer than eight hours a day.
With thousands of local employers likely affected, Business SA has vowed to fight for changes to the law if a High Court challenge is unsuccessful.
Federal Attorney-General Christian Porter said sick leave was “an area of confusion for employers and employees alike” and urged employers to review their own payroll systems in light of the decision.
But the head of the state’s most powerful union has welcomed the decision.
A majority of the Federal Court on August 22 found that the Fair Work Act’s minimum 10 days’ paid personal leave should be calculated on the usual hours that a person works a day rather than a set 7.6 hours.
The Fair Work Act does not define what a day is, leading to argument about how to account for longer or shorter shifts.
The decision meant that shift workers at the Cadbury factory in Hobart won the right for their personal leave — sick or carer’s leave — to be based on the 12-hour shifts.
When a worker was absent on sick leave, Cadbury had been deducting 12 hours from their entitlement. As a result, the entitlement was exhausted in fewer than the 10 “days” they would have expected to be allowed as absences.
The court ruled Cadbury workers on 12-hour shifts were entitled to 120 hours of personal leave a year.
Business SA spokesman Anthony Penney told the Sunday Mail that many employers would need to “undertake a major reconciliation of the leave their employees have accrued”.
“Historically, going back decades, personal leave has been accrued on an hourly basis and has become the common and widely industrially-accepted practice,” Mr Penney, pictured, said.
“This Federal Court decision is completely inconsistent with industry practice, the explanatory memorandum to the Fair Work Act, advice publicised by the Fair Work Ombudsman and previous case law.
“The Federal Court decision may affect any SA business that employs shift workers, workers on variable patterns of work or part-timers.”
Mr Porter acknowledged the concerns of business.
“While a review of the judgment and its broader implications is undertaken, employers should review their own payroll systems in light of the decision,” he said.
Shop Distributive and Allied Employees’ Association secretary Josh Peak told the Sunday Mail the decision was consistent with the rules. “This groundbreaking decision upholds the principle that Australian workers are entitled to 10 days’ paid personal leave a year,” he said.
“If workers need the day off because they are sick or need to care for a loved one, they should be paid for their normal hours of work. This is something workers and unions fought for and won.”
AMWU Tasmanian secretary John Short, whose union represents the two Cadbury workers who fought the case, said the chocolate maker’s parent company Mondelez could apply to the High Court for an appeal.
Mondelez has until the end of this month to do so.