High Court rules against increasing paid sick leave for shift workers
Shift workers at Cadbury’s Tasmanian factory will miss out on extra leave entitlements following a landmark High Court decision.
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A push to give shift workers extra leave entitlements has been quashed by the High Court.
The Tasmanian Cadbury factory workers at the centre of the case work an average of three 12-hour shifts per week, and they and the Australian Manufacturing Workers Union (AMWU) had argued they were entitled to paid personal or carer’s leave the equivalent of 10 absences from work per year, instead of the eight they received.
Last year, the Federal Court ruled that permanent workers should get 10 days of sick leave paid at the same rate as their regular work day, but it was appealed by Cadbury’s parent company Mondelez International with the support of the Australian Government.
The original ruling was a controversial one among employers, as it meant those working a few long shifts each week could end up with more leave than those who worked a regular 9-to-5 week, with Ai Group estimating that extra leave would cost companies around $2 billion a year.
But this week the High Court rejected the AMWU’s argument that a Fair Work Act 2009 reference to “10 days” meant every worker regardless of their pattern of work or distribution of hours could be absent without loss of pay on 10 working days per year and overturned the original decision.
“That construction is rejected. It would give rise to absurd results and inequitable outcomes, and would be contrary to the legislative purposes of fairness and flexibility in the Fair Work Act, the extrinsic materials and the legislative history,” the court said, according to legal documents seen by news.com.au.
AMWU Tasmania State Secretary John Short said the decision was “disappointing”.
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“Cadbury workers do 12-hour days making the chocolate that we know and love. This decision means that they will get fewer days of personal leave per year than someone doing an office job working 9 to 5,” Mr Short said.
“COVID-19 has shown the importance of personal leave.
“The Government must change the law immediately to ensure that no matter whether you work 7.6 hours a day or 12 hours a day, you’ve got access to 10 days of personal leave per year.”
But it has been welcomed by industry groups, with Australian Payroll Association CEO Tracy Angwin claiming it was a “major relief” for employers and payroll professionals.
“The original decision would have placed significant additional financial burden on companies, and also created a disparity in entitlements for part-time employees, and a level of complexity that could lead to employers reconsidering flexible working arrangements,” she said.
“We are pleased to see that the historical understanding of personal leave accruals has been upheld.”
Dominic Fleeton, a partner at national specialist workplace firm Kingston Reid, said the ruling was a “major victory” for employers.
“With the decision aligning with the approach adopted by most employers since the introduction of the Act, it avoids the prospect of large-scale underpayment claims being made by employees seeking to recoup additional payments for personal leave taken in recent years,” he said.
Mr Fleeton said if the High Court had upheld the decision, it would have led to “inequalities among employees with different work patterns, resulting in unfair outcomes”.
“Having regard to the upheaval created by COVID-19 and the lasting impact the pandemic is likely to have on where, when and how employees perform their work, this is a particularly welcome aspect of the majority decision,” he said.
Originally published as High Court rules against increasing paid sick leave for shift workers