High Court Decision clarifies meaning of a “Working Day” in the context of Personal Leave entitlements of employees

The High Court has recently overturned a decision of the Full Court of the Federal Court of Australia in relation to the entitlements of employees to personal leave.

The relevant provision of the Fair Work Act and the National Employment Standards provides that an employee is entitled to 10 days of personal leave per year.

The Full Court of the Federal Court had decided that an employee’s entitlement to 10 days of personal leave was an entitlement to be paid for 10 separate 24 hour periods, where the employee is not able to attend for scheduled work due to illness, injury or an unexpected emergency. The consequence of this was that for a part-time employee they were still entitled to 10 days of personal leave.

The High Court indicated that this could result in inequity where for example a person who worked two days per week would be entitled to the same number of days of personal leave as an employee who worked full-time five days per week.

The High Court decided that a day was to be looked at in the context of 10 days referring to 2 standard five-day working weeks. On this basis the Court decided that the relevant unit of a “day” was 1/10th of the ordinary hours worked in a two week period, or 1/26th of an employee’s ordinary hours of work in a year. For example, an employee who works 35 ordinary hours a week will receive 70 ordinary hours of personal leave per annum. However, an employee who works 14 ordinary hours a week will receive 28 ordinary hours of personal leave per annum. In both cases the employee has available two weeks of personal leave based on their usual working arrangements.

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