Australia: The cream rises to the top: Federal Court clarifies interaction of leave entitlements and public holidays

In Construction, Forestry, Mining and Energy Union v Glendell Mining Pty Limited [2017] FCAFC 35 (28 February 2017) (CFMEU v Glendell), the Federal Court of Australia has confirmed that provisions contained in the National Employment Standards (NES) regarding the taking of annual and personal/carer's leave on public holidays are concerned only with employees' entitlements to such leave arising under the NES.

Those provisions do not have application to any leave employees may be granted over and above the statutory minima.

CFMEU v Glendell: The background of the case

Glendell operates a black coal mine in the Hunter Valley, and its mineworkers are covered by industrial instruments that provide an entitlement to annual leave and personal/carer's leave above the minimum entitlements contained in the NES, as follows:

  • an entitlement to five or six weeks' annual leave, as compared with the NES entitlement to four weeks' paid annual leave; and
  • an entitlement to three weeks' personal/carer's leave, as compared with the NES entitlement to 10 days' paid personal/carer's leave.

The mine operated continuously during relevant periods, meaning that Glendell's mineworkers were regularly rostered to work on public holidays. They were remunerated by way of an annualised salary which incorporated a triple time payment for working on all rostered public holidays. Accordingly, when these employees were rostered to work a public holiday and sought to be absent from work on that public holiday, a day's leave was deducted from the relevant leave balance and the employees continued to be paid as normal.

The CFMEU challenged Glendell's practice of deducting annual and personal/carer's leave on rostered public holidays on the basis that this was contrary to sections 89 and 98 of the NES contained in the Fair Work Act 2009 (Cth) (FW Act). Those sections relevantly provide as follows:

  • Employee not taken to be on paid annual leave at certain times
  • Public holidays

    If the period during which an employee takes paid annual leave includes a day or part-day that is a public holiday in the place where the employee is based for work purposes, the employee is taken not to be on paid annual leave on that public holiday.

  • Employee taken not to be on paid personal/carer's leave on public holiday
  • If the period during which an employee takes paid personal/carer's leave includes a day or part-day that is a public holiday in the place where the employee is based for work purposes, the employee is taken not to be on paid personal/carer's leave on that public holiday.

At first instance, the Federal Circuit Court of Australia dismissed the CFMEU's challenge.1 The CFMEU then appealed to the Federal Court of Australia.

THE MAJORITY JUDGMENT

Before the Full Federal Court, as was accepted in the Federal Circuit Court, Glendell argued that the limitations contained in sections 89 and 98 of the FW Act regarding leave on public holidays apply only to the leave entitlements provided under the NES (NES leave), but not to any more generous leave entitlements an employee may otherwise have (non-NES leave).

This argument reflected that the NES is intended to operate as a minimum set of employment standards, and the FW Act leaves it open to an employer to supplement them in a relatively unconstrained manner.

A majority of the Full Federal Court (Justice White and Justice Bromwich) agreed with this argument, concluding that the limitations in sections 89 and 98 of the FW Act are only concerned with an employee's entitlement to NES leave. In doing so, they accepted the following two 'limbs' of Glendell's argument before them.

The 'section 12 definition' limb

The majority accepted that the statutory definitions of leave contained in the FW Act had a role to play, and the broader construction contended for by the CFMEU – which would extend the section 89 and 98 limitations to non-NES leave – should not be accepted.

Specifically, section 12 of the FW Act expressly defines 'paid annual leave' and 'paid personal/carer's leave' to be the leave to which an employee is entitled under the relevant section of the NES. The majority accepted that incorporating these defined terms into sections 89 and 98 has the effect that the limitations in those sections only apply to NES leave, and not to any more generous non-NES leave (e.g under an award or enterprise agreement).

The 'section 55 supplementary terms' limb

The majority also accepted that section 55 of the FW Act – which deals with the interrelationship between provisions of the NES and industrial instruments – makes it clear that the section 89 and 98 limitations do not apply to any supplementary entitlements contained in an award or agreement (such as the non-NES leave provided by Glendell's industrial instruments).

Regard was had to subsection 55(6) in particular, which provides that where an enterprise agreement gives an employee an entitlement that is the same as an NES entitlement, the provisions of the NES apply to that (same) entitlement. A note to subsection 55(6) supports this conclusion, giving the example that where an industrial instrument provides an entitlement to six weeks of paid annual leave, the provisions of the NES relating to accrual and taking of leave apply as a minimum standard to four weeks of that leave (i.e. the NES leave only).

The dissenting judgment

The dissenting judgment of Justice Siopis focussed on the perceived complexity in relation to the taking and accrual of leave if the leave is split between 'NES' and 'non-NES' leave, noting this would not have been Parliament's intention. His Honour also considered that 'paid annual leave' had an ordinary meaning that was not informed by a narrow reading of the definition.

The dissenting judgement also suggested that section 114 of the FW Act provided an independent right to be absent on a public holiday that ought not be eroded, and considered that the effect of Glendell approving the leave was to release the employee from the agreement to work on public holidays which was a matter within Glendell's control.

What are the implications for employers?

The Federal Court's decision in CFMEU v Glendell means that any additional paid annual or personal/carer's leave provided by an employer under an award or agreement can be treated as 'cream' that is not subject to the NES restrictions on making leave deductions on public holidays (subject of course to the terms on which the entitlement is granted).

The decision is a sensible one, and is consistent with common practices adopted by employers such as providing additional leave on a 'use it or lose it' basis. Arguably, it could extend to other requirements relating to the taking of leave additional to the NES – such as when leave can be taken.

The Federal Court's decision touches on a number of other practical implications relating to the taking of leave which will also be of interest to employers:

  • During the proceedings, the CFMEU argued that one week of leave equates to five days of leave, however the majority decision confirmed that this premise was unsound.2 These comments helpfully reiterate the true position in respect of leave entitlements for employees who do not work a standard Monday to Friday working week.
  • The majority decision lends support to the approach of deducting leave in ordinary hours when taken, which is a common deduction method applied in respect of shift workers in particular.3
  • The decision suggests that employers who adopt the practice of deducting leave on public holidays should be able to identify whether a particular public holiday falls during a period of NES leave or non-NES leave at the time the leave is taken.4 It would therefore be prudent for employers to consider how this could be best managed within their organisation, including by reviewing any leave policies and record keeping practices.

Footnotes

1 CFMEU v Glendell Mining Pty Ltd [2015] FCCA 3152.

2 [2017] FCAFC 35, para [129].

3 Ibid, para [134].

4 Ibid, para [102].

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.