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
Similar Articles
Relevancy Powered by MondaqAI
Carroll & O'Dea
 
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 Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Carroll & O'Dea
Related Articles
 
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions