THE High Court of Australia has overturned an earlier Federal Court ruling relating to the calculation of personal/carer’s leave.

Last year, the Full Federal Court found that section 96 of the Act entitled all employees (except casuals), regardless of their weekly hours of work, to 10 days of paid personal leave per year, with a “day” being the portion of a calendar day that would be allotted to working.

That decision was subsequently appealed to the High Court which overturned the ruling.

Maritime Industry Australia CEO Teresa Lloyd welcomed the High Court’s decision.

“The decision that personal/carer’s leave be calculated as a ‘notional day’ prevents an untenable situation in creating extra costs for businesses when they are going through a once in a lifetime pandemic, doing their best to prevent job losses and keep their organisations afloat,” Ms Lloyd said.

“It appears as though the High Court confirmed a long held understanding regarding how payment for a day of personal leave is to be calculated.

“This is important clarification for those industries where hours of work are condensed over shorter periods.

“The decision is a welcome return to a long understood status quo that was momentarily disturbed by a unique interpretation by the Federal Court, advanced by the AMWU, which the High Court ultimately found was an error.”

Partner with law firm Kingston Reid, Dominic Fleeton said the Court’s majority decision 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,” Mr Fleeton said.

The High Court majority found such an interpretation “would give rise to absurd results and inequitable outcomes and would be contrary to the legislative purposes of fairness and flexibility in the Act”.

Chief executive of the Australian Mines and Minerals Association, Steve Knott, also welcomed the High Court ruling.

“The Mondelez matter has essentially tested what ’10 days’ means, with the Federal Court interpreting this as 10 days at whatever number of hours an employee would ordinarily work in a 24-hour period – what is referred to as the ‘working day’ construction,” he said.

“The High Court has today confirmed this interpretation was wrong. It states the ‘working day’ construction ‘would give rise to absurd results and inequitable outcomes’ – employers could not have said it better themselves.

“The economy has dodged a significant bullet here at a time when we can least afford it.”