The rules around sick leave for more than a million shift workers have been upended in a controversial industrial umpire’s decision that has employers worried they may face a massive bill for backpay and sparked an urgent legal intervention from the federal government.
The Fair Work Commission recently pulled the rug on the standard practise employers used of providing an average of 76 hours of paid leave based on the average 7.6-hour work day and the national minimum standard of 10 days of sick leave a year.
The Commission’s ruling, which centred on a pay deal for employees at pharmaceutical company AstraZeneca, found a worker’s typical shift should be used to calculate the total number of hours meaning a shift-worker who does usually a 12 hour shift should receive 120 hours of paid leave per year.
The ruling, in favour of the Australian Workers Union, has alarmed business groups and employers who have now turned their attention to a fresh test case to be brought in the Federal Court. That case will use conditions at manufacturer Mondelez in Tasmania to argue the commission’s rationale should be overturned.
Australian Industry Group chief executive Innes Willox said that case would now have “implications for most employers in Australia”.
He said employees who work 38 hours per week were typically credited with 76 hours of paid personal/carer’s leave per year, regardless of whether they worked 7.6, 8, 10 or 12 hours per day.
“The current enterprise agreement agreed to by Mondelēz International, applies to employees at the… plant and states that they are entitled to 96 hours of personal/carer’s leave per year. This is a lot more generous that the 76 hours employees are entitled to … if the Act is interpreted in the manner in which Ai Group and Mondelēz contends.”
Federal Workplace Minister Craig Laundy is also backing this action.
“It is because of this broader significance of the correct interpretation of the paid personal/carer’s leave provisions in the Fair Work Act that Minister Laundy made an application to intervene in the Mondelez matter,” the minister’s spokesman said.
University of Adelaide law professor Andrew Stewart said the legislation around the ten day entitlement was not as clear as it could be after the then Labor government repealed WorkChoices.
“If I fall sick on the days I am working, I am entitled to be paid for the hours I would have worked on that day,” he said.
Peter Kelly, a production operator at AstraZeneca, said the entitlement he received under the old methodology was “short” of the 10 days or 120 hours per year he was owed.
“If you have an entitlement of seven days you exhaust it and after that if you get sick you don’t get any pay for the day. That’s happened a couple of times,” he said.
The Australian Workers Union said the Commission ruling meant thousands of Australians could now be eligible for millions of dollars in backpay.
Economist Jim Stanford from the Australia Institute agreed saying about 16 per cent of employees are shift workers.
“It is not far fetched at all that this would effect the incomes of workers to the tune of hundreds of millions of dollars,” he said.
AWU national secretary Daniel Walton said the issue “potentially affects every employer in the country that employs shift-workers.”
He has written to the Fair Work Ombudsman demanding it correct the “bum advice” it has been giving to employers, which the Fair Work Commission had contradicted.
“Employers who have been taking the FWO’s advice and only paying their employees for 7.2 hours when they are missing 12-hour shifts on leave are likely liable to backpay stretching back six years,” he said.
Crane driver Bill Hassan who works for a different company in Melbourne has been a 12-hour shift worker for 36 years. He said he was only entitled to 76 hours of sick leave, well short of 120 hours.
“If you got a bad flu and you were off five or six days, you’ve used up your days,” he said.
A spokeswoman for the Fair Work Ombudsman said the method of accruing and taking of personal/carer’s leave for the purposes of the National Employment Standard was the subject of legal proceedings before the Federal Court.
“The decision in these proceeding may impact upon the FWO’s advice on these matters,” she said. “The FWO will be reviewing its advice at the conclusion of these proceedings.”
A hearing has been scheduled for September 6 to hear arguments about the referral to the Full Court.
A spokeswoman for AstraZeneca said it was reviewing “and considering carefully” the Fair Work Commission’s comments. “AstraZeneca’s intention has been, and continues to be, to calculate personal leave entitlements in accordance with the relevant statutory legislation in a way that is fair and equitable to all employees,” the spokeswoman said.