The recently announced decision means that employees can accrue and take leave according to their ordinary working hours.
Effectively, the High Court has overturned the Federal Court decision that was handed down in August 2019. Had the original decision been welcomed, it would have caused a significant amount of financial burden on businesses, and caused a disparity in entitlements for part-time employees leading employers to reconsider non-full-time working arrangements.
In a summary issued by the High Court of Australia, it states ‘A majority of the High Court rejected the "working day" construction and instead held that what is meant by a "day" or "10 days" must be calculated by reference to an employee's ordinary hours of work. "10 days" in s 96(1) is two standard five-day working weeks. One "day" refers to a "notional day" consisting of one-tenth of the equivalent of an employee's ordinary hours of work in a two-week period. Because patterns of work do not always follow two-week cycles, the entitlement to "10 days" of paid personal/carer's leave can be calculated as 1/26 of an employee's ordinary hours of work in a year.’
For more information and insight into Australia's payroll, tax, and leave regulations, browse our Australia Global Insight Guide.