Paid Leave During Public Holidays – On leave or not?

A recent Full Federal Court of Australia (‘FCA’) decision has clarified the intention and scope of sections 89 and 98 of the Fair Work Act 2009 (Cth) (‘FW Act’), which ostensibly seek to preclude employers from deducting public holidays from annual leave or personal/carer’s leave balances, when such public holidays coincide with a period of paid annual leave or personal/carer’s leave. The decision is of particular interest to employers with a current enterprise agreement that incorporates leave entitlements in excess of the minimum entitlements contained in the National Employment Standards (‘NES’).

The dispute was predicated on whether the employer, Glendell Mining Pty Ltd (‘Glendell’) made unlawful deductions from the employee, Mr Noyes’ annual leave and personal/carer’s leave balance for six public holidays that fell on days during which Mr Noyes was on paid leave.

The Construction, Forestry, Mining and Energy Union (‘CFMEU’) on behalf of Mr Noyes argued that the contested deductions were made in contravention of sections 89 and 98 and of the FW Act (being part of the NES) which provide, respectively, that where a public holiday occurs during the period in which an employee is absent during a period of “paid annual leave” or personal/carers’ leave, the employee is taken not to have been on paid leave on the public holiday. Further, the CFMEU contended that making the deductions amounted to a breach of section 44 of the FW Act which precludes employers from contravening provisions of the National Employment Standards (‘NES’).

Glendell submitted that because Mr Noyes’ annual leave entitlement was derived from an enterprise agreement that provided for additional annual leave of in excess of the NES entitlement, section 89 of the FW Act did not apply and was intended only to apply to annual leave taken in accordance with the FW Act.

The FCA accepted Glendell’s submissions (in part) and held that given “paid annual leave” is defined in the FW Act, it is appropriate to infer that subsequent references to “paid annual leave” in the FW Act are properly read as being directed to the minimum entitlement consistent with the definition. Accordingly, the FCA held that section 89 of the FW Act did not have any application to the component of Mr Noyes’ annual leave that exceeded his minimum entitlement to paid annual leave pursuant to the FW Act, but would have applied to the portion matching the NES entitlement (which can be deduced from the employer’s records).

The FCA applied the same reasoning when construing section 98 of the FW Act and held that where an employee takes personal/carer’s leave in accordance with an enterprise agreement, only the portion of such leave equivalent to the NES entitlement is affected by section 98.

If you are seeking more assistance relating to the interaction between enterprise agreements and NES entitlements please contact Nick Stevens, Megan Cant or Jane Murray.

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