New Sick Leave Laws

Tania RichardsTania Richards Member Posts: 5
edited August 15 in Accounts Hosted
When will Reckon be updated so we can reflect the new sick leave laws so they accrue in days not hours.  I know initially it was thought to be just affecting shift workers but according to the information just updated on the Fair Work Website:

On 21 August 2019, the Full Federal Court of Australia handed down a decision in Mondelez Australia Pty Ltd v AMWU [2019] FCAFC 138. The decision deals with the method of accruing and taking paid personal/carer’s leave for the purposes of the National Employment Standards under the Fair Work Act 2009.

Although the Full Federal Court’s decision is the most recent authority on the current state of the law, the Australian Government and Mondelez Australia Pty Ltd have applied to the High Court seeking special leave to appeal the decision. As the outcome of those applications (and any subsequent appeal) may impact upon the FWO’s advice in these matters, the FWO will review its advice at the conclusion of those proceedings. In the interim, you may wish to seek your own legal advice on this issue.

In the decision, the majority of the Full Federal Court determined:

  • Full-time and part-time employees are entitled to 10 working days of paid personal/carer’s leave for each year of employment.
  • The leave protects those employees’ income when they are entitled to be absent from work due to illness or injury (or providing care or support to a family or household member who is ill, injured or suffering from an unexpected emergency).
  • The leave must be calculated in working days, not hours. A working day is the portion of a 24 hour period that an employee would otherwise be working.
  • An employee’s entitlement is expressly based upon time working for the employer and is expressly calculated in days.
  • For every day of personal/carer’s leave taken, an employer deducts a day from the employee’s accrued leave balance. If an employee takes a part-day of leave, then an equivalent part-day is deducted from the employee’s accrued leave balance.
I know it is being appealed but it is currently the law (starting 1/9/19) and as far as our employment lawyers are concerned we should be following it.

Comments

  • BruceBruce Member Posts: 240 ✭✭
    edited June 16
    This whole issue is going to cause significant angst for many of us until such time as it is fully resolved.

    In my opinion, any change in the system needs to built in a way in which it is optional for us to apply. 
    • my understanding is that not all awards describe personal/carer's leave in days; some use hours.
    • in addition not all employment law specialists appear to be as black and white about its application as (it appears) your employment lawyers are.   I know of at least one who is saying continue as you were but keep clear records so that if the decision is upheld it can be implemented.

    Also, can you elaborate on the "starting date of 1/9/19"; in my (quick) reading of Mondelez I didn't see anything which said the this was to be the starting date and I've seen a range of varying comments on the topic, e.g.
    • it should apply from the date of the decision which was pre 1/9/19
    • because the ruling is effectively clarifying what the National Employment standards mean, it should apply from the date of the standards
    • it should apply from the date the claim in respect of Mondelez was lodged
    • it should apply from 1/9/19 because this is convenient date.
    In short, this is giving me a headache!!


  • ZappyZappy Accredited Partner Posts: 4,659 ✭✭✭
    edited October 2019
    Bruce. I agree
  • Tania RichardsTania Richards Member Posts: 5
    edited October 2019
    I agree Bruce - it is going to cause great angst & yes it should be an optional days or hours tab.

    As far as the 1st September goes - I did get that from my employment lawyer but in re-reading their fact sheet that was the date they were working out the conversion for full time staff & doesn't say anything about the part time staff so I will need to clarify that.
  • Acctd4Acctd4 Accredited Partner Posts: 895 ✭✭
    edited October 2019

    Hi Tania

     

    • The leave must be calculated in working days, not hours. A working day is the portion of a 24 hour period that an employee would otherwise be working.

       

    • An employee’s entitlement is expressly based upon time working for the employer and is expressly calculated in days.

       

       

      I believe the reason for specifying “days” (over hours) is simply to confirm that the timeframe must be equivalent to an employee’s normal work day eg if they work a 9 hour day, the employee must accrue leave on - & be eligible for taking - a full 9-hr day.

       

      Whatever the employee’s usual daily hours are, their leave days will be the leave hours available divided by their normal daily hours eg if an employee has 30 Hrs Sick Leave available & they normally work a 10-hr day, they have 3 days.

       

      There are some Payroll programs that only calculate in days for a standard 7.6 hr day maximum & I think this is more the issue.  I don’t think Reckon’s Leave feature will need updating as the whole case that led to this was regarding leave on a longer work day.

       

      That’s my understanding.

       

      Shaz Hughes Dip(Fin) ACQ NSW, MICB

      Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

      (Specialising EXCLUSIVELY in Reckon Accounts / Reckon Accounts Hosted)

      Accounted 4 Bookkeeping Services

      Ballajura, WA

      0422 886 003

      [email protected]

      www.accounted4bs.com


    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    0422 886 003

    [email protected]

    https://www.accounted4bs.com/

  • Linda ABCLinda ABC Member Posts: 1,178 ✭✭
    edited June 30
    It should also be considered/noted when setting leave accruals - that whatever number of hours you use when calculating the 10 days personal and 20 days annual leave - is the same number of hours you use when leave is taken... for example - if a worker generally works 40 hours per week - then calculate your leave accrual in Reckon Hours - based on 160hrs of annual leave and 80 hours of personal leave - when they take a day of leave - then deduct 8hrs of accrual...(as opposed to accruing 152 hrs/76 hrs annual/personal - and deducting 7.6 hrs of leave when a day is taken...

    If this logic is applied to accruals for a shiftworker - then it should all work out?


  • ZappyZappy Accredited Partner Posts: 4,659 ✭✭✭
    edited October 2019
    Correct Linda. The percentage doesn't change because of the length of the work day. I really think it was just a try on by the union. Good on them for having a go though. They've been knocked around a bit. And if you read the back story, they never volunteered to move to ten hour days. It was forced on them.
  • BruceBruce Member Posts: 240 ✭✭
    edited June 16
    Linda, Kevin

    I disagree with your assessment in relation to accruing personal leave.  This is because for people who work long shifts, we now have a situation of varying entitlements.  Using Linda's 40 hour week example:
    • for a 'normal' worker working 5 x 8 hours, they are entitled to 10 days or 80 hours, but
    • for a worker who does 4 x 10 hour days, the effect of Mondolez is that the employee is entitled to 100 hours (=10 days) sick leave, and
    • It becomes even more complex for an employee who works uneven shifts; e.g for somebody who works 4 x 9 hours days and 1 x 4 hour day they would be entitled to between:
      - 40 hours if all their 10 sick days were taken on 4 hour days 
      - 90 hours if all 10 sick days taken on the 9 hour days.
    A couple of additional comments re entitlements
    • the ruling as it stands only relates to personal leave, it does NOT relate to annual leave
    • as best I can tell, the same issue will apply to the personal leave for part time employees.   So for an employee working 3 x 8 hour days/week, they will be entitled to 80 hours (the same as our 'normal' employee above.)
    Enough about entitlements.   Accruing becomes more complex, and I firmly believe that clarification is going to be needed from the authorities.  A couple of cases that spring to mind
    • For those people who don't work the same number of hours every day how much do I accrue - I can't predict when they are going to take their personal leave.   (Not as big a problem if unused personal leave is not carried forward from year to year, but unfortunately none of my clients fit into this category.) 
    • for employees who have been working odd hours, what is their "starting accrual" if they change their regular working patterns.  
    Sorry to be so long winded, but it is going to need a better mind than mine to resolve this!
  • Acctd4Acctd4 Accredited Partner Posts: 895 ✭✭
    edited October 2019

    Hi Bruce

     

    It certainly complicates things but yes, the whole premise of the case is because an employee can’t be disadvantaged financially due to being off work on (Sick) Leave.  As a result, the proposal is that they must be paid Sick Leave for the same number of hours as their ordinary work day.

     

    So whatever an employee’s usual work day hours are on the day(s) they take leave are what is to be paid.

     

    The entitlement determination is more about the hours & yes, you are exactly correct in that an employee who works a longer “ordinary day” (eg a 9 hour day rather than an 8 hour day) will be entitled to more Leave “Hours” because their “ordinary day” is longer.  However, it doesn’t change their “number of days” entitlement which hasn’t been affected.

     

    In your example of an employee working 3 x 8 ordinary-hr days/week (eg 24 hrs p/wk), their leave entitlement is still pro rata’d as has been the case for a long time. 

    They should be accruing per hour on the hours worked & their entitlement will still be the equivalent of 20 days (4 weeks) AL & (10 days) 2 wks SL HOWEVER, their “week” is 24 hrs so:

     

    • 24 Hrs x 2 weeks = 48 Hrs SL entitlement

    (This equals their 3 x 8-hr days over the 2 weeks or 6 out of the 10 days)

     

    • 24 Hrs x 4 weeks = 96 Hrs AL entitlement

    (This equals their 3 x 8-hr days over the 4 weeks or 12 out of the 20 days)

     

    It doesn’t matter how many “days” they actually use it over though (up to their ordinary work day hours) as this doesn’t change the accrued entitlement - & therefore payment they receive - for the above.

    They could take 1 hour on 1 day, 7 hours on another etc   

     

    Whilst the Mondolez case specifically referred to Sick Leave, if & when the Law is officially updated, it can only be expected that this will also apply to any other accruable-on-hours-worked leave (eg Annual) due to the whole reasoning behind the change.

     

    I’ve always found it best practice to accrue Sick Leave (SL), Annual Leave (AL) & LSL “Per Hour” on an employee’s ordinary permanent hours – whether that be a 4-hour day or a 10-hr day.

    (There are obviously a few exceptions but as a general rule, most hours paid at ordinary rates - eg OTE - should be accruing applicable Leave)

     

    “Per Hour” accruals ensure that part-time, shift variations & changes to regular working patterns are all accounted for in the correct accrual proportions as & when the employee works.

    (SL, AL & LSL all carry forward from year to year as the historical balances are based on whatever hours have been previously worked)

     

    (NB As most of the Leave types above are still accruable whilst on/taking/payment of Leave, “worked” also refers to paid leave taken where applicable)

     

    Hope that helps  :)

     

     

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

    (Specialising EXCLUSIVELY in Reckon Accounts / Reckon Accounts Hosted)

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    0422 886 003

    [email protected]

    www.accounted4bs.com


    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    0422 886 003

    [email protected]

    https://www.accounted4bs.com/

  • Lance ArthyLance Arthy Member Posts: 9
    edited June 10
    Nice discussion but the main question is still unanswered, when will the Reckon software record days, not hours?

    The Fair Work Ombudsman rep. I've been dealing with says it's up to software providers to make the change.
  • BruceBruce Member Posts: 240 ✭✭
    edited June 16
    Lance
    In my opinion, short term you are going to need to continue to record both hours and days.   

    Reason being that the case is being appealed so things aren't finalised yet (and if I was a software provider I would be reluctant to change any systems yet).    Something else which might further complicate matters are the working parties that the PM has announced - they might come up with something else again.

    Recording both is clearly a pain in the butt and means some records outside of the payroll system.  My clients don't have large numbers of employees so it isn't too much trouble, but if they were largish well then ......
  • BruceBruce Member Posts: 240 ✭✭
    edited August 17
    There has been an update in relation to the Mondelez case and the accrual of leave for people who work long shifts.   

    The High Court has overruled the Federal Court and ruled that full time employees accrue and use Personal (sick) Leave based on "hours worked" rather than "days worked".    See this article for more details https://www.theage.com.au/politics/federal/inequitable-outcomes-unions-lose-bid-to-up-sick-leave-20200813-p55lb2.html

    It will be interesting to see if anything else emerges from this but as best I, as a "bush lawyer" rather than as a "industrial lawyer" can tell,
    • we continue to accrue leave the same way we have done for years 
    • the issue is dead unless legislation is introduced to change the way personal leave accrues
  • ZappyZappy Accredited Partner Posts: 4,659 ✭✭✭
    edited August 13
    Good job Bruce. Thanks for the update
  • Kris_WilliamsKris_Williams Member Posts: 1,087 ✭✭
    edited August 14
    I may have missed something here but I accrue annual leave and sick leave per hours worked., I used to do it per pay but changed some years ago for a pharmacy business where many staff are part time
  • Lance ArthyLance Arthy Member Posts: 9
    edited August 14
    Yeah, I saw the same report on another news service.

    This case, so far, has been about the eligibility and calculation of how much leave is available. I disagree this is dead because the issue for me is Fairwork requires reporting software to state days of leave owing.
  • BruceBruce Member Posts: 240 ✭✭
    edited August 14
    Lance
    I totally disagree with you.   Fairwork does not require days, or even hours, to be reported on pay slips. 

    See https://www.fairwork.gov.au/pay/pay-slips-and-record-keeping/pay-slips which states that:
    Should leave balances be on a pay slip?
    While it's best practice to show an employee's leave balances on their pay slip, it’s not a requirement. Employers do need to tell employees their leave balances if they ask for it.
  • BruceBruce Member Posts: 240 ✭✭
    edited August 14
    Kris
    You have missed the potential for an administrative nightmare.  Well done on not missing any sleep over the issue. ;)

    You can continue to accrue/charge personal leave based on hours worked and blithely ignore the rest of this thread.
  • Kris_WilliamsKris_Williams Member Posts: 1,087 ✭✭
    edited August 14
    So am I doing it wrong, after all this?
  • Linda ABCLinda ABC Member Posts: 1,178 ✭✭
    edited August 14
    No - accruing by hour worked is fine for part timers... I also have pharmacy clients - and its a bit tricky sometimes if they do lots of overtime etc - those that have a contract for full time work but work hours that go up and down around full time - I usually set per pay now - as for awhile there the other method was accruing more than the required personal & annual leave.
  • ZappyZappy Accredited Partner Posts: 4,659 ✭✭✭
    edited August 14
    Probably
  • Acctd4Acctd4 Accredited Partner Posts: 895 ✭✭
    edited August 14

    I've always set Leave up to accrue “per Hour” – that way, I know it always calculates correctly regardless of any increases/decreases in employee hours  :)

     

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    0422 886 003

    [email protected]

    www.accounted4bs.com

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

    Accounted 4 Bookkeeping Services

    Ballajura, WA

    0422 886 003

    [email protected]

    https://www.accounted4bs.com/

  • Sylar LucasSylar Lucas Member Posts: 1
    edited August 14
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  • ZappyZappy Accredited Partner Posts: 4,659 ✭✭✭
    edited August 14
    Shazz that's what I said up there if you go back to the start of the thread. Thw effect of this court decision would invalidate your approaxh
  • ZappyZappy Accredited Partner Posts: 4,659 ✭✭✭
    edited August 14
    Yeah and why would I need help? Do I look like an idiot?
  • Lance ArthyLance Arthy Member Posts: 9
    edited August 15
    My mistake for poor choice of words. I should've said "... Fairwork requires reporting software to calculate days of leave owing".


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