KIEFEL CJ, NETTLE AND GORDON JJ. These appeals are concerned with how the entitlement to paid personal/carer's leave is calculated under s 96(1) of the Fair Work Act 2009 (Cth). That sub-section provides that "[f]or each year of service with his or her employer, an employee is entitled to 10 days of paid personal/carer's leave". The issue is whether "day" in "10 days" in s 96(1) refers to (i) a "notional day", consisting of one‑tenth of the equivalent of an employee's ordinary hours of work in a two‑week period, or (ii) a "working day", consisting of the portion of a 24-hour period that would otherwise be allotted to working and thereby authorising an employee to be absent without loss of pay on ten working days per year.
For the reasons that follow, the answer is the former. Section 96 confers a progressively accruing entitlement to paid personal/carer's leave equivalent to an employee's ordinary hours of work in a two-week period, for each year of service. "10 days" 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. To account for the fact that patterns of work or distribution of hours do not always follow two-week cycles, the entitlement can also be calculated as 1/26 of an employee's ordinary hours of work in a year. That construction of s 96 ("the 'notional day' construction") is consistent with the legislative purposes of the Fair Work Act, the extrinsic materials and the legislative history.
The alternative construction is that the reference to "10 days" entitles every employee, regardless of their pattern of work or distribution of hours, to be absent without loss of pay on ten working days per year ("the 'working day' construction"). That construction is rejected. It would give rise to absurd results and inequitable outcomes, and would be contrary to the legislative purposes of fairness and flexibility in the Fair Work Act, the extrinsic materials and the legislative history. The appeals should be allowed.
Facts and background
The facts were agreed. Mondelez Australia Pty Ltd ("Mondelez"), a national system employer, operates four food manufacturing plants in Australia, including a Cadbury plant at Claremont in Tasmania.
Mondelez is a party to the Mondelez Australia Pty Ltd, Claremont Operations (Confectioners & Stores) Enterprise Agreement 2017 ("the EBA"). The EBA came into effect on 11 May 2018 and applies to Mondelez, to the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union ("the Union"), to Ms Triffitt and to Mr McCormack. Ms Triffitt and Mr McCormack are members of the Union and are national system employees who work full-time at the Claremont plant.
Clause 32 of the EBA provides that the ordinary hours of work are 36 hours per week and that shift lengths may be eight or 12 hours. Ms Triffitt and Mr McCormack each work 36 hours per week averaged over a four‑week cycle and work these ordinary hours in 12‑hour shifts. The appeals proceeded on an assumption that they worked an average of three shifts per week.
Clause 24 of the EBA, headed "Personal / Carer's Leave", provides, relevantly, as follows:
"24.1 Employees (other than employees on 12 hour shifts)
Personal/Carer's Leave including sick leave consists of 80 hours of paid personal leave per annum. This will be available to the employee on their anniversary date. Unused leave is cumulative (with no cap). Accrued leave can be used for carer's leave.
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24.2 Employees working on 12 hour shifts
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On the introduction of the new payroll system in 2011 the entitlement to Personal/Carer's Leave (including sick leave) for employees working on 12 hour shifts will be 96 hours of paid personal leave per annum. This will be available to the employee on their anniversary date and any unused leave is cumulative (with no cap). Accrued leave can be used for carer's leave. A pro rata adjustment will occur for the period between the introduction of this arrangement and the employees [sic] next anniversary date."
In accordance with cl 24.2, Mondelez credits Ms Triffitt and Mr McCormack with 96 hours of paid personal/carer's leave per year of service. When Ms Triffitt or Mr McCormack takes paid personal/carer's leave for a single 12-hour shift, Mondelez deducts 12 hours from their accrued balance. Thus, over the course of one year of service, Ms Triffitt and Mr McCormack accrue a quantum of paid personal/carer's leave that is sufficient to cover eight 12-hour shifts.
Mondelez sought the following declarations in the original jurisdiction of the Federal Court of Australia:
"1. On proper construction of the [EBA]:
a. When [Ms Triffitt] is absent for a 12-hour shift on paid personal/carer's leave, 12 hours is to be deducted from her accrued paid personal/carer's leave balance.
b. When [Mr McCormack] is absent for a 12‑hour shift on paid personal/carer's leave, 12 hours is to be deducted from his accrued paid personal/carer's leave balance.
2. On proper construction of the [EBA] and of ss 96 and 99 of the Fair Work Act ...:
a. [Ms Triffitt's] entitlement to paid personal/carer's leave under cl 24 of the [EBA] is more beneficial to her than her entitlement to paid personal/carer's leave under the National Employment Standards.
b. [Mr McCormack's] entitlement to paid personal/carer's leave under cl 24 of the [EBA] is more beneficial to him than his entitlement to paid personal/carer's leave under the National Employment Standards."
In the Full Court, Mondelez submitted that the word "day" in s 96(1) of the Fair Work Act consists of an employee's average daily ordinary hours of work based on an assumed five-day working week - that is, average weekly ordinary hours divided by five. The Minister intervened to support that construction. Mondelez's construction gives the same result as the "notional day" construction described above. An employee's average weekly ordinary hours of work divided by five is the same as one‑tenth of the equivalent of an employee's ordinary hours of work in a two-week period. The Union, Ms Triffitt and Mr McCormack ("the Union parties") proposed a different construction. They submitted that a "day" in s 96(1) means a "24 hour period".
The majority (Bromberg and Rangiah JJ) refused to make the declarations sought by Mondelez. Their Honours rejected Mondelez's construction and instead held that "day" in s 96(1) refers to "the portion of a 24 hour period that would otherwise be allotted to work". O'Callaghan J dissented. His Honour adopted Mondelez's construction of s 96(1) and would have declared that Ms Triffitt and Mr McCormack's entitlement to paid personal/carer's leave under the EBA is more beneficial than that under the National Employment Standards ("the NES").
Mondelez and the Minister both appeal on the ground that the majority erred in construing "day" in s 96(1) as a "working day".
Fair Work Act
It is necessary to construe the expression "10 days" in s 96(1) in the context of the Fair Work Act as a whole and, in particular, by reference to the provisions described below. It is necessary to construe the expression also in light of the relevant extrinsic materials and the legislative history. Those materials, and that history, show not only continuity between the Workplace Relations Act 1996 (Cth) and the Fair Work Act but also that the provision in issue is to be understood as a restatement, in simpler terms, of long-standing provisions of industrial relations law containing minimum employment conditions.
It is necessary to start with the statute. The object of the Fair Work Act is to "provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians". That object is sought to be achieved, in part, by:
"(a) providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia's future economic prosperity ...; and
(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the [NES], modern awards and national minimum wage orders; and
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(d) assisting employees to balance their work and family responsibilities by providing for flexible working arrangements".
The stated objects show that the Act is intended to provide fairness, flexibility, certainty and stability for employers and their employees. "Fairness" necessarily has a number of aspects: fairness to employees, fairness between employees, fairness to employers, fairness between employers, and fairness between employees and employers.
The NES are in Pt 2‑2 of the Act. The NES are "minimum terms and conditions that apply to all national system employees". The NES recognise that employees have different patterns of work and use the concept of "ordinary hours of work", which can readily be applied to different patterns of work, so employees are treated fairly.
The terms and conditions of the employment of national system employees may also be governed by a "modern award" or an "enterprise agreement". A modern award or an enterprise agreement may include terms that are ancillary or incidental to an employee's entitlement under the NES or that supplement the NES. However, it may contain those terms "only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the [NES]". The Fair Work Commission must approve an enterprise agreement if, among other things, the employee would be "better off overall" if the enterprise agreement applied to the employee than if the relevant modern award applied to the employee.
Section 147 provides that a modern award must include terms specifying, or providing for the determination of, an employee's "ordinary hours of work". The note to s 147 provides that "[a]n employee's ordinary hours of work are significant in determining the employee's entitlements under the [NES]". If there is an enterprise agreement, it is to be expected that it would state an employee's ordinary hours of work. Here, under the EBA, it was agreed that the ordinary hours of work were 36 hours per week.
The "ordinary hours of work" for a national system employee to whom neither a modern award nor an enterprise agreement applies is addressed in s 20 of the Fair Work Act. For these employees, "ordinary hours of work" is defined to mean "the hours agreed by the employee and his or her national system employer as the employee's ordinary hours of work" or, if there is no agreement, 38 hours for a full-time employee or, for an employee who is not full-time, the lesser of 38 hours and the employee's usual weekly hours of work.
One matter addressed by the NES is the entitlement of national system employees to paid personal/carer's leave. Section 96 establishes the entitlement of these employees to paid personal/carer's leave and the rate at which it accrues. It provides:
"Amount of leave
(1) For each year of service with his or her employer, an employee is entitled to 10 days of paid personal/carer's leave.
Accrual of leave
(2) An employee's entitlement to paid personal/carer's leave accrues progressively during a year of service according to the employee's ordinary hours of work, and accumulates from year to year." (emphasis added)
Consistent with the stated objects of the Fair Work Act, s 96(1) (as part of the NES) is intended to provide fair, relevant and enforceable minimum terms and conditions.
Payment of the leave is addressed in s 99. It provides:
"If, in accordance with this Subdivision, an employee takes a period of paid personal/carer's leave, the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work in the period." (emphasis added)
That section provides the rate at which the leave is paid: it is the employee's base rate of pay for their ordinary hours of work in the period. The term "base rate of pay" is relevantly defined in s 16 to be "the rate of pay payable to the employee for his or her ordinary hours of work". Thus, both ss 96 and 99 compel the conclusion that it is necessary to ascertain an employee's ordinary hours of work and the rate of pay payable for that work in order for the employee to be paid for that leave. Moreover, regardless of the period of leave taken - hours or days - employees will be paid at that rate for the hours that they are absent from work.
Other provisions of the Fair Work Act are relevant to the construction of s 96(1). Sections 100 and 101 address "cashing out" paid personal/carer's leave. Section 100 states that "[p]aid personal/carer's leave must not be cashed out, except in accordance with cashing out terms included in a modern award or enterprise agreement under section 101". Section 101(1) provides that "[a] modern award or enterprise agreement may include terms providing for the cashing out of paid personal/carer's leave by an employee". Section 101(2) sets out the required terms, which relevantly include that:
"(c) the employee must be paid at least the full amount that would have been payable to the employee had the employee taken the leave that the employee has forgone."
Like ss 96 and 99, the "cashing out" provisions convey that it is necessary to ascertain an employee's ordinary hours of work and the rate of pay payable for that work.
As s 96(2) states, an entitlement to paid personal/carer's leave accrues progressively in the course of a year of service, for all employees, by reference to ordinary hours worked and not by reference to days or working patterns. All employees working the same number of ordinary hours accrue paid personal/carer's leave at the same rate and, after working the same number of ordinary hours, are entitled under s 99 to be paid for the same number of ordinary hours, regardless of whether their ordinary hours over a two-week period are worked across ten, six, or five days in that period. Under ss 96, 97 and 99, the taking of accrued paid personal/carer's leave is calculated in the same manner. For each hour of accrued paid personal/carer's leave which is taken, the accrued entitlement is reduced by the actual number of hours taken, regardless of the employee's pattern of work.
Therefore, in s 96(1), read in its statutory context, what is meant by a "day" or "10 days" must be calculated by reference to an employee's ordinary hours of work. However, the text of the Fair Work Act does not describe how a "day" or "10 days" is calculated by reference to an employee's ordinary hours of work. In an employment context, it is to be expected that "10 days" might refer to two standard five-day working weeks. That accommodates, as it must, that employees' working patterns are not uniform. Construing the expression "10 days" as referring to the equivalent of an employee's ordinary hours of work in a two-week period, or 1/26 of their ordinary hours of work in a year, is consistent with the purpose of the paid personal/carer's leave scheme and, in particular, that of s 96, which is aimed at protecting employees against loss of earnings when they are unable to work for one of the reasons set out in s 97. And it is for those reasons that the scheme confers leave entitlements by reference to an employee's ordinary hours of work, rather than the number of days worked by an employee. The purpose of s 96 is to protect employees against loss of earnings, and it does that by reference to their ordinary hours of work. As a result, the amount of leave accrued does not vary according to their pattern of hours of work.
The Union parties submitted that the role of "ordinary hours of work" in the paid personal/carer's leave scheme is limited: first, to identifying the type of work by which an employee accrues paid personal/carer's leave under s 96(2), that is, an employee's "ordinary hours of work" as opposed to unpaid leave or overtime; and, second, to explaining how an employee is to be paid for a period of paid personal/carer's leave under s 99. That submission is rejected. The expression "ordinary hours of work" is significant not only in those two respects but also in calculating the amount of an employee's entitlement to paid personal/carer's leave.
It is necessary to address other aspects of the Fair Work Act. As explained above, its objects include "providing workplace relations laws that are fair to working Australians, [and] are flexible for businesses", and "ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the [NES]". Neither of those objects detracts from the significance of an employee's ordinary hours of work as the mechanism for determining the loss of earnings that the employee is protected against. The notion of fairness encompasses fair treatment as between employees according to their ordinary hours of work, regardless of the pattern in which those hours are worked. Fairness and enforceability may both be served by employers and employees both being able to know, at any point in time, precisely how much paid personal/carer's leave an employee has accrued.
The "notional day" construction also conforms with the Fair Work Act more broadly. First, the similarity of language and concepts in the paid personal/carer's leave scheme in Subdiv A of Div 7 of Pt 2-2 and the paid annual leave scheme in Div 6 reflects that "10 days" (in s 96(1) in respect of paid personal/carer's leave) and "4 weeks" or "5 weeks" (in s 87(1) in respect of paid annual leave) progressively accrue according to an employee's "ordinary hours of work" and are cashed out in the same way.
Second, within Subdiv CA of Div 7 of Pt 2-2, which addresses unpaid family and domestic violence leave, s 106E states that "[w]hat constitutes a day of leave for the purposes of this Subdivision is taken to be the same as what constitutes a day of leave for the purposes of section 85 and Subdivisions B and C". Section 106E recognises that "day" has a different meaning in Subdiv A of Div 7 (which addresses paid personal/carer's leave) from those provisions dealing with unpaid pre-adoption leave, unpaid carer's leave, compassionate leave, and unpaid family and domestic violence leave. In those provisions referred to in s 106E, a "day" is not calculated according to an employee's ordinary hours of work. Rather, they authorise an absence for the portion of the 24-hour period that would otherwise be allocated to working. That is unsurprising. Unlike paid personal/carer's leave, none of the types of leave mentioned in s 106E accrues according to an employee's ordinary hours of work. And unlike paid personal/carer's leave, none of the types of leave mentioned in s 106E is paid (except compassionate leave).
Third, the definition of "working day" in the Fair Work Act as "a day that is not a Saturday, a Sunday or a public holiday" recognises the weekend, consistent with the concept of a five-day working week, but also reinforces the conclusion that where "day" is used in the Act, it takes its meaning from the context.
The "notional day" construction adopted is further reinforced by the Explanatory Memorandum to the Fair Work Bill 2008 (Cth). After stating that the objectives of the Bill were, among others, to "provide flexibility and stability for employers and their employees" through modern awards and to "promote[] productivity and fairness through enterprise agreements that are tailored to suit the needs of businesses and the needs of employees", the Explanatory Memorandum addressed paid personal/carer's leave. It stated that under the NES "[t]he minimum entitlement to paid personal/carer's leave is ten days for each year of service"; "[l]eave accrues progressively according to an employee's ordinary hours of work and is cumulative"; and in relation to payment, "[i]f an employee takes a period of paid personal/carer's leave, the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work in the period", unless more generous payment terms are agreed.
The Explanatory Memorandum described the operation of the scheme in these terms:
"The concept of an employee's ordinary hours of work is central to the paid personal/carer's leave entitlement as it determines the rate at which the entitlement accrues and also the entitlement to payment when leave is taken.
General principles
Leave accrues according to an employee's ordinary hours of work (which may be set out in a modern award or enterprise agreement, or are calculated in the manner set out in clause 20). Such hours are often expressed as a number of hours per week. In effect, therefore, the Bill ensures an employee will accrue the equivalent of two weeks' paid personal/carer's leave over the course of a year of service.
Although this is expressed as an entitlement to 10 days (reflecting a 'standard' 5 day work pattern), by relying on an employee's ordinary hours of work, the Bill ensures that the amount of leave accrued over a period is not affected by differences in the actual spread of an employee's ordinary hours of work in a week.
Therefore, a full-time employee who works 38 hours a week over five days (Monday to Friday) will accrue the same amount of leave as a full-time employee who works 38 ordinary hours over four days per week. Over a year of service both employees would accrue 76 hours of paid personal/carer's leave[.]
Similarly, the requirement to pay an employee for their absence on the basis of their ordinary hours of work for the period of the absence means that the employee is entitled to be paid for his or her ordinary hours of work on the days in the week they would have worked but for being absent from work on paid personal/carer's leave (ie, excluding overtime)." (emphasis added)
That description records that the Bill was to "ensure[] that the amount of leave accrued over a period [was] not affected by differences in the actual spread of an employee's ordinary hours of work in a week". The three examples set out under the description just quoted "illustrate the intended operation of the accrual and payment provisions", namely:
"• Tulah is a full-time employee whose ordinary hours of work are 38 per week. On average, she also works an additional two hours of overtime per week. Tulah will accrue ten days' personal/carer's leave based on her ordinary hours of work (76 hours) over a year of service. If she takes a week's personal/carer's leave because she is sick or to care for a member of her immediate family who is sick, she will be entitled to be paid for 38 ordinary hours at her base rate of pay.
• Brendan is a part-time employee whose ordinary hours of work are 19 per week. He will accrue half the amount of paid personal/carer's leave over a year of service as Tulah (38 hours), reflecting the lower number of ordinary hours that he works. This is also reflected in how much he is entitled to be paid if he takes a week's paid personal/carer's leave. If he takes a week's personal/carer's leave, he will be entitled to be paid for 19 ordinary hours at his base rate of pay.
• Sudhakar is a full time employee who has entered into a permissible averaging arrangement under the NES and works an average of 152 hours every four weeks (based on 38 ordinary hours per week). The number of ordinary hours that Sudhakar works on any given day may vary according to the averaging arrangement. However, over a year he accrues ten days (76 hours) of paid personal/carer's leave. If he is sick and takes leave for a day, he will be entitled to be paid for the number of ordinary hours he was rostered to work on that day (but not for any additional overtime hours that he was to work).
If an employee changes the basis of their employment (eg, if the employee changes from a full-time employee to a part-time employee), they would not lose accrued leave, although the future rate of accrual will be different (based on the employee's new ordinary hours of work)." (emphasis added)
Each example is consistent with the "notional day" construction: each example explains that the number of ordinary hours an employee works per week determines the amount of paid personal/carer's leave, measured in hours, that the employee accrues over a year of service (regardless of the number of days in a week that the employee works). The third example is consistent with the expression "10 days" reflecting two standard five-day working weeks when it states that for an employee working an average of 152 hours every four weeks, "over a year he accrues ten days (76 hours) of paid personal/carer's leave". And, as the Union parties properly conceded, the third example in the Explanatory Memorandum cannot be reconciled with the "working day" construction adopted by the majority in the Full Court below and advanced by the Union parties in this Court.
The "notional day" construction is also consistent with the legislative history. The Workplace Relations Act was the predecessor to the Fair Work Act. As the Explanatory Memorandum to the Fair Work Bill stated, the operation of the relevant provisions of the Workplace Relations Act was as follows:
"Personal leave (includes sick leave, carer's leave and compassionate leave): an employee is entitled to ten days of paid personal leave per annum after 12 months of service for an employee who works 38 hours per week. This entitlement is pro-rated for employees who have not completed 12 months service."
The proposed changes to personal/carer's leave (as compared to the Workplace Relations Act) were limited:
"Personal/carer's leave and compassionate leave: the NES will not change the quantum of the entitlement to personal/carer's leave and compassionate leave but will extend unpaid compassionate leave to casual employees. In addition, the number of paid carer's leave days which can be used is no longer capped at 10 days per year."
That statement in the Explanatory Memorandum was accurate. The paid personal/carer's leave provision in the Workplace Relations Act, originally enacted as s 93F(2), provided as follows:
"Accrual
(2) An employee is entitled to accrue an amount of paid personal/carer's leave, for each completed 4 week period of continuous service with an employer, of 1/26 of the number of nominal hours worked by the employee for the employer during that 4 week period.
Example: An employee whose nominal hours worked for an employer each week over a 12 month period are 38 hours would be entitled to accrue 76 hours paid personal/carer's leave (which would amount to 10 days of paid personal/carer's leave for that employee) over the period." (emphasis added)
The Explanatory Memorandum to the Bill that introduced s 93F(2) stated:
"This is equivalent to two weeks of personal leave for employees whose hours do not change over the course of a 12 month period - for example, an employee whose nominal hours worked for a 12 month period were 38 hours per week would be entitled to 76 hours of personal leave (which is two weeks of 38 hours each). However, the formula also ensures that employees whose hours vary accrue appropriate amounts of personal leave." (emphasis added)
Similarly, s 93I(2) set an annual limit on paid carer's leave. It contained the following example:
"Example: An employee whose nominal hours worked for an employer each week were 38 hours during a 12 month period of continuous service with the employer would not be entitled to take any paid carer's leave from his or her employment with the employer if the employee had, during the period, already taken 76 hours paid carer's leave (which amounted to 10 days paid carer's leave for that employee) from that employment." (emphasis added)
Section 247, which addressed payment for the leave, provided as follows:
"If an employee takes paid personal/carer's leave during a period, the employee must be paid a rate for each hour (pro-rated for part hours) of paid personal/carer's leave taken that is no less than the rate that, immediately before the period begins, is the employee's basic periodic rate of pay (expressed as an hourly rate)." (emphasis added)
The Explanatory Memorandum to the Fair Work Bill shows the continuity between the Workplace Relations Act and the Fair Work Act, consistently with a comparison of the two sets of provisions. Under the Workplace Relations Act, each year an employee was entitled to paid personal/carer's leave of 1/26 of the number of nominal hours worked over a year, which amounted to "10 days" or "two weeks" of paid personal/carer's leave. Under the Fair Work Act, each year an employee is similarly entitled to paid personal/carer's leave equivalent to an employee's ordinary hours of work in "10 days" or "two weeks", being 1/26 of the employee's nominal hours worked over a year. Further, the Workplace Relations Act used "10 days" and "two weeks" as a shorthand for the amount of leave an employee accrues over a year, by reference to the nominal hours worked in a period, and that concept is retained in the Fair Work Act.
The Union parties submitted that there was one anomalous consequence of the "notional day" construction, namely that an employee who takes paid personal/carer's leave on a particular day may nonetheless be required to work overtime on that day. The anomaly does not arise. Subdivision A of Div 7 of Pt 2‑2 is concerned with protecting employees against loss of pay for ordinary hours of work. Section 99, for example, makes clear that pay for ordinary hours of work is protected. On any view, absence for rostered overtime is unpaid. While Subdiv A of Div 7 of Pt 2‑2 does not specifically refer to absence from work during overtime hours, an employee taking leave under that Subdivision must give notice of taking leave and the period, or expected period, of leave. It cannot be lawful and reasonable for an employer to require an employee to attend work for rostered overtime during a period where an employee has given notice of leave for that period, whether under the Act or, here, under cl 24.3 of the EBA, where employees absent from work because of illness or other unplanned reason "are required to notify [Mondelez] of their absence within 24 hours of their shift commencing, and if reasonably practicable, prior to their shift commencement time" by specific times.
Rejection of the "working day" construction
The "working day" construction adopted by the majority in the Full Court (and urged by the Union parties in this Court) is not consistent with the purpose of s 96 or the stated objectives of the Fair Work Act of fairness, flexibility, certainty and stability. The "working day" construction would lead to inequalities between employees with different work patterns, and so would be unfair. An employee whose hours are spread over fewer days with longer shifts would be entitled to more paid personal/carer's leave than an employee working the same number of hours per week spread over more days. Thus, on the construction adopted by the majority in the Full Court, an employee working 36 ordinary hours in a week in three shifts of 12 hours (as Ms Triffitt and Mr McCormack do) would be entitled to ten 12-hour days of paid personal/carer's leave per annum, or 120 hours, whereas an employee working 36 ordinary hours in a week in five days of 7.2 hours would be entitled to ten 7.2-hour days of paid personal/carer's leave per annum, or 72 hours. And, as Mondelez submitted, it may be expected that the employee working 12-hour shifts three times a week takes fewer days of paid personal/carer's leave given they work on fewer days than the employee working 7.2 hours, five days a week, and is therefore less likely to need to take paid personal/carer's leave on a working day.
Similarly, on the "working day" construction, part‑time employees would be entitled to the same amount of leave as, or more leave than, full-time employees. For example, a part-time employee working one day per week for 7.6 hours would be entitled to ten days of paid personal/carer's leave per annum (the same as an employee working 7.6 hours five days a week) and would accrue the leave at five times the rate of a full-time employee. And a part-time employee who works 12 ordinary hours per week as a single shift would accrue 120 hours of leave (ten absences of 12 hours) - almost double the 72 hours of leave a full‑time employee working 36 ordinary hours per week over five 7.2‑hour days would accrue in a year. Additionally, a person who was employed one day per week by a number of employers would be entitled to ten days of paid personal/carer's leave from each employer. Such results would be directly contrary to a stated object of the Fair Work Act of "providing workplace relations laws that are fair to working Australians, are flexible for businesses, [and] promote productivity and economic growth". Moreover, the "working day" construction would not encourage "flexible working arrangements", another object of the Fair Work Act. It would discourage an employer from employing anyone other than one person working a five-day working week, rather than employing a number of people over the course of that week, thereby avoiding employing a number of employees each being entitled to ten days of paid personal/carer's leave per annum. And, of course, it would not be consistent with assisting employees to balance their work and family responsibilities if the only working arrangement on offer was a five-day working week.
Further, the "working day" construction would create not only unfairness but also uncertainty. For example, if an employee takes a part day of paid personal/carer's leave, then on the "working day" construction, the Union parties submitted that an employee could take two hours' leave which would be measured as a fraction of a day, not necessarily in hours, though it could be measured in hours. The unfairness and uncertainty created would be that employees who take the same number of hours of paid personal/carer's leave, but who are working shifts of different hours, will have different portions of the day deducted from their accrued leave.
For all those reasons, the submission of the Union parties that the Fair Work Act effected a change to ensure that each employee could have ten absences from work per year from each employer, regardless of the hours worked, is rejected.
Conclusion
The appeals should be allowed. Order 1 made by the Full Court of the Federal Court of Australia should be set aside and in its place it be declared that: "The expression '10 days' in s 96(1) of the Fair Work Act 2009 (Cth) means an amount of paid personal/carer's leave accruing for every year of service equivalent to an employee's ordinary hours of work in a week over a two-week (fortnightly) period, or 1/26 of the employee's ordinary hours of work in a year. A 'day' for the purposes of s 96(1) refers to a 'notional day', consisting of one‑tenth of the equivalent of an employee's ordinary hours of work in a two-week (fortnightly) period." There will be no order as to costs.