Cadbury workers win sick pay case in landmark Federal Court ruling

Two Cadbury shift workers have won a Federal Court dispute over their sick leave entitlements in a landmark decision which lawyers say will have widespread ramifications in workplaces across the country.

The Tasmanian workers, employed in Mondelez Australia’s Cadbury chocolate factory, work 12-hour shifts but were paid personal leave at a rate of just 7.6 hours a day.

Under National Employment Standards, workers are entitled to 10 days of paid personal leave each year.

The workers and the Australian Manufacturing Workers Union (AMWU) argued the workers should not be penalised for taking sick leave and should be paid personal leave at 12 hours per day, in accordance with their usual workloads.

In a ruling that considered at length what the meaning of a “day” is under the Fair Work Act, the Federal Court ruled in their favour in a split decision on Wednesday.

The case is expected to have broader ramifications in workplaces across the country, particularly for industries which rely heavily on shift workers, such as construction and healthcare.

It could result in workplaces around the country having to review their leave arrangements, as the ruling clarifies the Court’s reading on shift worker leave entitlements.

Businesses are being advised to review their payroll systems if they employ shift workers to ensure they remain compliant with workplace laws.

AMWU Tasmania state secretary John Short said the decision was a win for workers.

“This was an appalling attempt by a very profitably multinational company to rob its workers of the leave they are entitled to,” he said in a statement.

“If you need to take a sick day, you should be paid for your normal hours of work, it’s as simple as that.”

The case

The AMWU had argued the Fair Work Act seeks to entitle employees to be absent from work without loss of pay on 10 calendar days per year when ill or caring for a relative. It said the entitlement to be paid for a “day” relates to hours which would have been worked otherwise.

Mondelez argued the Fair Work Act does not refer to a “calendar day” as the union did, and instead to an “industrial meaning” of a “notional day”. It argued “day” is used as a shorthand reference to refer to an employee’s average daily ordinary hours, based on an assumed five-day working week.

Mondelez submitted the union’s “calendar day” argument leads to unreasonable results which parliament could not have intended when drafting Australia’s workplace laws.

Such was the interest in the outcome of the case that Attorney-General and Industrial Relations Minister Christian Porter had intervened, wanting to keep a close eye on proceedings.

Porter argued the expression “10 days” in employment standards within the Fair Work Act could not simply mean “10 working days” because the actual number of “ordinary hours” workers undertake can vary from day to day for many employees.

The court took the view there was a “substantial overlap” between the minister’s submission and that of Mondelez, so much so it decided it was convenient to refer only to Mondelez’ arguments, except where it was necessary to refer specifically to the minister.

In its conclusion, two of the three Federal Court judges rejected Mondelez’ “notional day” submission.

“The purpose of paid personal/carer’s leave is as a form of income protection for employees during the periods of illness, injury or unexpected emergency,” they said in one of 12 separate conclusions.

SmartCompany contacted Mondelez Australia for comment but did not receive a response prior to publication.

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