Employer allowed to deduct from employee’s annual leave for time taken off work on public holidays

Construction, Forestry, Mining and Energy Union v Glendell Mining Pty Limited [2017] FCAFC 35 

A recent case in the Federal Court has found an employer may deduct annual leave from an employee’s accrued annual leave balance where the employee takes leave on a public holiday and they are covered by an Enterprise Agreement affording them more than four weeks paid annual leave.

In a recent case, Construction, Forestry, Mining and Energy Union v Glendell Mining Pty Ltd [2017] FCAFC 35, the Federal Court of Australia dismissed an appeal and upheld the decision of the judge at first instance that an employer could deduct the annual and personal leave of an employee on public holidays if they have been granted entitlements greater than those provided under the National Employment Standards.

Mr Noyes, an employee of Glendell Mining, took paid annual leave several times between 26 January 2010 and 27 January 2014. On seven occasions, a public holiday fell on a day Mr Noyes had taken annual leave or personal leave. On those seven occasions, Glendell Mining deducted a day of accrued paid leave.

The Construction, Forestry, Mining and Energy Union (CFMEU) argued that deducting accrued leave for days Mr Noyes was absent on public holidays was a contravention of sections 44, 50, 89 and 98 of the Fair Work Act 2009 (Cth).

Glendell Mining claimed it had not breached the Fair Work Act 2009 (Cth) because Mr Noyes was covered by an Enterprise Agreement which provided him greater leave entitlements of six weeks paid annual leave rather than the four weeks required under National Employment Standards. 

Glendell Mining argued section 89 and 98 did not apply when employees had access to more than four weeks of annual leave. It claimed that because Mr Noyes was provided with two additional weeks of paid annual leave, it could deduct leave from Mr Noyes’ accrued annual leave so long as it ensured he had the minimum leave required under the National Employment Standards.

Decision

The majority of the Federal Court found section 89 of the Fair Work Act 2009 (Cth), when viewed with regard to the whole Act, was not concerned with all entitlements to paid annual leave but rather only to those under the National Employment Standards.

The majority therefore rejected the contention made by the CFMEU and found in favour of Glendell Mining. However, the Court did note that ‘unless employers take care to specify in respect of any leave taken by an employee whether it is part of the four week [National Employment Standards] minimum or part of the additional leave to which the employee is entitled under a modern award or enterprise agreement’, difficulties of a similar kind to those in this case are likely to arise.

Justice Siopis, in dissent, did not believe Parliament intended the Act to be interpreted in the way put forth by Glendell Mining. His Honour did not believe Parliament ‘intend[ed] to introduce this level of complexity into the basic employment practice of applying for, and taking, paid annual leave’. The argument put forth by Glendell Mining required employees to advise their employers whether they were taking paid annual leave that fell within the ‘[National Employment Standards] protected’ tranche of leave or the ‘non-[National Employment Standards] protected’ tranche of leave.

The appeal by the CFMEU was dismissed.

Key Issues for Employers

If an employee is covered by an Enterprise Agreement that affords them entitlements more generous than those of the National Employment Standards, then employers may deduct annual and personal leave if the employee takes leave on public holidays. However, it is important that employers keep precise records and specify whether an employee is taking leave under the National Employment Standards or additional leave governed by an Enterprise Agreement or Modern Award.

 

Read the full decision here

* PCC Lawyers are a team of employment practitioners based in Sydney, with many years of combined knowledge and experience in workplace law, industrial relations, workplace investigations and training.  They provide a high standard of excellence and an exceptional level of personal service to a variety of clients in the Sydney metropolitan area, Central Coast, regional NSW and interstate. 

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