The National Employment Standards (NES) provides, as do most Modern Awards, that a “shiftworker” is entitled to an additional week of paid annual leave each year.

Under the Fair Work Act 2009 (Cth) (the Act), an employee is entitled to five weeks of paid annual leave each year if:

  • a modern award or enterprise agreement, which describes the employee as a “shiftworker” for the purposes of the NES, applies; or
  • the employee is not covered by an award or enterprise agreement, and:
    • is employed in an organisation in which shifts are continuously rostered 24 hours a day for seven days a week;
    • is regularly rostered to work those shifts; and
    • regularly works on Sundays and public holidays.

The Decision: O’Neill v Roy Hill

In the recent matter of O’Neill v Roy Hill Holdings Pty Ltd, the FWC considered and sought to clarify what an employee, that is not covered by an award or enterprise agreement, must do in order to “regularly” work on Sundays and public holidays and therefore trigger an entitlement to a fifth week of paid annual leave.

It was determined by the FWC that an employee must work a minimum of 34 Sundays and six public holidays in a given year to have the said entitlement to an extra paid week of annual leave.

Implications

The decision in O’Neill v Roy Hill is significant for employers who operate in an organisation where shifts are continuously rostered “24/7”. That is because the decision gives instruction (and a degree of certainty in the context of employees not covered by an award or enterprise agreement) for employers in terms of how they may structure their rosters to minimise costs and boost productivity through avoiding their obligation to grant an additional week of paid annual leave to certain employees – that is, by organising their roster system so that employees work on less than:

  • 34 Sundays in a year; and
  • six public holidays in a year.

Strictly, the decision in O’Neill v Roy Hill is confined in scope so as to apply only to employees not covered by an award or enterprise agreement. However, it is likely that the principle in this decision will extend more broadly than just to employees not covered by an award or enterprise agreement.

What next?

Employers should ensure they review their rostering systems so that they can easily identify which employees will be eligible for an additional week of annual leave.

(O’Neill v Roy Hill Holdings Pty Ltd [2015] FWC 2461 (10 April 2015))

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