Federal Court Ruling_Personal Leave

[MichelleS_ECO]

Hello

There was a Federal Court decision a few days ago that impacts on the Personal Leave Accumulation method.

It should be on days not hours BUT when paid it's paid on ORD hours for that particular employee.

The days are 10 for both full-time and part-time employees

As far as I can establish MYOB accumulates on hours per pay period without the possibility of accumulating days. OR am I missing something?

Is there a way to commence accumulation of the personal/cares (sick) leave by days in the software?

According the what I've read this is law, at least for the moment, from the 21st August 2019 onwards...it could be back dated to 2009 but lest hope not!

So MYOB can we accumulate in days rather than hours? If so how?

Thanks

Michelle 

[GDay53]

@MichelleS_ECO 

Welcome to the MYOB Community Forum, I hope you find plenty of useful information.

You could use the Running Down Method for the Personal leave istead of accrueing hours the employee starts with the 10 days then has time removed as they use it.

Check out the MYOB SUPPORT NOTE on "Running down method of sick leave".

[MichelleS_ECO]

Hi Graeme

Thank you for your response.

I have looked at the support notes regarding the running down method.

However I'd like to check with you regarding the payment of personal leave when the employee is entitied to their normal hours of work in payment for the days leave.

Meaning they are allocated on a day basis but paid on an hours basis (as per the Fedreal Court ruling)

For example an employee who normally works a 10 hour day will be paid 10 hours for the sick leave day, an employee who works 4 hours per day will be paid 4 hours sick leave and both employees will have used a days leave.

Can you clarify how you see the running down method working for this sceniero?

Best regards

Michelle 

[Steven_M · Accepted solution]

Hi @MichelleS_ECO 

Typically, AccountRight will accrue in hours. However, it is just a unit so, in theory, you could just treat that value as days. 

The way I view that run down method working is that you give an employee 10 days at the start of the year/anniversary date. This could be treated as processing a pay for the employee with 10 against the entitlement category OR the hours equalivent of that. When an employee took leave you would enter a 1 against the linked category (which would need to be set to be a fixed rate of the employee's daily rate) OR the hours equalivent of that.

[MichelleS_ECO]

Hi Steven

Thank you. It makes sense

Michelle 

[Julie_A_C]

hi @Steven_M , @MichelleS_ECO , @GDay53 

I would be hoping that this ridiculous ruling gets appealed and then overturned.

I would not be using the running down method as mentioned.  You don't get 10 days when you start or even after the anniversary of your start date.  You accrue  it as you work it. 

If I had an employee start with me and then 2 weeks later they unfortunately get sick one day, I do not have to pay them for a whole day, they have not worked long enough to have earnt that much.  I may pay them if I think they are going to stay with me and will accrue that much, but I do not have to.

The running down method is putting all the accrual in there up front.

If you are going to change the accrual method it would be that sick/personal days are accrued in days, not as hours as it will say on the entitlement report.  Then accrue 0.1923 per pay period for a weekly employee.

When they use a day you would then record 1 and need to change the amount paid to what hours they usually work that day times their rate, or you would need to have Base Daily Monday, Base Daily Tuesday etc if they work different hours different days.

Nightmare plus and goes to show that the Federal Court judge who made the ruling knows nothing about economics and business!

[Theresa_D]

Hi Everyone, 

I just wanted to follow up with the most recent information we’ve been provided regarding this Federal Court ruling.  At this stage the decision has been appealed, is still within the court system, and no legislation has been changed yet.

Once this legal process is completed, and if the legislation is officially changed by the Australian Government, MYOB will update our products to be fully compliant.

Please refer to the following resources below for additional information:

FairWork Ombudsman: Recent Federal Court Decision-Accrual of Personal/carer’s leave

Full details the Federal Court of Australia’s decision here

Thank you for your time and consideration.

[CP_EB]

Is there any updates on what's happening with the appeal?

[Tracey_H]

Hi @CP_EB 

At this stage there hasn't been an update on the appeal. However, we are still working with fairwork and will post an update as soon as we know anything.

Please let me know if you need further help.

[CP_EB]

Hi @Tracey_H,

Can you tell me why it is that MYOB havent updated their software system to reflect the new day accrual decision?  I know the decision is being appealed however it is for the meantime (hopefully) how we legally have to calculate Personal Leave. So, at the moment MYOB is using a method of accrual and payment is not compliant with the Decision and therefore may lead to breaches of the Fair Work Act 2009. 

Thanks