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Long Service Leave Guide

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Long Service Leave Guide Guide to Long Service Leave AS AT SEPTEMBER 2019 How to use this guide Long service leave legislation varies from State to State, and as such employers should take care to apply the law as in force in the relevant jurisdiction. The information contained in this document is a guide only and is not a substitute for independent professional advice. You should obtain any appropriate professional advice relevant to your particular circumstances. The information contained in this guide is accurate at the time of publication. Industrial relations legislation changes regularly, however, and you should ensure that you maintain your copy of this guide in an up to date form. For more information Phone: 1800 RETAIL (738 245) Table of Contents Queensland ...................................................................................................................... 3 New South Wales ............................................................................................................. 9 Victoria .......................................................................................................................... 13 South Australia ............................................................................................................. 19 Western Australia ......................................................................................................... 23 Tasmania ....................................................................................................................... 27 Northern Territory ......................................................................................................... 32 Australian Capital Territory ........................................................................................... 38 2 Queensland This fact sheet provides an overview of long service leave in Queensland, which is governed by the Industrial Relations Act 2016 (Qld). Long service leave entitlements in Queensland are overseen by the Queensland Industrial Relations Commission (QIRC). Who is entitled to long service leave? Full time, part time and casual employees are entitled to long service leave. What is the long service leave entitlement? It is important to understand that under Queensland law, the amount of long service leave that a person can take does not accrue in the same way as annual leave and personal leave until they pass 15 years’ continuous service. Instead, employees become entitled to take fixed amounts of long service leave once they hit certain milestones, and the amount of leave that they can take does not increase further until they hit the next milestone. Before reaching 15 years’ continuous service, the employee’s pro-rated or ‘accrued’ long service leave is only relevant upon termination of employment; see below for more information. Long service leave after 10 years’ continuous service Employees that commenced employment on or after 3 June 2001 are entitled to 8.6667 weeks long service leave after completing 10 years’ continuous service. Long service leave at 15 years’ continuous service Employees that commenced employment on or after 3 June 2001 are entitled to an additional 4.334 weeks at 15 years’ continuous service, for a total entitlement of 13 weeks (less any long service leave already taken). Long service leave after 15 years’ continuous service In addition to the above amounts of long service leave, employees that commenced employment on or after 3 June 2001 are entitled to accrue long service leave at the rate of 0.86667 weeks per year after completing 15 years’ continuous service. Employees who commenced employment before 3 June 2001 As a result of amendments to the legislation, transitional or ‘phasing-in’ provisions may apply with respect to service completed prior to 3 June 2001. Certain repealed legislation affects what periods are counted as service for full-time and part-time employees who commenced service before 23 June 1990, and to casual employees who commenced service before 30 March 1994. Please call the NRA on 1800 738 245 for more information. 3 Calculating the entitlement The legislation expresses the entitlement to long service leave in ‘weeks’; it therefore becomes necessary to determine what exactly constitutes a ‘week’ of long service leave. Employees who have always been full-time For employees who are, and have always been, full-time employees, the entitlement is simply 38 hours per week (note that, as with annual leave, overtime is not included when calculating how many hours constitute a working week). Employees who have, at any point, been part-time or casual Employees sometimes move between casual, part-time and full-time roles. The following formula is used to calculate the number of hours of long service leave to which an employee who is, or who has been, a part-time or casual employee is entitled: Total ordinary hours worked x 8.667 52 10 Example An employee who worked 15,600 ordinary hours during their period of service and was paid an hourly rate of $15 at the time of taking the leave, would be entitled to be paid: (15600 x 8.6667) = 300 x 0.86667 = 260 hours 52 10 The dollar entitlement of the paid leave would be 260 hours x $15.00 = $3,900 (gross). Where an employee has moved between casual, part-time and full-time roles, the ‘actual hours’ in the above formula will be the total ordinary hours worked by the employee across their entire period of service in all roles. If the employer and casual or part-time employee agree, the entitlement can be taken in the form of a full-time equivalent. Using the example above, where an award provides for a 38-hour week, 260 hours paid leave can be taken as 6.842 weeks leave. What constitutes continuous service? The following absences do not break continuous service and are counted towards the employee’s total length of service: an employee is absent on paid leave (including worker’s compensation) approved by the employer; a current employee commences an apprenticeship or traineeship with their employer; 4 an employee’s services are temporarily lent or hired out to another employer; an employee’s employment is terminated (or stood down) to avoid an obligation under workplace laws; an employee works with a company and then transfers to work for one of the company’s subsidiaries; or an employee works for an employer who becomes a partner in a business or withdraws from a business partnership. The following absences do not break continuity of service, but the absences are not counted towards the employee’s total length of service: an absence on approved unpaid leave, including absences due to illness or injury; an employee’s employment is terminated due to illness or injury and the employee is re-employed by the employer, provided the employee has not been employed by any other employer during the intervening period; an employee is dismissed or resigns and is re-employed within 3 months by the same employer; an employee’s employment is interrupted or terminated as a direct or indirect result of an industrial dispute and is re-employed; or the employee’s employment is interrupted or terminated by the employer because of slackness of trade or business and the employer re-employs the employee. Where an employer continues to employ an apprentice or trainee after, or re- employs them within 3 months of, completing their apprenticeship or traineeship, continuity of service will not be broken. An employee’s service in the Reserve Forces is taken to be continuous service with the employer who employed the employee immediately before the employee started service with the Reserve Forces. How is long service leave paid? The employer must pay the employee for long service leave at the ordinary rate being paid to the employee immediately before the leave is taken. The ordinary rate is the amount payable to the employee under their modern award, enterprise agreement, or other industrial instrument for ordinary hours (excluding overtime and penalty payments). However, if the employee is paid above this rate of pay (for example, a salary intended to include all loadings and penalties), the employer must pay the employee at the higher rate instead. An employer cannot reduce an employee’s rate of pay in order to reduce their payment obligations, and the QIRC can order an employer to make good any difference. 5 If, during the employee's leave: (a) the ordinary rate is increased (for example, on 1 July due to the Annual Wage Review), the employer must pay the employee at the increased rate for the part of the leave period that the increased rate applies to; or (b) the ordinary rate is reduced , the employer may pay the employee at the reduced rate for the part of the leave period that the reduced rate applies to (in practice this will seldom happen). Payments for commission If an employee is typically paid commission whilst they are at work, they are entitled to be paid an amount of commission during a period of long service leave unless the relevant industrial instrument, or the contract between the employer and employee, otherwise provides. The amount of commission payable is the default average commission. Default average commission means the total commissions payable to the employee in the year before the leave is taken; divided by 52.179; multiplied by the number of weeks leave for which payment is being made. When is long service leave paid? The legislation does not specify when an employee must be paid for long service leave, and an employee and employer may agree on the times when, and the way in
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