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

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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.

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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

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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

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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;

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 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.

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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 which, the employee will be paid for long service leave. If the employer and employee cannot agree, the QIRC may determine the time the amount becomes payable.

It is common practice for long service leave to be paid in the course of the usual pay cycle, although per the above other payment arrangements can be agreed to.

How is long service leave taken?

The time and manner of taking long service leave should be agreed between the employer and employee.

Where agreement cannot be reached, the employer can, with at least 3 months’ notice, require an employee to take at least 4 weeks long service leave.

There is no requirement for an employee to take long service leave within a certain period of becoming entitled to the leave.

How do public holidays affect a period of long service leave?

Long service leave is exclusive of public holidays. Therefore, any public holidays falling within a period of long service leave must be added to the leave.

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Can long service leave be cashed out?

Long service leave can only be cashed out if:

 the relevant industrial instrument allows for long service leave to be cashed out; and

 the employer and the employee agree to the cashing out in the manner prescribed by the industrial instrument.

If the relevant industrial instrument does not allow for the cashing out of long service leave, long service leave may only be cashed out if ordered by the QIRC following an application from the employee. The QIRC may only make such an order if they are satisfied it is appropriate on the grounds of compassion or financial hardship.

Payment on termination

Employees are entitled to receive proportionate payment of long service leave on termination of employment after completing 10 years’ continuous service (pro rata long service leave).

Employees who have completed 7 but less than 10 years’ continuous service are entitled to pro rata long service leave, if:

 the employee’s services are terminated by their death; or

 the employee terminates their service because of their illness or incapacity or because of a domestic or other pressing necessity; or

 the employer dismisses the employee for a reason other than the employee’s conduct, capacity or performance (e.g. redundancy); or

 the employer unfairly dismisses the employee; or

 the termination is because of the effluxion of time and:

o the employee had a reasonable expectation that the employment would continue until the employee had completed at least 10 years continuous service; and

o the employee was prepared to continue the employment.

What are the record keeping requirements?

An employer is required to keep a record of the type of work (full time, part time or casual) and the total number of ordinary hours worked by each part time or casual employee during the period 1 July to 30 June each financial year.

Time and wages records must be kept for a period of at least 6 years after the date on which the relevant work was performed.

In practical terms, in order to properly calculate an employee’s long service leave entitlement, these records should be kept for the whole duration of the employee’s employment, plus a further 6 years after the employee’s employment ends.

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Time and wages records must be kept at, or be accessible from, a workplace of the employer in Queensland. Workplace inspectors are empowered to enter premises to view and make copies of these records. It is an offence to make any false or misleading statements or omissions in relation to long service leave records. It is also an offence to obstruct an inspector or fail to comply with a lawful direction given by an inspector.

What happens to long service leave upon a transfer of business?

Where a business is sold, transferred or assigned and an employee remains with the business, the new employer becomes responsible for the employee’s long service leave entitlement. An employee's service with an old employer will be taken to be a period of service with a new employer when the employee is transferred to the new employer.

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New South Wales

This fact sheet provides an overview of the long service leave entitlements in New South Wales, which are governed by the Long Service Leave Act 1955 (NSW). Long service leave entitlements in New South Wales are enforced by inspectors appointed under the Industrial Relations Act 1996 (NSW) through the Local Court or the Supreme Court. Who is entitled to long service leave? Full time, part time and casual workers who have completed at least ten years continuous service are entitled to long service leave. What is the long service leave entitlement? It is important to understand that under New South Wales 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.

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. Between these milestones, the employee’s pro rata or ‘accrued’ long service leave is relevant only upon termination of employment; see below for more information. Long service leave after 10 years’ continuous service A worker is entitled to 2 months (8.6667 weeks) long service leave after 10 years’ continuous service. Long service leave after an additional 5 years’ continuous service After completing 10 years’ continuous service, a worker is entitled to 1 month (4.33 weeks) long service leave for every 5 years’ continuous service thereafter. The Act defines a “month” as 4 and one-third weeks or 4.3333333 weeks. What constitutes continuous service? The following interruptions do not break continuity of service and are counted towards the total length of service:

 an absence in accordance with the terms of the worker’s employment; or

 an absence caused as a result of illness or injury. In other circumstances, continuity of service is not broken but the absence does not count towards the total length of service. These circumstances are where the absence:

 is caused by the employer with the intention of avoiding any obligation imposed on the employer by the Act or by any obligation in relation to sick leave imposed on the employer by a State industrial instrument;

 arises directly or indirectly from an industrial dispute;

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 is caused by reason of slackness of trade;

 arises from the absence of the worker for any cause by leave of the employer; or

 is caused by the employer for any reason other than those referred to above where the worker returns to the service of, or is re-employed by the employer within 2 months of the date on which the service was interrupted. How is long service leave paid? Long service leave is paid at the worker’s ‘ordinary pay’. Fixed rate of pay (i.e. salary or hourly wage) Where a worker is paid a fixed ordinary time rate of pay, ‘ordinary pay’ means the greater of either:

 the ordinary remuneration at the relevant date; or

 the average weekly amount of ordinary remuneration earned during the previous 5 years. When calculating the above, ordinary remuneration means what the employee is paid for their weekly number of hours, but not including overtime, penalty rates or other loadings. For full-time employees this will be 38 hours per week; for part-time employees this will be the number of hours per week specified in their contract of employment. Where no normal weekly number of hours of work is fixed (i.e. casual employment), the normal number of hours of work is deemed to be the average weekly number of hours worked during the previous period of 12 months or 5 years. No fixed rate of pay (i.e. piecework) Where the worker is not paid a fixed ordinary time rate of pay, the amount of the average weekly wage which was earned by the worker (excluding shift work, overtime or other penalty rates) is averaged over 12 months or 5 years (whichever is the greater). Bonuses and commissions Bonuses and commissions received by the worker are also averaged over the previous 12 months (or 5 years if the 5-year average pay rate is used) and added to the weekly rate used to calculate the leave payment. However, bonuses paid to workers who are paid in excess of $145,400 annually are not included. When is long service leave paid? When an employee takes a period of long service leave, they are to be paid for this leave in one of the following ways:

 in full at the start of the leave;

 in accordance with their usual pay cycle throughout the leave; or

 in any other way agreed between the employer and the employee.

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How is long service leave taken? An employer is required to grant long service leave as soon as practicable after it has become due, taking into account the needs of the business. The employer must give the worker one month’s notice of the commencement date of the long service leave. By agreement between the employer and the employee, long service leave may be postponed to a mutually convenient date. Long service leave can be taken in one continuous period or, if the worker and the employer agree, in the following separate periods:

 where the amount of the leave is 2 months, in two separate periods;

 where the amount of leave exceeds 2 months and does not exceed nineteen and one-half weeks, in two or three separate periods; or

 where the amount of the leave exceeds nineteen and one-half weeks, in two, three or four separate periods. How do public holidays affect a period of long service leave?

Long service leave is exclusive of public holidays. As such, where a worker would otherwise be entitled to payment of that public holiday, the period of long service leave is increased by one day in respect of that public holiday. Can long service leave be cashed out? No. The long service leave entitlement must be taken as leave (other than upon termination of employment). Can long service leave be taken in advance? Yes. By agreement, a worker may take long service leave before it has accrued. Long service leave taken in advance must not be less than 1 month. Payment on termination A worker who has completed five years’ (but less than 10 years’) continuous service is entitled to pro rata long service leave if the worker:

 resigns as a result of illness, incapacity, domestic or other pressing necessity;

 is terminated by the employer for any reason other than serious and wilful misconduct; or

 dies. If the employee is terminated or ceases work for any reason between 10 and 15 years’ service, a pro rata or proportionate amount on the basis of 3 months for 15 years’ service is paid. If the employee is terminated or ceases to work for any reason after completing 15 years’ service, a pro rata or proportionate amount on the basis of 2 months for each ten years’ service is paid.

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What are the record keeping requirements? Employers must keep long service leave records in a form approved by the Minister for a period of at least 6 years after the last entry within the relevant record. These records must include:

 the name and address of the employee;

 the date on which the employee commenced employment;

 the date on which the employee’s employment was terminated (if applicable);

 the dates on which the employee became entitled to each period of long service leave;

 the dates of which the employee took any long service leave; and

 the dates of payment and the amount of each payment. Industrial inspectors are empowered to enter the premises of an employer and request the production of long service leave records. It is an offence to make any false or misleading statements or omissions in relation to long service leave records. It is also an offence to obstruct an inspector or fail to comply with a lawful direction given by an inspector. What happens to long service leave when a business is sold or taken over? Where an employee is transferred between companies in the same group or continues to work for the new owners following a transfer of business, his/her continuity of service is not broken and the period of service is deemed to continue. The requirement of the employer to pay long service leave that an employee has become entitled to passes to the new business owner. Payment/granting of long service leave by the new business owner to the employee will be calculated on the basis of total service with both employers. The sum to be paid or taken will not include an amount already paid to the employee by the prior employer (i.e. no ‘double-dipping’ by the employee).

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Victoria

This fact sheet provides information about long service leave entitlements in Victoria, which is governed by the Long Service Leave Act 2018 (Vic). Who is entitled to long service leave? Full-time, part-time, and certain casual and seasonal employees are entitled to long service leave after completing seven years of continuous service with one employer. What is the long service leave entitlement? Long service leave after seven years’ continuous employment Employees can start to take long service leave once they reach seven years’ continuous employment with one employer.

Employees are entitled to an amount of long service leave equal to 1/60 of their period of continuous employment. Therefore, an employee with seven years’ continuous employment (365 weeks) would be entitled to 6.083 weeks’ long service leave. After seven years’ of employment, long service leave will continue to accrue at a rate of one week of long service leave for every 60 weeks of continuous service (approximately 0.866 weeks per year). Changes made under the Long Service Leave Act 2018 (Vic) Please note that due to changes made by the Long Service Leave Act 2018 (Vic), there is no longer any change an employee’s entitlement to long service leave at 10 years’ service and 15 years’ service. Phasing-in of entitlements – employees employed before 1 January 2006 Employees whose employment commenced prior to 1 January 2006 may be subject to phasing-in provisions due to legislative changes around that time. Please call the NRA on 1800 738 245 for more information. What constitutes continuous employment? Because the Long Service Leave Act 2018 (Vic) came into effect on 1 November 2018, different rules apply to the calculation of continuous service depending on whether an event occurred before or after 1 November 2018. Before 1 November 2018 The following periods of absence from work do not break continuous employment and are counted as part of the period of employment if they occurred before 1 November 2018:

 annual leave or long service leave;

 any other form of paid or unpaid leave approved by the employer, including carers’ leave but not including adoption, maternity or paternity leave;

 an absence from work of up to 48 weeks because of illness or injury.

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The following periods of absence from work do not break continuous employment, however are not counted as part of the period of employment if they occurred before 1 November 2018:

 unpaid adoption, maternity or paternity leave;

 if the employee is dismissed and then re-hired within three months of the dismissal – the intervening period;

 an absence from work because of illness or injury exceeding 48 weeks. On or after 1 November 2018 The following periods of absence from work do not break continuous employment and are counted as part of employment if they occurred on or after 1 November 2018:

 paid leave;

 up to 52 weeks unpaid leave, or longer if provided for under the employment agreement or otherwise agreed to count as service;

 leave on account of illness or injury. The following periods of absence from work do not break continuous employment, however are not counted as part of the period of employment if they occurred on or after 1 November 2018:

 a period of unpaid leave exceeding 52 weeks (unless otherwise agreed to count as part of the period of employment);

 if the employee is dismissed and then re-hired within three months of the dismissal – the intervening period; Where absences cross the 1 November 2018 divide Where an employee is absent from work on either side of 1 November 2018, and the absence is a type that does not count as employment before 1 November 2018 but does count as employment after 1 November 2018, then only the part of the absence occurring on or after 1 November 2018 counts as employment for the purposes of calculating the employee’s long service leave entitlement, For example, if an employee was on unpaid parental leave from 1 January 2018 to 31 December 2018:

 the period from 1 January 2018 to 31 October 2018 would not count as employment for the purposes of calculating the employee’s long service leave entitlement; and

 the period from 1 November 2018 to 31 December 2018 would count as employment for the purposes of calculating the employee’s long service leave. Continuous employment is not broken by the following interruptions, and such absences are counted as part of the period of employment:

 paid leave (such as annual leave, personal leave or long service leave);

 a period of unpaid leave up to 52 weeks in length;

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 any interruption or termination of employment if the intention was to avoid long service leave or annual leave obligations;

 transfer of business. The following interruptions do not break continuous employment but are not counted as part of the period of employment:

 a period of unpaid leave exceeding 52 weeks ( the first 52 weeks of such leave is counted);

 a period of stand-down where the employer has no right under the employment agreement between the employer and the employee to stand down the employee, and the employer: o stands down the employee because the employee cannot be usefully employed due to industrial action; or o stands down the employee because the employee cannot be usefully employed due to a breakdown of machinery or equipment for which the employer cannot reasonably be held responsible; or o stands down the employee because of a stoppage of work for which the employer cannot reasonably be held responsible; or

 if the employee is dismissed and then re-hired – the period between dismissal and re-hiring, provided this period is less than 12 weeks. Casual and seasonal employees The employment of casual or seasonal employees is taken to be continuous if:

 there is no more than an absence of 3 months between each instance of employment in the period; or

 there is more than an absence of 3 months, but the length of absence is due to the terms of the engagement or unpaid parental leave; or

 the absence between employment is due to the seasonal nature of the employment. Service as an apprentice If an apprentice is employed by the same employer within 12 months after completion of an apprenticeship, then the time of their apprenticeship is counted for the period of employment with that employer. How is long service leave paid? Long service leave is paid at the employee’s ordinary pay as at the time the leave is taken for working their normal weekly hours at their ordinary time rate of pay. Ordinary pay includes the cash value of any board or lodging that the employee receives from the employer. However, ordinary pay does not include allowances, penalty rates or overtime. In most cases, the ‘ordinary time rate of pay’ will be set by either the relevant modern award or the contract of employment. Where an employee works a set number of hours each week (i.e. a full-time or part- time employee) and those hours have not changed in the 104 weeks (two years) prior

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to the taking or payment of long service leave, then the employee is entitled to be paid for long service leave as if they had worked those hours during the period of leave. Where employee’s weekly hours have changed If an employee’s working hours have changed during the 104 weeks (2 years) immediately before the employee takes long service leave, or the employee’s hours of work change from week to week (as is often the case with casual employees), the employee’s normal weekly number of hours is taken to be the greater of the following:

 the average weekly number of hours worked by the employee in the 12 months immediately before they take long service leave;

 the average weekly number of hours worked by the employee in the 5 years immediately before they take long service leave; or

 the last period of continuous employment. Where there is no fixed rate of pay (i.e. piece rates) If no ordinary time rate of pay is fixed (for example, the employee is paid piece rates or commission-only), the employee’s ordinary time rate of pay is taken to be the greater of the following:

 the average weekly rate earned by the employee in the 12 months immediately before they take long service leave; or

 the average weekly rate earned by the employee in the 5 years immediately before they take long service leave; or

 the average weekly rate earned by the employee over the entire period of continuous employment. If the ordinary pay of an employee increases while the employee is taking long service leave, they are entitled to be paid the increased rate from the time of the increase. When is long service leave paid? Long service leave must be paid in one of the following ways:

 in full when the employee starts the leave;

 in accordance with the employee’s normal pay cycle; or

 in any other way agreed between the employer and employee. How is long service leave taken? Long service leave is to be taken at a time agreed between the employer and the employee. In the absence of an agreement, the employer may direct the employee to take long service leave at a particular time by giving the employee at least 12 weeks’ written notice. An employee is entitled to request to take long service leave for a period of not less than 1 day. An employer must grant an employee’s request to take long service leave

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as soon as practicable after having received the request unless there are reasonable business grounds to refuse. It is an offence for an employee to work while they are taking long service leave. An employer must not knowingly employ another person while that other person is taken long service leave. Penalties apply. Can long service leave be taken in advance? Yes. The employee and employer may agree on the leave being taken before an entitlement is actually due. If the employment is then terminated before the long service leave is accrued, the employer may recover the amount of any advance payment, less any amount of long service leave subsequently accrued. Can long service leave be deferred? Yes. An employee can request deferral of their long service leave. The rate of pay when the employee then takes the long service leave will be the rate agreed in writing between the employer and employee. The rate cannot be less than the employee’s ordinary rate of pay at the time the leave was due. Can long service leave be taken at half pay? An employer and employee may agree to allow the employee to take a period of leave at half pay. For example, an employee with 13 weeks accrued leave could take 26 weeks at half pay. However, taking half the leave at double pay is not permitted. How do public holidays affect a period of long service leave?

Long service leave does not include any public holiday or annual leave occurring during the period when the long service leave is taken. Can long service leave be cashed out? No. An employee cannot ‘cash out’ their long service leave. It is an offence under the Act to give or receive payment instead of the employee actually taking the leave (other than in circumstances of termination). Both the employer and the employee may receive a fine of 20 penalty units. The employer may also receive a criminal conviction. Payment on termination An employee who has completed at least 7 years’ continuous employment is entitled to receive pro rata long service leave upon termination of employment, regardless of the reason for the termination. Note that phasing-in arrangements do not apply on termination. Pro rata long service leave is calculated at the rate of one week for each 60 weeks of continuous employment. Where an employee has already taken long service leave, the employer must pay any remaining accrued leave at termination. Payment made on termination in lieu of long service leave is calculated by assuming the employee started to take their leave on the day the employment ended. On that day the employer must pay the employee the full amount of the employee's long service leave entitlement as at that day. Upon the death of an employee, the employee’s accrued but untaken long service leave must be paid to the employee’s personal representative.

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What records must be kept? An employer is required to keep the following records for each employee:

 the employee’s name;

 date when employment commenced and any previous periods of continuous service;

 details of wages, salary or commissions paid to the employee;

 the employee’s accrued long service leave;

 each period of long service leave taken by the employee;

 each occasion where the employee has been absent for two months or more from that employment; and

 where the employee ceased to be employed, the date that employment was terminated. The employer must keep these records for 7 years after an employee’s employment has ceased. What happens if there is a transfer of business? Where a business is sold, transferred or assigned and an employee remains with the business, the new employer becomes responsible for the employee’s long service leave entitlement. The period of employment with the old employer transfers to the new employer, who becomes liable for the long service leave accrued across the entire period of employment. In this case, the old employer should not pay out accrued long service leave to the employee. If an employee is dismissed by the old or new employer but is re-hired by the new employer within 3 months, employment will be considered continuous.

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South Australia

This fact sheet provides an overview of the long service leave entitlements in South Australia, which are governed by the Long Service Leave Act 1987 (SA).

Compliance with the Long Service Leave Act 1987 (SA) is enforced by inspectors appointed under the Fair Work Act 1994 (SA) through the South Australian Employment Tribunal.

Who is entitled to long service leave?

Full-time and part-time employees, and causal employees are entitled to long service leave after completing 10 years’ continuous service.

What is the long service leave entitlement?

Long service leave at 10 years’ continuous service

An employee is entitled to 13 weeks long service leave upon completing 10 years’ continuous service.

Long service leave after 10 years’ continuous service

After 10 years’ continuous service, long service leave accrues at the rate of 1.3 weeks per year of continuous service.

Different entitlements apply to employees that were engaged prior to 1972. Please contact the Employment Law Division for more information.

What constitutes continuous service?

The entitlement to long service leave is based on completed years of continuous service. The following periods do not break continuity of service and are counted as service:

 any paid leave (e.g. annual leave, long service leave);

 unpaid sick leave or workers’ compensation;

 a break in service brought about the employer in an attempt to avoid an obligation or liability relating to long service leave; or

 where an apprentice is re-employed by the same employer within 12 months of the completion of the apprenticeship, the period of apprenticeship with that employer will count as service. The following periods do not break continuity of service, but are not counted as service:

 parental leave;

 any other kind of unpaid leave;

 stand down due to slackness of trade where the employee is subsequently re-employed by the employer;

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 a break caused by an industrial dispute where the employee returns to work as part of a settlement or is re-employed when the dispute is settled;

 any other break in the employee’s service brought about by the employer where the worker returns to work or is re-employed by the employer within two months. How is long service leave paid?

Long service leave is paid at the ordinary weekly rate the worker is being paid immediately before going on leave or at the time of termination.

“Ordinary weekly rate” does not include overtime, shift premiums or penalty rates.

If the employee's rate of pay increases while they are on long service leave, the employee is entitled to have their payment adjusted.

If, during the whole or part of the three years immediately preceding the relevant date, the employee:

 was paid on an hourly basis at an hourly rate of pay; or

 worked varying ordinary hours; or

 worked on a part-time or casual basis; the employee’s ordinary weekly rate of pay will be determined by averaging the number of hours worked per week in that period of three years and multiplying that result by employee’s hourly rate of pay (exclusive of overtime, shift premiums and penalty rates).

This average is then used to calculate the weekly rate.

If the employee is paid on a system of payment by result (e.g. commission) their earnings over the last 12 months are averaged to calculate the ordinary weekly rate.

When is long service leave paid?

Payment for a period of long service leave must be made:

 in advance for the whole period of the leave; or

 on the normal pay day, in which case the employee may request a payment by cheque to be sent to a specified address; or

 by another method of payment that is agreed between the employer and the employee.

How can long service leave be taken?

Long service leave should be granted to an employee as soon as practicable after the employee becomes entitled to the leave, subject to the needs of the employer’s business.

An employer can direct a worker to take accrued long service leave, providing at least 60 days’ notice is given. Despite this, the employer and employee may agree on how and when the leave is to be taken.

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Long service leave should be taken in one continuous period, but if the employer and the employee agree, separate periods can be taken.

Where an employee has been granted long service leave, the employer must (before the leave is taken) give the employee a statement in the prescribed form setting out the number of days of leave to be taken and number of days of leave that will remain at the conclusion on that leave.

Can long service leave be taken in advance?

Yes. An employer and employee may agree to the taking of long service leave in an anticipation of the entitlement accruing to the employee.

If an employee takes long service leave in advance, and the service of the employee is terminated (for any reason) before the entitlement to that leave accrues, the employer may deduct from any remuneration payable to the employee the difference between the amount paid to the employee in respect of the long service leave taken and the amount of payment in lieu of long service leave to which the employee would have been entitled on the termination if the employee had not taken the leave in advance.

How do public holidays affect a period of long service leave?

Every day occurring after the commencement of a period of long service leave (including public holidays and days on which the worker would not normally have been required to work) will be counted as a day of that leave. This means that long service leave is not extended by any public holidays occurring during the period of leave.

Can long service leave be cashed out?

By agreement, an employee who has become entitled to long service leave (i.e. has completed 10 years’ service) may receive payment in lieu of the whole or part of that long service leave. Such an agreement must be recorded in writing and signed by the employer and the employee after the entitlement to the leave has accrued.

When long service leave is cashed out, the employer must give the employee a statement in the prescribed form setting out the period of leave in lieu of which the payment is made and the number of days (if any) that will remain due to the worker after the payment is made.

Payment on termination An employee who leaves, or whose service is terminated after 7 years’ continuous service (but less than 10 years), is entitled to 1.3 weeks for each completed year of service unless:

 the employee’s employment is terminated on the ground of serious and wilful misconduct; or

 the employment is unlawfully terminated by the employee.

It is important to remember that the legislation refers to the termination of service, rather than employment. This means that where employment is transferred from one

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employer to another, this does not necessarily amount to a termination of service giving rise to the right to payment for long service leave. Please contact NRA on 1800 738 245 for more information.

Can an employee engage in other employment during long service leave?

No.

It is an offence for an employee on long service leave to take up other employment during that leave.

It is also an offence to provide employment to a person who is on long service leave, if the employer knows that the person is on a period of long service leave.

What records must be kept?

An employer must keep a record of the employee’s:

 date of commencement of service;

 occupation or duties;

 rate of pay;

 number of hours worked per week;

 entitlement to long service leave;

 any long service leave taken;

 any payment made in lieu of long service leave;

 manner of termination and any payment of long service leave on termination (if applicable). Records must be kept throughout the employee’s service and for at least three years after termination.

What happens to long service leave entitlements when a business is sold or taken over?

If the business has been sold, and the employee has continued with the new employer, the employee's service will be considered continuous. The new employer will assume responsibility for the whole period of service. All records relating to transferring employees must be provided to the new employer.

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Western Australia

This fact sheet provides a general overview of the laws governing long service leave entitlements in Western Australia, which is governed by the Long Service Leave Act 1958 (WA). Compliance with the Long Service leave Act 1958 (WA) is enforced by industrial inspectors through the industrial magistrates’ courts. Who is entitled to long service leave? Full time, part time and casual employees are entitled to long service leave, based on the length of their continuous employment. What is the long service leave entitlement? It is important to understand that under Western Australian 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.

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.

Between these milestones, the employee’s pro rata or ‘accrued’ long service leave is relevant only upon termination of employment; see below for more information. Long service leave at 10 years’ continuous employment An employee who has completed 10 years’ continuous employment will be entitled to 8 2/3 weeks long service leave. Long service leave of each 5 years’ continuous employment after 10 years In respect of every 5 years’ continuous employment after completing 10 years’ continuous employment, an employee will be entitled to 4 1/3 weeks of long service leave. What constitutes continuous employment? The Act sets out specific circumstances in which an employee’s employment is deemed to be continuous, with the effect that their total service should be counted toward their long service leave entitlement. These circumstances include:

 absence due to sickness or injury, but only to the extent of 15 working days in any year;

 annual leave;

 long service leave;

 public holidays;

 termination due to an employer intending to avoid obligations under the Long Service Leave Act 1958 or any award or industrial agreement in respect of long service leave;

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 any period on defence force leave. There are also circumstances that will not break continuity of employment but the period of absence is not counted towards an employee’s length of service:

 any absence (other than an absence listed above) that is authorised by the employer (e.g. parental leave);

 any stand down in accordance with the provisions of an award, industrial agreement, order or determination;

 any absence arising directly or indirectly from an industrial dispute if the employee returns to work in accordance with the terms of settlement of the dispute;

 termination due to slackness of trade, provided the employee is re- employed not more than 6 months after the initial termination of employment;

 termination of employment by the employer on any ground other than slackness in trade, provided the employee is re-employed within a period not more than 2 months from the date of termination;

 any reasonable absence of the employee on legitimate union business in respect of which they have requested and been refused leave;

 any absence from employment by reason not otherwise specified in the legislation unless the employer, during the absence or within 14 days of the termination of the absence, gives written notice to the employee that the continuity of employment has been broken by that absence, in which case the absence will be deemed to have broken the continuity of employment. How is long service leave paid? The employer must pay the employee for long service leave at their ordinary rate of pay. However, if the employee is, immediately before taking the leave, being paid at a higher rate than the ordinary rate, the employer must pay the employee at the higher rate. Where an employee is paid based on results, their rate of pay will be an average of their weekly earnings over the 12 months prior to taking long service leave. Where the employee’s hours have varied over time (for example, as a casual employee, or because the employee moved from part-time to full-time), then the appropriate rate of pay will be based on an average of hours worked during the whole period of employment. When is long service leave paid? Payment is to be made at the usual time payment is made in the normal course of employment. The employee can, however, request in writing to be paid before the period of leave commences, in which case the employer is to do so. The employer and employee can agree to another method of payment.

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How is long service leave taken? Provided agreement is reached between the employer and the employee, long service leave is to be taken as soon as is reasonably possible after it becomes due and may be taken in one continuous period or in separate periods of not less than one week. An employee is free to take leave at any time which is convenient to them after it has been more than 12 months since they became entitled to the leave. An employer must not refuse to grant this long service leave, however, two weeks’ notice must be given by the employee. Can employees take long service leave before it has accrued? An employer may allow an employee to take long service leave before it has accrued. The employee will not be entitled to any additional leave until they have worked the required period of time to compensate for the long service leave that was taken before it had accrued. How do public holidays affect a period of long service leave? Long service leave is exclusive of public holidays. Therefore, each public holiday falling within a period of long service leave will extend the length of the leave by one day. Can employees cash out their long service leave? Employees can cash out their long service leave so long as the employee is given adequate benefit in lieu of the entitlement and the agreement is in writing. Payment on termination An employee who has completed at least 7 years’ continuous employment will be entitled to leave should their employment be terminated for reasons other than serious misconduct. This amount will be a proportional amount on the basis of 8 2/3 weeks for 10 years of continuous employment. Can an employee work for another employer during long service leave? No. An employee must not engage in paid employment that is in substitution for the employment from which they are on long service leave. Where this is found to be the case, the employee will forfeit their long service leave entitlement. Record keeping An employer must keep a record of the employee’s:

 name and, if under the age of 21, their date of birth;

 date of commencement of service;

 the gross and net amounts paid to the employee under their contract of employment, and any deductions and the reasons for them;

 all leave taken by the employee whether paid, partly paid or unpaid;

 details of any agreement with the employee to cash out their long service leave entitlements;

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 all details necessary to allow for the calculation of the employee’s long service leave entitlement; and

 occupation or duties;

 rate of pay;

 number of hours worked per week;

 entitlement to long service leave;

 any long service leave taken;

 any payment made in lieu of long service leave;

 manner of termination and any payment of long service leave on termination (if applicable). Because of the need to average an employee’s hours over their entire period of service, these records should be kept for as long as the employee is employed, plu a further seven years after the employee’s employment comes to an end. What happens to long service leave when purchasing a business? The Act provides that an employee’s service with an old employer will be taken to be a period of service with a new employer when the employee’s calling is transferred to the new employer. This means that if you purchase a business and take on the employees who have previously worked for the vendor, you could be taking on an obligation to pay out these entitlements at some future time

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Tasmania

This fact sheet provides an overview of the long service leave entitlements applicable in Tasmania, which are governed by the Long Service Leave Act 1976 (Tas). Compliance with the Long Service Leave Act 1976 (Tas) is enforced by inspectors appointed under the Industrial Relations Act 1984 (Tas) through the magistrates’ courts. Who is entitled to long service leave? A full time, part time or casual employee is entitled to long service leave based on their continuous service with an employer. When is an employee entitled to take long service leave?

From 1 July 2012, the long service leave entitlement is 82/3 weeks after completing ten years’ continuous employment. After each additional five years of continuous employment an employee is entitled to a further 41/3 weeks. The Act contains transitional arrangements as a result of the 1 July 2012 amendments as follows:

 Employees who have completed 12 or more years of continuous employment as at 1 July 2012 will immediately be entitled to take their long service entitlement, subject to the needs of the employer’s business.

 Employees who, as at 1 July 2012, have completed 9 or more years but less than 12 years of continuous employment will not be entitled to take long service leave until 1 July 2013, subject to the needs of the employer’s business.

 This does not prevent a worker with 10 or more years of continuous employment from receiving their long service leave entitlements in the event the employee leaves their employment or dies during the period 1 July 2012 to 1 July 2013. Casual and part time employees Casual and part time employees are entitled to long service leave if they have completed 10 years’ continuous employment. They are considered to be continuously employed if they have been regularly working for 32 hours or more in each consecutive period of four weeks. An employee engaged before 21 December 1979 is considered to be continuously employed if the employee was regularly employed throughout any period. An employee in this situation is not required to regularly work a minimum of 32 hours in each four-week period. What constitutes continuous employment? The following absences and interruptions do not break continuous employment and count as service:

 annual leave or long service leave;

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 public holidays;

 any absence due to illness or injury that has been certified as necessary by a medical practitioner (including workers’ compensation);

 any interruption or termination of employment by the employer, if done to avoid annual leave or long service leave obligations;

 any period of approved leave to attend meetings of either the Tasmanian State Training Authority or committees established under the Vocational and Education Training Act 1994;

 jury service or other prescribed attendance at court.

The following absences and interruptions do not break continuous employment but do not count as service:

 maternity leave;

 any interruption arising from an industrial dispute;

 termination for any reason, except for slackness of trade, but only if the employee is re-employed by the employer within three months of the date of termination;

 stand down or termination due to slackness of trade, provided that the employee returns to work or re-engaged within six months and within 14 days of an offer by the employer to return to work or be re-engaged;

 any other absence approved by the employer. Continuous employment is broken if employment is terminated (except as above) or an absence occurs that is not covered above. This means all previous employment up to the date on which the interruption began is disregarded. How is long service leave paid? An employee is to be ‘ordinary pay’ for a period of long service leave. Ordinary pay is the remuneration the employee would receive if the employee remained at work during that period and includes:

 shift penalties;

 part time and casual loadings;

 allowances;

 cash value of board and lodging (other than board and lodging provided by the employer for work in localities distant from the employee’s genuine place of residence). The following payments are excluded from ‘ordinary pay’ and are not payable during periods of long service leave:

 overtime payments;

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 special award rates (e.g. danger, hardship or inconvenience type allowances);

 bonus payments;

 living away from home allowance; and

 meal allowance. Ordinary pay for a casual employee is based on the average number of hours worked over the 12 months immediately prior to the commencement of the leave. Ordinary pay for commission based employees is based on the average weekly remuneration received over the three months immediately prior to the commencement of leave. When is long service leave paid? An employee taking long service leave is to be paid in one of the following ways:

 in full when the employee commences leave;

 on normal pay days throughout the period of leave;

 in any other way agreed upon between the employer and employee. How is long service leave taken? An employee may take long service leave once the entitlement to the leave has been established, subject to the needs of the employer’s business. Long service leave must be taken in one period unless the employer and employee have agreed that it will be taken in two periods. Can long service leave be taken in advance? Long service leave cannot be taken in advance. How do public holidays affect a period of long service leave? Long service leave is exclusive of public holidays. Therefore, each public holiday falling within a period of long service leave will extend the length of the leave by one day. Can long service leave be cashed out? By agreement, an employee who is entitled to take long service leave may ‘cash out’ their long service leave entitlement (in whole or part). Payment on termination An employee who has completed 7 years but less than 10 years of continuous employment is entitled to pro rata long service leave if the employee:

 is terminated by the employer for any reason other than serious and wilful misconduct;

 ceases their employment either through illness that was of such a nature to justify the termination of employment, or retirement or death; or

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 resigns due to incapacity or domestic or other pressing necessity that was of such a nature to justify the termination of employment. How is pro rata long service leave calculated? The pro rata entitlement is calculated by dividing the employee’s period of continuous employment in years by 10 years and multiplying the result by 82/3 weeks. For example, an employee with 9 years continuous employment resigns due to ill- health: 9 years x 8.667 weeks = 7.8 weeks 10 years

Pro rata payment upon death Where the employee is deceased and had more than 7 years but less than 10 years continuous service, the pro rata entitlement is an amount equal to 1/60 of the deceased employee’s ordinary pay for the period of continuous employment. If the deceased employee had more than 10 years’ continuous employment at the time of death, the pro rata entitlement is calculated by adding:

 the payment of any outstanding accrued entitlement; and

 an amount equal to 1/60 of the deceased employee’s ordinary pay for the period of continuous employment which occurred after the last accrual of an entitlement to long service leave. What records must be kept? The Long Service Leave Regulations 2017 (Tas) require the following records to be kept:

 employer’s name and address;

 employee’s name, address & position;

 date employment commenced;

 details of any additional period of employment to be served due to an absence or interruption that does not count towards continuous employment;

 end date of the qualifying period;

 details of leave taken (start & finish dates, number of dates taken, amount paid and method of payment);

 details of termination of employment (date, reason and rate of ordinary pay at the date of termination). The legislation stipulates no time limit on how long these records must be kept, and they must therefore be kept in perpetuity.

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What happens to long service leave entitlements when a business is sold or taken over? Associated entities When an employee transfers between ‘associated’ corporations, the employee’s employment counts towards the period of continuous employment. Transmission of business Where one employer takes over the business of another employer, the transmission of business does not affect an employee’s long service leave entitlement. This means all prior continuous employment must be recognised by the new employer. Re-engagement Where an employee is terminated by one employer and is re-engaged to work in the same place of business and in substantially the same kind of business with another employer and the re-engagement takes place within a period of two months from the time of termination, the employee is deemed to be continuously employed. For example, an employee is engaged as a cleaner at a shopping centre. The employee is terminated and subsequently re-employed by a cleaning contractor at the same shopping centre within 2 months of termination. The employment is taken be continuous. In the above circumstances, the long service leave entitlement will be reduced by the amount of any long service leave already taken by the employee or paid out.

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Northern Territory

This fact sheet provides an overview of the long service leave entitlements in the Northern Territory, which are governed by the Long Service Leave Act 1981 (NT).

Compliance with the Long Service Leave Act 1981 (NT) is enforced by the Office of the Commissioner for Public Employment through the Court of Summary Jurisdiction; offences against the Act are regulatory offences.

Who is entitled to long service leave?

Full time, part time and casual employees who have completed 10 years continuous service are entitled to long service leave.

What is the long service leave entitlement?

Upon completion of 10 years continuous service, an employee is entitled to 13 weeks long service leave (1.3 weeks per year of continuous service).

Once the initial 10 years’ continuous service is completed, the employee can take further periods of long service leave after completing each subsequent period of 5 years’ continuous service. For each extra 5 year period the employee will accrue an additional 6.5 weeks of long service leave.

Calculating the entitlement

The amount payable to an employee for long service leave is calculated as follows:

 Employee’s rate of pay applicable immediately prior to taking long service leave multiplied by the average number of hours worked per week during that particular year of continuous service (excluding overtime), multiplied by 1.3 weeks.

Example

An employee works 38 hours per week during the whole period of 10 years continuous service. The employee’s rate of pay before taking leave is $15 per hour:

$15 x 38 x 1.3 = $741 per year ($7,410 total for the 10 years of continuous service).

The rate of pay to be used in the calculation must be the fixed rate payable to the employee for their hours of work per week.

If there is no fixed number of hours per week (for example, as occurs in casual employment), then the employee’s long service leave entitlement is calculated according to their average weekly hours for each year of continuous service.

Example:

Over a 5 year period, an employee worked and average of:

(a) 38 hours per week during the first year of continuous service;

(b) 38 hours per week during the second year of continuous service;

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(c) 30 hours per week during the third year of continuous service;

(d) 25 hours per week during the fourth year of continuous service; and

(e) 20 hours per week during the fifth year of continuous service.

The employee’s rate of pay immediately preceding the taking or payment in lieu of the leave is $30 per hour.

The amount payable to the employee is $5,889 being the sum of ($30 x 38 hours x 1.3 weeks) plus ($30 x 38 hours x 1.3 weeks) plus ($30 x 30 hours x 1.3 weeks) plus ($30 x 25 hours x 1.3 weeks) plus ($30 x 20 hours x 1.3 weeks).

Where an employee is paid wholly or partly by commission or bonus, the employee’s long service leave entitlement is calculated by dividing the total amount paid to the employee by the total number of hours worked by the employee for each year, and applying the resulting hourly rate to the employee’s weekly hours calculated according to the above process.

An employee’s pay includes:

 over award payments;

 leading hand, skill or qualification allowance;

 any amounts payable under a bonus or incentive scheme that are usually paid in the employee’s pay for their normal weekly hours of work;

 if the employer provides free board or lodging, a specified amount in lieu of that board or lodging must be paid.

An employee’s pay does not include:

 a district, site or climatic allowance; or

 payments in respect of overtime or penalty rates of pay.

What constitutes continuous service?

The following absences do not break continuity of service and are counted as part of the employee’s total length of service:

 any absence on paid leave (excluding workers’ compensation); or

 any absence as a result of the employer attempting to avoid long service leave obligations.

The following absences do not break continuity of service but are not counted as part of the employee’s total length of service:

 any authorised unpaid absence or absence on worker’s compensation;

 absence due to an industrial dispute where the employee returns to work in accordance with the terms of settlement of that dispute;

 where an employee is stood down because of slackness of trade;

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 after completing a period of apprenticeship with the employer and being re-employed within 12 months;

 termination for any other reason where the employee is re-employed by the employer within 2 months of the termination of employment.

Where an employee is employed in a corporation and, at any time prior, was employed in one or more related corporations and the periods of employment are continuous with one another, the sum of those periods of employment are included in the current period of employment for the purpose of calculating long service leave.

Any period of absence due to the circumstances set out below, is deemed to be a period of employment by the employee with the employer by whom they were last employed before commencing that absence:

 serving full time service in a part of the Reserve Forces or Citizen Forces;

 serving in a part of those forces for a period that was fixed in accordance with regulations under the Defence Act 1903, the Naval Defence Act 1910 or the Air Force Act 1923;

 being on national service; or

 serving as a member of the Civil Construction Corps established under the National Security Act 1939.

How is long service leave paid?

If the employer and employee agree to commence the long service leave at a later date than when it was accrued, they can agree further that the rate of pay to be used for the above calculation will be the rate of pay that the employee was receiving on the date that the initial agreement was made. Refusing to allow the employee to take leave because of operational requirements, without their specific agreement, does not constitute an agreement to defer the date of commencement of long service leave.

When is long service leave paid?

Where an employee takes a period of long service leave, the payment for whole period is to be paid either:

 on or before the last day on which the employee works before commencing the leave; or

 on the pay day immediately before commencing the leave.

How is long service leave taken?

Once the employee is entitled to take the long service leave, the employer must grant the leave at the first available opportunity, taking into consideration the genuine needs of the business. The leave may be taken at a later date agreed between the employee and employer.

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Unless the employee agrees otherwise, the employer must give at least 2 months’ notice specifying the date the leave will be granted.

Long service leave must be taken in one continuous period unless the employer and employee agree for the leave to be taken in up to 3 separate periods of not less than 4 weeks each.

Can long service leave be cashed out?

No. An employee is prohibited from cashing out their long service leave.

How do public holidays affect a period of long service leave?

Where a public holiday occurs during a period of long service leave, the public holiday is deemed to be part of the long service leave and the period of the long service leave is not increased because of the public holiday.

Can an employee work whilst on long service leave?

Whilst on long service leave, the employee cannot perform work that they will be paid for, that is of a kind that the employee has been granted leave from.

This means that an employee can perform work whilst on long service leave, provided that the work is different in nature (for example, a manual labourer can perform office work whilst on long service leave, but cannot perform other manual labour work).

Payment on termination An employee who has become entitled to long service leave and whose employment is terminated (otherwise than by death or due to serious misconduct) is entitled to payment in lieu of long service leave accrued at the time of cessation of employment.

An employee who has completed more than 7 years but less than 10 years’ continuous service is entitled to payment of long service leave for each year of completed continuous service where their employment is terminated:

 because they had attained the age for retirement;

 by the employer for a reason other than serious misconduct; or

 due to an illness, incapacity or domestic or other pressing necessity of such a nature as to justify them ceasing to be an employee.

In the above circumstances, payment should be made as soon as practicable after the termination of employment.

If the employee has accrued an entitlement to take long service leave but was dismissed for serious misconduct, the employee is entitled to payment in lieu of long service leave as follows:

 where the employee has completed at least 10 years but less than 15 years continuous service, payment in lieu of long service leave for the completed 10 years of continuous service only; or

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 where the employee has completed at least 15 years of continuous service, payment in lieu of long service leave for the initial 10 year period, plus payment in lieu for each subsequent period of five years continuous service.

Example

If an employee was dismissed for serious misconduct after 17 years of service, they would receive payment in lieu of long service leave for the 10 years of continuous service plus payment in lieu for the further 5 years of continuous service (15 years total) rather than the 17 years of continuous service that they actually worked.

Where an employee’s employment is terminated as a result of death and they would otherwise have been entitled to long service leave, the accrued entitlement may be paid to the employee’s personal representative upon request. Payment must be made as soon as practicable after the death but not later than 12 months after the death.

What are the record keeping requirements?

An employer is required to keep the following records for each employee:

 the employee’s name;

 date when employment commenced and any previous periods of continuous service;

 details of wages, salary or commissions paid to the employee;

 number of hours per week worked by the employee;

 the employee’s accrued long service leave credit;

 each period of long service leave, or payment in lieu made to the employee;

 each occasion where the employee has been absent for two months or more from that employment; and

 where the employee ceased to be employed, the date that the employment was terminated.

The employer must keep these records for the duration of the employee’s employment and a further 3 years after an employee’s employment has ceased, except where the employee’s employment is terminated by death where the records must be kept for a further 6 years.

What happens to long service leave on transfer of business?

Where there has been a transfer of business, continuity of service is not broken and service with the old employer counts as service with the new employer.

What are the consequences for breaching the legislation?

If a person contravenes or fails to comply with the legislation, it may result in a penalty of $1000 or 6 months imprisonment. If the offence is caused by a body

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corporate, a person who is an officer or director of the body corporate will also be deemed to have committed the offence unless the Court is satisfied that the offence was committed without their knowledge or that all diligence was used to prevent the offence being committed.

An offence can only be prosecuted within 3 years of it occurring.

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Australian Capital Territory

This fact sheet provides information about the long service leave entitlements in the Australian Capital Territory, which are governed by the Long Service Leave Act 1976 (ACT). Who is entitled to long service leave? Full time and part time employees who have completed the required period of continuous service are entitled to long service leave. Casual employees who work regular and systematic hours and have the expectation that regular work will continue are also entitled to long service leave. What is the long service leave entitlement? An employee who has completed 7 years of continuous service is entitled to 6.0667 weeks long service leave. For each subsequent year of continuous service, the employee accrues a further 1/5 of a month of long service leave. As the long service leave entitlement is calculated only on completed years of service (except where the employee’s entitlement is being paid out on a pro rata basis) the long service leave entitlement may be calculated as follows: (1/5 x period of continuous service in years) x 52 = amount of leave in weeks 12 What constitutes continuous service? The following interruptions do not break continuity of service and are counted towards an employee’s total length of continuous service:

 a period of annual leave or long service leave;

 a period of leave, not exceeding 2 weeks in any 1 year, taken because of illness or injury;

 a period during which the service is interrupted or ended by the employer with the intention of avoiding the granting of long service leave;

 the period of an apprenticeship where an employee commences service with an employer within 12 months after completing the apprenticeship with the same employer;

 service by the employee as a member of the Defence Force, other than continuous full time service (continuous service is with the person by whom the employee was employed immediately before the employee began to serve as a member of the Defence Force);

 a period of service when the employee is temporarily outside the ACT if the service would be continuous service if the employee were inside the ACT. The following interruptions do not break continuity of service but are not counted towards an employee’s total length of continuous service:

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 an interruption caused by an industrial dispute if the employee returns to the service of the employer in accordance with the terms of settlement of the dispute;

 a period when an employee is stood down by the employer because of slackness of trade if the employee is re-employed by the employer within 6 months after the day the employee is stood down;

 any other period when the employee is absent with the employer's leave;

 a period when the employee is absent because of injury arising out of or in the course of the employment (including workers’ compensation);

 any other interruption, including ending the service of an employee, if the employee returns to the employer's service within 2 months after the day the service is interrupted;

 an interruption of an employee's service of longer than 2 months if the interruption is caused by the seasonal nature of the work. How is long service leave paid? Payment for long service leave is made at the rate equivalent to the ‘ordinary remuneration’ the employee would have received in respect of the period of leave if they had not taken the leave. Ordinary remuneration excludes overtime, penalty rates and allowances, but does include:

 allowances in respect of skill, qualifications, board and lodging; and

 any amounts payable under a bonus, performance pay or incentive scheme. Part time and casual employees In the case of a part-time or casual employees, the ordinary remuneration is calculated by multiplying the average number of hours worked each week by the employee during the period of twelve months immediately preceding the day on which the employee became entitled to the leave by the ordinary remuneration of the employee. Full time employee converted to part time or casual employee If, within the period of 2 years immediately before the employee becomes entitled to long service, the employee ceases to be employed full time and is employed as a part time or casual employee, the ordinary remuneration is calculated by dividing by 5 the total amount of salary or wages paid to the employee in the period of 5 years immediately prior to becoming entitled to the leave. Commission based employees An employee who is paid completely by commission or partly by salary/wages and partly by commission is taken to be paid completely by salary/wages throughout the year. The amount payable for salary or wages is calculated by dividing the total amount payable in the year by 52. When is long service leave paid? Long service leave must be paid:

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 in advance for the whole period of the leave; or

 at the same time as the employer would have paid the employee if the employee had not taken the leave; or

 in any other way as agreed between the employer and employee. If the payment is made in advance and, after payment is made, the amount of ordinary remuneration payable increases, the payment of the increase must be made as soon as practicable. Where long service leave is paid out on termination of employment, payment must be made as soon as practicable after the termination. Where long service leave is paid out upon the death of the employee, the payment must be made to the employee’s personal representative as soon as practicable after the death and no later than 12 months after the death. How is long service leave taken? The employer must grant a period of long service leave to the employee as soon as practicable after the employee becomes entitled to it (that is, once the employee attains seven years’ continuous service), having regard for the genuine needs of the business. After the employee attains seven years’ continuous service, the employer must also grant a period of long service leave to the employee as soon as practicable after the employee becomes entitled four weeks’ long service leave, having regard for the genuine needs of the business The employer must give at least 60 days written notice of the requirement to take the leave. However, the employer and the employee can agree to the leave being taken at another time. It is an offence for an employer to fail to grant a period of long service leave in accordance with the above requirements. How do public holidays affect a period of long service leave?

Where a public holiday falls during a period of long service leave, the period of long service leave is increased by 1 day for each such public holiday. Can long service leave be cashed out? No. Payment in lieu of long service leave may only be made on the termination of the employee’s employment or the death of the employee. Payment on termination Where an employee’s employment ceases for any reason and the employee had accrued a long service leave entitlement prior to termination, the employee is entitled to payment of that accrued long service leave.

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Pro rata payment on termination Where an employee has completed at least 5 years but less than 7 years continuous service, pro rata long service is only payable where the employment is terminated by the:

 employee because of illness or incapacity or a domestic or other pressing necessity of such a nature to justify the termination;

 employee upon or after attaining the minimum retiring age;

 death of the employee; or

 employer for a reason other than the employee’s serious and wilful misconduct. The amount payable is a proportionate amount on the basis of 2 months for 10 years service (i.e. 0.2 weeks per year). What are the record keeping requirements? For each employee an employer must keep for at least 7 years after the employee’s service ends, a record of:

 the name, occupation and classification of the employee;

 whether the employee is full-time, part-time or casual;

 the employee's ordinary remuneration, including the base rate of pay and any loading payable to the employee, and the purpose of the loading;

 the number of hours the employee works each week;

 the date when the employee starts as an employee;

 any annual leave the employee takes;

 the employee's entitlement to long service leave;

 long service leave granted, or payment instead of leave, made to the employee;

 if the person ceases to be employed by the employer—the date when, and reason, the employee ceases to be employed;

 if overtime may be paid to the employee under an award or agreement— o the number of hours the employee works each day; and o when the employee starts and stops work;

 the employee's date of birth; and

 the name of each award or agreement under which the employee has entitlements.

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What happens to long service leave when there is a transfer of business? Where there has been a transfer of business, a transferring employee’s service is deemed not to have been interrupted and the period of service with the first employer is deemed to be service with the second employer. What are the penalties for breaching the long service leave provisions? Breaches of the long service leave legislation may result in penalties of up to $25,000.

For more information Phone: 1800 RETAIL (738 245)

IMPORTANT INFORMATION

The information in this guide is of a general nature. It is not intended to be a comprehensive summary of the law and should not be relied upon as legal advice.

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