FocusOn - Long service leave

All Victorian employees are entitled to the minimum Long Service Leave provisions of the Long Service Leave Act. A minimum of 13 weeks Long Service Leave (LSL) applies after 15 years of continuous service. Employees receive their ordinary pay whilst on leave.

The Victorian Long Service Leave provisions apply to all Victorian employees who are not entitled to better provisions contained in a Federal Award, enterprise or individual agreement.

Changes to Long Service Leave

The Parliament of Victoria enacted an amendment to the Long Service Leave Act 1992.

The change was effective from 1 January 2006 and affected the measurement of Long Service Leave as of 30 June 2005 for employees covered by the legislation.

The main changes introduced by the amendment are as follows:

	Long service leave will no longer include any public holiday occurring during the period when the long service leave is taken.
	The qualifying period required before an employee is able to take LSL has been reduced from 15 years to 10 years.
	The timeframe for an entitlement to a pro-rated LSL payment on termination has been reduced from 10 yeas to 7 years.

Despite the changes to the applicable time periods for accruals of rights to long service leave, the leave continues to accrue at the rate of 0.86 weeks for each year of service.

Long Service Leave entitlement

Employees will be entitled to take of 8.6 weeks long service leave upon completion of 10 years of continuous employment with the same employer.

However, only 2/3 of the employee's continuous employment completed prior to 1 January 2006 will count as continuous employment and will be reflected in long service leave entitlement.

Continuity of employment

Employment will be regarded as continuous if:

	there is an absence of more than 3 months but the length of the absence is due to the terms of the engagement of the employee by the employer or due to the seasonal nature of the employee's employment.
	there is no more than an absence of 3 months between each instance of employment; or

Continuity of employment will no longer be affected by:

	absences approved by the employer, including carer's leave; and
	any period of adoption, maternity or paternity leave not exceeding 12 months (or other period as agreed).

Termination of employment

If an employee has completed at least 7 years of continuous employment with the same employer, pro-rata long service leave payments are available to them upon termination of their employment. These entitlements will now not be forfeited even in the event of dismissal for serious misconduct.

For employers

Following the changes the Long Service Leave Act, it is important that you update your HR systems to enable calculation of LSL according to these changes.

Furthermore, we recommend that employers engage in the following:

	thorough review of your obligations under the LSL Act, especially in relation to the amendments which commenced on 1 January 2006; and
	review your current LSL obligations and policies and determine whether the changes to the LSL Act have been correctly incorporated into them.

Should long service leave be regulated by an industrial instrument such as award or certified agreement or Australian Workplace Agreement, employers should also review those relevant entitlements.

Visit the Victorian Industrial Relations website for further details at: www.business.vic.gov.au

Published : 26 July 2007