Long Service Leave

Long service leave is an employee entitlement unique to Australia and New Zealand. This is an ingrained part of Australian workplace culture that has been encoded into both state and federal legislation, including the National Employment Standards. However, it is frequently not taken when it falls due, calling into question the very purpose of the entitlement. This article explains the history and requirements for long service leave under federal law.

History Of Long Service Leave In Australia

Long service leave arose out of the public service in colonial Australia. In the 1860s, the vast majority of those in government administration in the then Australian colonies were British subjects. Public servants would sail to Australia to take up residence, a journey that would take at least a month, in an age when there was no easy way to keep in constant touch with family back home in England. To ease the tyranny of distance, public servants in Victoria and South Australia were granted a furlough after ten years in order to sail home to England. The furlough was three months long to allow for two months of travel there and back and a month of recreation in England. This leave gave the employee the security of knowing that their positions would be waiting for them when they returned.

After 1950, this entitlement was extended to other Australian workers in response to social pressure, despite the fact that by this date, the original purpose of the leave was no longer as relevant.

What are employees entitled to?

Employees in Australia are entitled to certain mandated National Employment Standards (NES) that pertain to leave, redundancy, and long service leave. These 11 minimum requirements apply to the employment of all employees. The NES applies to all employees in Australia that are governed by the national workplace relations system, regardless of what other agreement, contract or award applies to their employment. In many states and territories, including Queensland, New South Wales and Victoria, long-term casual employees are also eligible.

An employee is entitled to a long period of paid recreational leave after they have worked for the same employer for an extended period of time. The exact rules that relate to the entitlement vary according to the jurisdiction and particular circumstances. The law in the specific state or territory sets out the mandatory minimum amount of time before an employee can take long service leave, and how much leave they receive. Typically, if an employee is with one company for between 7 and 15 years, they are able to take approximately ninety days paid long service leave.

Employers must comply with the regulations in their specific state or territory. If a company operates across state or territory lines, they must have separate long service leave standards so that the jurisdiction’s regulations cover the employees.

Portable Long Service Leave

By its nature, long service leave is a reward for a long period of service to one employer. As a result, it is less available to some workers, as the nature of these industries favours short-term contracts with a succession of different employers.

In some states and territories, workers in the building and construction, security, community service, coal mining and contract cleaning industries are able to access portable long service leave. An employee in one of these fields can continue to accumulate long service leave as they transition to new projects and employers. For instance, in Queensland, an employee who works for multiple employers in the construction industry can access QLeave after working for the required period from the Portable Long Service Leave Scheme. This applies even if the employee has worked for the same employer for ten years. Although the employer will be responsible for paying for the leave, QLeave may refund at least some of the cost to the employer.

Pre-Modern Award Long Service Leave

State and federal laws do not apply when the employee is still covered by a federal pre-modern award entitlement. An award from before 2010 will set out the terms under which an employee can access long service. For instance, a part-time employee in Victoria might have worked for a company under an industry award for 11 years to qualify for long service leave. In this case, the regulations of the federal pre-modern award will apply rather than those in the Long Service Leave Act 2018 (Vic).

Resignation, Termination, Company Insolvency

When a worker leaves a company, if they have been with an employer for a certain minimum amount of time (usually five years), they will typically be paid out any accumulated long service leave entitlement on a pro-rata basis. This applies if the employee retires or leaves because of illness or personal issue, or their employment is terminated for any reason other than willful or serious misconduct. If a company ends up insolvent, and an employee would otherwise lose their accumulated entitlements, then the federal government does provide help under the Fair Entitlements Guarantee to access accumulated leave entitlements, including the right to Long Service Leave.

Please contact Armstrong Legal on 1300 038 223 if you have any questions about any employment law matter.