On 1 November 2018, some changes to the long service leave (LSL) provisions in Victoria will apply when the Long Service Leave Act 2018 (Vic) (the 2018 Act) comes into effect, replacing the Long Service Leave Act 1992 (Vic) (the 1992 Act). The changes are designed to provide greater flexibility in how long service leave can be taken.
Under the 2018 Act, an employee can apply to take LSL after seven years of continuous employment with one employer. Previously under the 1992 Act, an employee could only take LSL after 10 years of continuous employment, (although LSL entitlements would be paid out upon termination after seven years of continuous employment).
Another key difference between the 1992 Act and the 2018 Act is the treatment of unpaid leave, which includes unpaid parental leave. Under the 1992 Act, periods of paid or unpaid parental leave over 12 months could, in some circumstances, break continuity of employment, resetting an employee’s long service leave entitlement to zero.
From 1 November 2018, no period of leave will break a permanent employee’s continuity of employment. Under the 2018 Act, LSL accrues on all periods of unpaid leave of 52 weeks or less, including unpaid parental leave, as this leave now counts towards continuous employment. In limited circumstances, periods of unpaid leave longer than 52 weeks will also count towards continuous employment. Casual and seasonal employees can now take up to 104 weeks (or 24 months) of paid or unpaid parental leave without breaking continuity of employment.
Another key change in the 2018 Act is that an employee will not lose their long service leave where they resign, as long as they are re-employed within 12 weeks. The 2018 Act provides that employment is now taken to be continuous despite an absence from work where the employment was terminated at the initiative of the employee or the employee, provided that the employee is re-employed by the same employer within 12 weeks after their employment ends. Previously, resignation by the employee had the effect of breaking continuous service, irrespective of whether the employee was re-employed by the same employer shortly afterwards.
An employee can also now take a minimum of one day of Long Service Leave under the 2018 Act, provided that there is mutual agreement between the employer and employee about taking the leave. An employer must also grant an employee’s request to take long service leave as soon as practicable after receiving the request, unless there are reasonable business grounds to refuse the request. This differs from the 1992 Act, which merely required that the employer and employee agree when the employee is to take the leave.
- The 2018 Act has also introduced a new method of calculating long service leave for employees whose hours of work have varied throughout their employment. In these circumstances, LSL should be calculated on the basis of:
an employee’s hours of work over the past 12 months;
- over the past five years; or
- an employee’s average hours worked over the whole period of continuous employment (new).
An employee is entitled to the greatest LSL payment available from these three methods of calculation. For employees whose hours of work have not varied, the methods of calculating LSL remain the same as under the 1992 Act.
Should you have any questions regarding these amendments, please contact Justitia on 03 8621 4500.