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Long Service Leave.

Long Service Leave.

You may have employees working for your business that have worked with you for a long period of time. Depending on where your business operates, these employees are entitled to certain things, one of them being long service leave. So it is important as an employer that you’re both aware and able to deliver on these entitlements.

What is long service leave?

For most employees in Australia, if they have been working for the same employer for an extended period of time, they are entitled to long service leave. But the entitlement is different for each state and territory. So depending on where they have been working, long service leave entitlements could vary. There are two key aspects to each region’s definition of long service leave. They are:

  • How long an employee has to be working to qualify
  • How much leave the employee receives

Long Service Leave Payment.

Just like other forms of leave, long service leave also entitles employees to payment during their term of leave. But how much an employee is entitled to be paid during long service leave is dependent on the state or territory in which they are employed. In most cases, the employee’s ordinary pay rate is continued through a long service leave period. It is important to note that the ordinary pay rate is the employee’s base pay rate for their usual hours of work and does not include:

  • Allowances
  • Shift loadings
  • Penalties
  • Overtime

Generally speaking, pay during long service leave is paid out at the employee’s normal weekly hours at the same rate of pay, with any additional benefits and payments not included. But sometimes it is not as simple first thought. An employee’s ordinary rate of pay, or the pay entitlement during long service leave, can differ depending on the specific situation. So there are two ways of calculating the ‘ordinary pay rate’:

  • The amount of the ordinary remuneration as at the time the employee takes the leave
  • The average weekly remuneration the employee earned in the previous five years

When it comes to deciding which of the above is used for long service leave payment, it is always the greater of the two.

This differs though when an employee does not have a fixed weekly amount of pay. For instance, if the employee is paid on a commission basis or if the employee is casual and does not have a fixed number of hours they work each week. If this is the case, then long service leave payment is worked out as the greater of the two below rates:

  • The average weekly earnings over the previous 12 months
  • Their average weekly earnings over the previous five years

It is also important to remember that any unused long service leave has to be paid out at the end of employment and usually it cannot be cashed out while the employee is still working for the business.

When Does An Employee Qualify for Long Service Leave?

For an employee to qualify for long service leave, they need to have been in continuous employment with the same employer. That does not mean to say that they need to have been working in the same position though. Even if the employee’s duties, responsibilities, pay or position have changed over the extended period, they are still eligible for long service leave.

Continuous service is also achieved if the:

  • Employee is transferred between companies within the same group
  • Business is sold and the employee continues to work for the new owner running the same business

In some cases, an employee’s leave entitlements may be specified under a federal agreement or award, other than a modern award or another Act. So before anything else, it is important that you check if there are leave entitlements under the relevant award.

State and territory legislation.

Generally, employee entitlement is derived from state-based legislation, unless the associated Modern Award contains an entitlement to long service leave (which most do not). Below are summaries for each state and territory, however, be advised that the information should be used as a guide only. If you are unsure, please call Employsure.

New South Wales.

Employees in New South Wales are covered by the Long Service Leave Act 1955 (the Act).

Under the Act, employees are entitled to two months of long service leave upon the completion of at least 10 years of continuous service with their employer. On top of this, for each additional five years of service after the initial 10, employees are entitled to a further month of long service leave. This month is defined to be just over four weeks in length (or more specifically, four and a third weeks).

Victoria.

Employees in Victoria are covered by the Long Service Leave Act 1992 (the Act).

Under the Act, employees are entitled to just over eight weeks (or more specifically, eight and two thirds weeks) of leave upon the completion of at least 10 years of continuous employment with their employer. On top of this, for each additional five years of employment after the initial 10, employees are entitled to just over four extra weeks of leave (or more specifically, four and one third weeks).

Queensland.

Employees in Queensland are covered by the Industrial Relations Act 1999 (the Act).

From the 3 June 2001, long service leave entitlement in Queensland is just over eight weeks (or more specifically, eight and two third weeks) after a period of 10 years of continuous employment. Beyond ten years of continuous service, employees are entitled to further long service leave for each additional five years of continuous service.

It is important to note if you are an employer in Queensland that for employees who were engaged prior to 3 June 2001, transitional arrangements apply, which affect the time when an employee is able to take the leave.

Australian Capital Territory.

Employees in the Australian Capital Territory are covered by the Long Service Leave Act 1976 (the Act).

Under the Act, employees are entitled to just over six weeks of leave upon completion of at least seven years of continuous service. For each subsequent year of continuous service, employees accrue a further one fifth of a month of long service leave.

Please note that the Act does not apply to Public Sector employees or employees covered by the Long Service Leave (Building and Construction Industry) Act 1981, or the Long Service Leave (Contract Cleaning Industry) Act 1999, or the Long Service Leave (Portable Schemes) Act 2009.

Western Australia.

Employees in Western Australia are covered by the Long Service Leave Act 1958 (the Act). It is important to note though that The Act does not apply to employees in the building and construction industry.

Under the Act, employees are entitled to over eight weeks (specifically eight and two thirds) of long service leave after the completion of at least 10 years of continuous employment with their employer. On top of this, for each additional five years of continuous employment following the initial 10 years, employees are entitled to a further four and one third weeks of long service leave.

Northern Territory.

Employees in the Northern Territory are covered by the Long Services Leave Act 1976 (the Act).

Under the Act, employees are entitled to 13 weeks of long service leave upon completion of at least 10 years of continuous employment with their employer. On top of this, they are entitled to an extra week of long service leave for each additional five years of service following the initial 10 years.

South Australia.

Employees in South Australia are covered by the Long Service Leave Act 1976 (the Act).

It is important to note that The Act does not apply to Public Sector employees or employees covered by the Long Service Leave (Building and Construction Industry) Act 1999 or the Long Service Leave (Portable Schemes) Act 2009.

Under the Act, employees are entitled to 13 weeks of long service leave upon the completion of at least 10 years of continuous employment with their employer. On top of this, they are entitled to an additional one and a third week of long service leave for each year of service after the initial 10 years.

Tasmania.

Employees in Tasmania are covered by the Long Service Leave Act 1976 (the Act). However, if you are an employer in the mining industry, please note that separate provisions under this Act apply to mining employees.

Under the Act, employees are entitled to eight and two thirds weeks of long service leave upon the completion of at least 10 years of continuous employment with their employer. On top of this, they are entitled to four and one third weeks for each additional five years of service after the initial 10 years.

To Find out about long service leave entitlements in your state or territory, contact Employsure today.

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