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Employees Taking Long Service Leave

Published December 11, 2020 (last updated February 18, 2021) -
Packing a suitcase to go on leave

Once an employee has worked for you for a long period of time, they can get long service leave. This entitlement usually comes from state or territory laws, so the entitlement is not the same across Australia. Which state or territory law applies will depend on where the employee works at the time they take the leave or their employment ends, even the employer’s registered office is located in another state.

The laws determine when the employee gets long service leave and how much leave they get. They also determine when long service leave is paid, whether employees can be made to take their leave, and whether long service leave can be cashed out (generally not while the employee is still working for their employer).

When Can An Employee Take Long Service Leave?

Employees usually get entitlements after 10 years of continuous service with the one employer, whereby periods of unpaid leave may be deducted from the employee’s length of service when calculating the long service leave. In some states and territories employees get their entitlement earlier, or they may be entitled to a pro-rata leave amount if their employment ends in certain circumstances.

In most states and territories long serving casuals are eligible for long service leave too.

Portable Long Service Leave

Some states and territories have legislation to provide employees in certain industries, mainly the security, community services, building and construction, coal mining, and contract cleaning industries with access to portable long service leave. This means employees continue to accrue long service leave whilst working for different employers within the same industry.

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Payment Of Long Service Leave

How much an employee is paid for long service leave depends on the applicable state or territory legislation. In most cases, long service leave is paid at the employee’s ordinary pay rate. The ordinary pay rate is the employee’s base pay rate for their usual hours of work (ie what they would have worked if they hadn’t taken leave) and doesn’t include:

  • allowances
  • shift loadings
  • penalties
  • overtime.

When is Long Service Leave Paid Out?

Any unused long service leave generally has to be paid out at the end of employment, but in some states and territories employees do not get (pro-rata) long service leave if they have been dismissed because of Serious Misconduct. Long service leave usually can’t be cashed out while the employee is still working for the business, but it depends on the relevant state or territory legislation.

Payment Of Pro-Rata Long Service Leave

When employment ends before an employee has worked the total number of years needed to get the full long service leave entitlement, they can sometimes get paid out part of their long service leave. This is known as pro-rata long service leave on termination. Whether an employee gets paid out pro-rata long service leave when their employment ends depends on the long service laws in the state or territory they work in. Generally, employees will get pro-rata leave after a certain amount of time if they resign as a result of death, illness, incapacity, retirement, domestic or other pressing necessity but the time and reasons differ per state or territory. There is no pro-rata leave in the Victorian Long Service Leave Act 2018.

Long Service Leave And COVID-19

Some States and Territories have temporarily amended their long service leave legislation to provide greater flexibility for employers and employees during the COVID-19 pandemic. For example, in New South Wales the Long Service Leave Act 1955 (the Act) has been amended up until 24 March 2021 to allow an employer to give less than one month’s notice to take long service leave, if they agree. The Act also now allows employees to take leave in advance in smaller blocks, this amendment is in place until 13 May 2021 and allows for agreement to take as little as one day at a time, so that the employee can now work part of the week and take the rest off as long service leave, even when they have not worked long enough in the business to be eligible to take the leave. However, they may have to repay the leave if they leave the business before their entitlement becomes due.

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About Employsure

Employsure is one of Australia’s largest workplace relations advisers to small- and medium-businesses, with over 25,000 clients. We take the complexity out of workplace legislation to help small business employers protect their business and their people.

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