The Ambiguity of Long Service Leave Laws - Q&A Part 1

Posted on 01 November 2011

One thing that all long service leave laws have in common is that they have all been around for quite some time. One commentator has recently said ‘the laws are reasonably old’ causing significant problems for employers and indeed employees.

The Call for a Uniform Approach to Long Service Leave Australia-Wide

As it currently stands, Australia does not posses a uniform long service leave standard. Although we do have the National Employment Standards, the extent of which it deals with long service leave is nothing short of partial. The National Employment Standards simply ‘preserve old long service leave entitlements found under some long-standing federal awards and enterprise agreements’.ii

For employees not covered by old federal awards and enterprise agreements preserved by the National Employment Standards, their long service leave entitlements, are governed by State legislation.

The contemporary problem lies in the fact that each State has its own individual stance on long service leave and employers who operate offices nationally often struggle to juggle their respective obligations to their respective employees.

NSW’s Approach

Long service leave in NSW is governed by the NSW Long Service Leave Act 1955. Due to the complexity of the legislation we have prepared a two parts series addressing some frequently asked questions to help both employers and employees alike to understand more about their respective rights and obligations in relation to long service leave.

Long Service Leave Entitlements

Q. What long service leave entitlements can I expect?

A. Workers in NSW are entitled to two (2) months of paid long service leave after ten (10) years service with their employer. This will increase by one (1) month each additional 5 years of service.

Q. Are causal employees entitled to long service leave?

A. Under the Long Service Leave Act 1955 (NSW) full-time, part-time and casual workers all have a potential entitlement to LSL. Casual workers who work on an continuous basis without any break in their employment are entitled to the long service leave entitlements as permanent staff. Employer need to ensure that long service leave entitlements are accruing for relevant casual employees in their payroll systems so as to not get ‘caught short’

Q. What if I resign, how does that affect my long service leave entitlements?

A. Workers who have performed 10 years of service and above are automatically entitled to long service leave upon resignation.

Workers who have performed between five (5) to 10 years service (not over 10 years service) in NSW have the benefit of a pro-rata entitlement upon resignation. This means that workers are entitled to some portion of their total long service leave entitlement when they resign.

It is important to be aware that the law requires that the resignation be purely because of either of the following reasons:

  1. Illness;
  2. Incapacity; or
  3. Domestic or other pressing necessity.

If the resignation does not fall within one of the above reasons, then a worker may be deemed ineligible for pro-rated long service leave entitlements.

Q. What if I have been forced to resign from my job, does that mean I am not entitled to my accrued long service leave?

A. Recent decisions of the courts show that in certain circumstances workers who have been forced to resign from their employment because of a particular irresolvable issue have been entitled to pro-rated long service leave entitlements.

Q. What are some examples of situations where workers have been entitled to pro-rated long service leave upon resignation?

A.

  1. Pregnant workers resigning to care for a child;
  2. Workers who take on the responsibility of caring for sick children or relatives; or
  3. Workers in financial hardship who have had to resign as they were finding it difficult to maintain current work related expenses.

Other situations where workers have been entitled to long service leave entitlements despite only performing under 10 years service include:

  1. Workers dismissed other than for serious misconduct; or
  2. Workers who pass away in the course of employment.


Q. What are examples of situations where workers have not been entitled to pro-rated long service leave upon resignation?

A.

  1. Workers resigning for a better paying job; or
  2. Workers resigning for a more convenient job.


Check back soon to see part 2 of our Long Service Leave Q&A's.

If you have an enquiry about your employment situation, make an enquiry.

i Hrdaily, ‘Outdated LSL laws creating headaches for employers’, <http://www.hrdaily.com.au/nl06_news_selected.php?act=2&stream=All&selkey=1974&hlc=2&hlw=> accessed 20 October 2011.

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