Your guide to long service leave

Long service leave is an entitlement afforded to employees who have served a company for an extended period.
Your guide to long service leave

Long service leave is an entitlement afforded to employees who have served a company for an extended period. An employee’s entitlement to long service leave differs between State and Territory legislation, yet, something that many employers share is the belief that this time will never come! But rest assured, it does arrive; one day an employee will knock on your door and remind you that they’re entitled to long service leave and you will ask yourself: where has the time gone?

Now whether you’re new to long service leave or simply want to brush up on your understanding, it’s important to make sure you’re keeping up to date with how the entitlement works.

So, what do you need to know?

Unlike many aspects and entitlements of employment relations, long service leave isn’t enshrined in the Fair Work Act, instead, it’s dictated by State and Territory legislation. This is significant because the period of service that an employee must serve to access long service leave is determined by where they reside.

But can it really be that different? Absolutely. There’s a surprisingly large variation in long-service leave entitlements across the nation. For each State or Territory in which your business operates, you must know:

1. Length of service requirements

How long does an employee have to serve to access their long service leave entitlement? While 10 years of service is generally the most common threshold an employee must meet, it does vary from State and Territory. For example, in Victoria, the time period is seven years.

2. Pro-rata long service leave entitlements

Is there an option for the employee to access pro-rata long service leave? Pro-rata long service leave is when an employee is paid a portion of the full long service leave entitlement because they were terminated following a notable length of service. Most State and Territories, however not all, allow for a pro-rata entitlement in certain circumstances.

3. The length of the long service leave entitlement

How much leave is accumulated? While each State or Territory’s entitlement is approximately two months in length, it does vary.

4. How is long service leave paid?

Typically, an employee is paid their ordinary rate of pay which is exclusive of allowances, loadings, penalty rates and overtime.

5. Restrictions on how and when long service leave can be taken

How many periods can long service leave be taken in? Some States and Territories force employees to take leave in either one or two separate periods, while others allow for mutual agreement between the employer and employee.

6. Whether casual employees are entitled to access this entitlement

Do casual employees have the right to access long service leave? Just like permanent and part-time employees, long service leave for casual employees is governed by State and Territory laws. While legislation differs between jurisdictions, it’s generally accepted that employees are entitled to long service based on their length of service regardless of whether the service is on a permanent, part-time, or casual basis.

What else do you need to think about?

Did you know that many industries, including the building and construction industry, allow for portable long-service leave? This allows employees to continue accruing their long service leave entitlement even if they work on different projects for one or more employers.

Portable long-service leave is governed by a separate piece of legislation that is specific to each industry. If you think your business may fall into one of these industries, we encourage you to contact us. Our workplace experts will be able to give you tailored advice specific to your business and industry via our 24/7 HR Advice Line.

If your employees are covered by an Enterprise Agreement, they may have different entitlements to those that are employed under State laws. It’s advisable to check your Agreement with each employee to determine whether a long service provision is included.

Next steps

Don’t wait until you’re caught off guard. Be proactive and enhance your understanding of long service leave so when the time arises, and trust us it’ll arrive, you’ll know how to handle it. Citation HR can help you to better understand your obligations as an employer and will ensure you’re 100 per cent compliant with all employment laws and standards. Talk to us today to see how we can help your business.

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