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CHANGES TO LONG SERVICE LEAVE ENTITLEMENTS

Paul Money Partners > Blog > CHANGES TO LONG SERVICE LEAVE ENTITLEMENTS

On 8 May 2018, the Victorian Parliament passed the Long Service Leave Act 2018 (Vic) (the New Act). The New Act repeals the Long Service Leave Act 1992 (Vic) (the Current Act) and introduces key changes to Victorian employees’ long service leave entitlements. The New Act has come into effect on 1 November 2018. The major differences between the Current Act and the New Act are outlined below:

Entitlement to take Annual Leave
  • Under the Current Act, an employee can take long service leave after 10 years’ ‘continuous employment’ without any ability to take long service until that time (although a pro-rata entitlement is payable to an employee on termination in some cases after seven years’ ‘continuous employment’).
  • Under the New Act, an employee can take long service leave after seven years continuous employment.
Leave Period
  • Under the Current Act, long service leave must be taken as one period unless the employee and employer agree to separate periods.
  • Under the New Act, employees may take long service leave at a minimum of one day’s leave at a time with the approval of the employer (such approval must be granted upon request unless there are reasonable business grounds for declining the request.
Calculation of “continuous service”
  • Under the Current Act, unpaid parental leave is not included when calculating an employee’s continuity of service. Under the New Act, unpaid parental leave of up to 52 weeks will be included when calculating an employee’s continuity of service.
  • Under the Current Act, if an employee is dismissed and is re-employed within three months of being dismissed, continuity of service is not broken. However, this does not apply where the employee resigns. Under the New Act, if there is a termination of employment at the initiative of either the employer of the employee and the employee is re-employed within three months, continuity of service is not broken.
  • If an employee performs duties in connection with any asset used in the carrying on of a business and those assets are transferred to another employer who continues the employment of the employee, the employment will be treated as having continuous employment across both employers. Under the Current Act, “assets” included land, plant and equipment only. Under the New Act, the definition of “assets” has been amended to include tangible and intangible assets (such as goodwill, intellectual property and client lists). This means under the New Act, an employee’s employment will be considered ‘continuous’ if they perform duties in connection with the intangible assets.
Calculating Leave where an employee’s hours are not fixed or have changed
  • Under the Current Act, where an employee does not have fixed hours or their hours change during the 12 months before long service leave is taken, the employees’ ‘ordinary hours’ is to be taken to be the greater of the average weekly hours over the 12 months immediately preceding the taking of long service leave or the five years immediately preceding the taking of long service leave.
  • Under the New Act, where an employee does not have fixed hours or their hours change during the 24 months before the long service leave is taken, the employees’ ‘ordinary hours’ is to be taken to be the greater of the average weekly hours over the 12 months immediately preceding the taking of the long service leave, the five years immediately preceding the taking of long service leave (including paid and unpaid parental leave).
Requests by Authorised Officers

Under the New Act, authorised departmental officers can request the production of records when investigating alleged breaches. A failure to comply with the request without reasonable excuse will be an offence under the New Act.

Penalties for failure to pay long service leave

Under the New Act, penalties for body corporate for failure to pay long service leave will increase to 60 penalty units (currently being $9,514.20).

<Courtesy of Sackville Wilkes>