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Long Service Leave presented by

Chris Biddle National Payroll Manager

Introduction – what is Long Service Leave?

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An additional employee vacation payable after, as the name implies, for extended service with an employer in Australia

• Employees who remain with a particular employer for ten years will typically receive an entitlement of eight and two-thirds weeks' (two calendar months) paid leave, more on a pro rata basis, the longer they stay with that employer.

• The amounts of eligible leave and the years of service required differ from state to state.

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• In keeping with the NES, Fair Work and Modern Award introductions, there is hope for a federal system of Long Service Leave. However, little progress has been made.

• It should also be noted that some industries have portable LSL schemes, e.g. Building & Construction.

Victoria

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The new Long Service Leave Act 2018 (LSL Act 2018) commences operation on 1 November 2018. It replaces the Long Service Leave Act 1992, following a legislative review and broad industry and community consultation. The LSL Act 2018 brings long service leave into line with community standards, is easier to understand, and is fairer and more flexible.

Victoria

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Most Victorian employees are covered. However, the LSL Act 2018 will not apply to certain employees who are covered by federal enterprise agreements or pre-reform awards, or by other Victorian legislation that includes long service leave entitlements, e.g. the Construction Industry Long Service Leave Act 1997 administered by CoINVEST for workers in the construction industry.

Legislation • Long Service Leave Act 2018 What is the accrual rate? • 13 weeks after 15 years (from 1 Jan 1965) • then 4⅓ weeks for each 5 years • previously 13 weeks for 20 years (up to 31 Dec 1964)

Victoria

Are casuals entitled to long service leave? • Yes, casuals have entitlement (incl seasonal workers & fixed term) provided their service is “continuous”, which means…

Victoria

…there must not be an absence of more than 12 weeks between any two instances of employment, unless: • the employee and the employer so agree before the start of the absence, or • the absence is in accordance with the terms of the engagement, or • the absence is caused by seasonal factors, or • the employee has been employed on a regular and systematic basis and has a reasonable expectation of being re-engaged.

Victoria

Can long service leave be taken before the entitlement date? • Yes, LSL can be taken in advance of entitlement, if the employer and employee both agree.

Victoria

Can any amount of LSL be taken or must the employee use specific amounts? • Long service leave can be taken for any period of one day or more

Victoria

If employee terminates before entitlement date, is pro rata paid? • Paid for service after 7 years What are the special reasons? • No special reasons

Victoria

How do we pay LSL? • Pay at ordinary rate immediately prior to going on leave. • If hours of work are variable, or have changed in the past 12 months, use the average hours of work for the last 12 months, 5 years or entire period , whichever is greater. • Ordinary pay may include commissions, bonuses & salary sacrifices. • Leave can be taken at 1/2 pay for twice as long, if it is reasonable considering the needs of the employee and the business.

Victoria

What counts towards the period of employment? All forms of paid leave count towards the period of continuous employment for long service leave accrual. Examples include: annual leave, carer’s leave, and long service leave. Unpaid leave also counts. However, unpaid leave exceeding 52 weeks will not count unless:

Victoria

What counts towards the period of employment? • The period of absence is taken to be a period of employment

in accordance with the relevant written or oral employment agreement

• The employee and employer agree in writing before the leave is taken that the leave is taken to be a period of employment

• The leave taken is because of illness or injury or is any other form of leave provided for in the relevant written or oral employment agreement.

Victoria

Can LSL be cashed out? • No (although a enterprise agreement can over-rule this) Can paid work be done whilst on LSL? • No (there is also a penalty for an employer to employ someone they know to be on LSL)

Victoria

Can the employer require the employee to take LSL? • Yes, employer can give 12 weeks’ written notice, after employee has LSL entitlement. Is there an extra day of leave for a Public Holiday during LSL? • Yes, public holidays are paid in addition to LSL.

Victoria

What if the employee is re-employed? • where the employee is subsequently re-employed within 12 weeks , continuous employment is not broken • If the worker is stood down due to slackness of trade, service continues un-interrupted.

Victoria

Victorian – Long Service Benefits Portability Act 2018

• Passed 4th September 2018 • Commencement?...no later than 1st July 2019 • Applies to;

– community services – excluding health and aged care – contract cleaning, and – security sectors

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NSW

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Legislation • Long Service Leave Act 1955 What is the accrual rate? • 2 months after 10 years (from 1 Apr 1963) • then 1 month for each 5 years • previously 3 months for 20 years (up to 31 Mar 1963)

NSW

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Are casuals entitled to long service leave? • Yes, casuals have entitlement (from 9 May 1985) Can long service leave be taken before the entitlement date? • Yes, LSL can be taken in advance of entitlement, if the employer and employee both agree. The amount taken must be at least 1 month.

Can any amount of LSL be taken or must the employee use specific amounts? • LSL should be used in one continuous period. Separate periods may be agreed as follows: 2 months = 2 periods; less than 19.5 wks = 2 or 3 periods; more than 19.5 wks = 2, 3, or 4 periods.

NSW

If employee terminates before entitlement date, is pro rata paid? • Paid for service between 5 & 10 years, for special reasons only. What are the special reasons? • When leaving because of – illness, incapacity, death, “domestic or other pressing necessity”, termination by employer (except for serious & wilful misconduct).

NSW

How do we pay LSL? • Worker’s ordinary pay for last pay period or the average weekly ordinary rate of pay earned over the last 5 years, whichever is greater. • Where the worker’s weekly hours are variable, average the last 12 months weekly hours and the last 5 years weekly hours and pay the greater. • Shiftwork, other penalty rates and overtime are NOT included.

NSW

How do we pay LSL? • Pay includes average weekly amount of bonuses received in the last 12 months (or 5 year average if used earlier). • Bonus payments are NOT to be taken into account if the ordinary pay, not including bonus, is more than $145,500 p/a. • Pay on completed years only after 15 years.

NSW

What stops LSL accruing? • Unpaid Parental Leave • Leave Without Pay What about during illness or injury? • illness or injury (paid or unpaid) – accrual continues

NSW

Can LSL be cashed out? • No (although a enterprise agreement can over-rule this) Can paid work be done whilst on LSL? • Silent

NSW

Can the employer require the employee to take LSL? • Yes, employer can give 1 months’ notice, after employee has LSL entitlement. Is there an extra day of leave for a Public Holiday during LSL? • Yes, public holidays are paid in addition to LSL.

NSW

What if the employee is re-employed? • If the worker was put off by the employer then re-employed within 2 months, the prior service must be recognised. • If the worker is stood down due to slackness of trade, service continues un-interrupted

NSW

Legislation • Industrial Relations Act 1999 (as of 10 Dec 2009) What is the accrual rate? • 8.6667 weeks after 10 years (from 3 Jun 2001) • then 4.3333 weeks for each 5 years • previously 13 weeks after 15 years (11 May 1964 to 2 Jun 2001) • and prior to that 13 weeks for 20 years (up to 10 May 1964)

QLD

Are casuals entitled to long service leave? • Yes, casuals have entitlement (from 30 Mar 1994) • Or if worked at least 32 hours in each consecutive 4 week period (23 Jun 90 to 30 Mar 94) Can long service leave be taken before the entitlement date? • Silent

QLD

Can any amount of LSL be taken or must the employee use specific amounts? • Silent, except: If LSL is required by employer to be taken, having given the employee 3 months’ notice, the minimum LSL to be taken is 4 weeks.

QLD

If employee terminates before entitlement date, is pro rata paid? • Paid for service between 7 & 10 years, for special reasons only. What are the special reasons? • When leaving because of – illness, incapacity, death, “domestic or other pressing necessity”, termination by employer (except because of conduct, capacity or performance)

QLD

How do we pay LSL? • Pay at ordinary rate immediately prior to going on leave. • If casual or part-time at any time, average service hours over accrual period at the current hourly rate of pay (ie actual service hours ÷ 52 x 8.6667 ÷ 10 x $ RATE). • Default average commission = commission per year ÷ 52.179

QLD

What stops LSL accruing? • Unpaid Parental Leave • Leave Without Pay • All unpaid leave What about during illness or injury? • Accrual continues during paid illness or injury.

QLD

Can LSL be cashed out? • If permitted by an award/workplace agreement or by approval of the Commissioner Can paid work be done whilst on LSL? • Silent

QLD

Can the employer require the employee to take LSL? • Yes, employer can give 3 months’ notice, after employee has LSL entitlement. The employee must take at least 4 weeks LSL. Is there an extra day of leave for a Public Holiday during LSL? • Yes, public holidays are paid in addition to LSL.

QLD

What if the employee is re-employed? • If the worker was terminated by the employer or voluntarily resigned then re-employed within 3 months, the prior service must be recognised. • If the worker is stood down due to slackness of trade, service continues un-interrupted.

QLD

Legislation • Long Service Leave Act 1987 (as at 1 Jan 2009) What is the accrual rate? • 13 weeks after 10 years (from 1 Jan 1972) • then 1.3 weeks for each year • previously 13 weeks after 15 years (1 Jan 1966 to 31 Dec 1971) • and prior to that 13 weeks for 20 years (up to 31 Dec 1965)

SA

Are casuals entitled to long service leave? • Yes, casuals have entitlement Can long service leave be taken before the entitlement date? • Yes, LSL can be taken in advance of entitlement, if the employer and employee both agree.

SA

Can any amount of LSL be taken or must the employee use specific amounts? • LSL should be taken in one continuous period. However, the employer and employee can agree to have it taken in separate periods.

SA

If employee terminates before entitlement date, is pro rata paid? • Paid for service between 7 & 10 years, on completed years only. What are the special reasons? • Any reason except serious & wilful misconduct or, if an employee unlawfully terminates their employment.

SA

How do we pay LSL? • Pay at weekly rate at time leave is taken. • If paid commission, average of last 12 months • If, at some time in the previous 3 years, worker was employed on an hourly rate or hours of work were varied, average the number of weekly hours over last 3 years at current hourly rate of pay. • On termination pay on completed years only.

SA

What stops LSL accruing? • Unpaid Parental Leave • Leave Without Pay. What about during illness or injury? • Illness or injury (paid or unpaid) – accrual continues Can LSL be cashed out? • Yes, if agreed in writing

SA

Can paid work be done whilst on LSL? • No (there is also a penalty for an employer to employ someone they know to be on LSL) Can the employer require the employee to take LSL? • Yes, employer can give 60 days’ notice, after employee has LSL entitlement. Is there an extra day of leave for a Public Holiday during LSL? • No, public holidays are not paid.

SA

What if the employee is re-employed? • If the worker was put off by the employer then re-employed within 2 months, the prior service must be recognised. • If the worker is stood down due to slackness of trade, service continues un-interrupted.

SA

Legislation • Long Service Leave Act 1981 (as of 27 Oct 2004) What is the accrual rate? • 1.3 weeks for each completed year of service for 10 years continuous service • then 1.3 weeks for each year of service on the completion of each further 5 years’ service. • All service accrues at the current rate, prior accrual rates are completely over-ridden

NT

Are casuals entitled to long service leave? • Yes, casuals have entitlement Can long service leave be taken before the entitlement date? • Silent Can any amount of LSL be taken or must the employee use specific amounts? • LSL should be taken in one continuous period. However, the employer and employee can agree to have it taken in separate periods of no less than 4 weeks each.

NT

If employee terminates before entitlement date, is pro rata paid? • Paid for service between 7 & 10 years for special reasons only and calculated on completed years only. What are the special reasons? • When leaving because of – reaching minimum retirement age (or 65), illness, incapacity, retirement, death, “domestic or pressing necessity”, termination by employer (not for serious misconduct).

NT

How do we pay LSL? • Pay average ordinary hours worked at current rate of pay for the period of ‘entitlement’ service • Include over-award payment, allowances such as industry, leading hand, skill or qualification or service grant. • Plus any amounts payable under a bonus, performance pay or incentive scheme that are usually paid to the employee with his or her salary or wages.

NT

How do we pay LSL? cont • On termination, pay on completed years only - However, if terminated with service between 10 & 15 years because of misconduct, calculate on 10 years’ service only. - And after 15 years, if terminated because of misconduct, calculated on complete periods of 5 years.

NT

What stops LSL accruing? • Unpaid Parental Leave • Leave Without Pay • Unpaid sick leave • Workers compensation What about during illness or injury? • Silent, except as above

NT

Can LSL be cashed out? • No Can paid work be done whilst on LSL? • Cannot do paid work with duties similar to those usually performed. Can the employer require the employee to take LSL? • Yes, employer can give 2 month notice, after employee has LSL entitlement

NT

Is there an extra day of leave for a Public Holiday during LSL? • No, public holidays are not paid. What if the employee is re-employed? • If the worker was terminated by the employer or voluntarily resigned then re-employed within 2 months, the prior service must be recognised.

NT

Legislation • Long Service Leave Act 1976 (as of 2 Feb 2009) What is the accrual rate? • 1/5th of a month per completed year (6.0667 weeks) after 7 years • then 1/5th of a month per completed year • All service accrues at the current rate, prior accrual rates are completely over-ridden

ACT

Are casuals entitled to long service leave? • Yes, casuals have entitlement Can long service leave be taken before the entitlement date? • Silent Can any amount of LSL be taken or must the employee use specific amounts? • Silent

ACT

If employee terminates before entitlement date, is pro rata paid? • Paid for service between 5 & 7 years, for special reasons only. What are the special reasons? • When leaving because of – reaching minimum retirement age per award (or 65), illness, incapacity, death, “domestic or pressing necessity”, termination by employer (not for serious or wilful misconduct).

ACT

How do we pay LSL? • Pay at the current rate including allowances paid for skill & qualification, board & lodging and bonus/incentive. • If part-time or casual pay on the average hours over the last 12 months. • If full-time for not more than 2 years prior to taking leave, pay at the average salary/wages earned over the last 5 years.

ACT

How do we pay LSL? Cont’ • If paid wholly or partly by commission the rate is the average of all salary/wages & commission paid over the last 12 months. • On termination leave entitlement is calculated on completed years only, pro rata is calculated on years and completed months.

ACT

What stops LSL accruing? • Unpaid Parental Leave • Leave Without Pay • Any other leave granted by the employer (except annual, sick & LSL) will not accrue leave. What about during illness or injury? • Count 2 weeks in any year as service, for illness or injury (paid or unpaid). • Workers compensation does not count as service.

ACT

Can LSL be cashed out? • No Can paid work be done whilst on LSL? • Silent Can the employer require the employee to take LSL? • Yes, employer can give 60 days’ notice, after employee has LSL entitlement.

ACT

Is there an extra day of leave for a Public Holiday during LSL? • Yes, public holidays are paid in addition to LSL. What if the employee is re-employed? • If the worker was put off by the employer then re-employed within 2 months, the prior service must be recognised (except for seasonal work). • 6 months when stood down due to slackness of trade.

ACT

Legislation • Long Service Leave Act 1976 (as at 1 July 2012) What is the accrual rate? • 8⅔ weeks after 10 years (from 1 July 2012) • then 4⅓ weeks for each 5 years • previously 13 weeks for 20 years (up to 16 Dec 1964) • and 13 weeks for 15 years (up to 30 Jun 2012)

TAS

Are casuals entitled to long service leave? • Casuals have entitlement, but must work 32 hours or more in each 4 week period. Can long service leave be taken before the entitlement date? • Silent Can any amount of LSL be taken or must the employee use specific amounts? • LSL should be taken in one continuous period. However, the employer and employee can agree to have it taken in 2 separate periods.

TAS

If employee terminates before entitlement date, is pro rata paid? • Paid for service between 7 & 10 years, for special reasons only. What are the special reasons? • When leaving because of – illness, incapacity, death, retirement, “domestic or pressing necessity”, termination by employer (not for serious or wilful misconduct). - Retirement is 60 for women and 65 for men

TAS

How do we pay LSL? • Pay at ordinary rate immediately prior to going on leave, including shift penalties, board & lodging. • Or last 12 months if no fixed rate of pay and/or fixed hours of work. • Or average of last 3 months if paid by result. • On termination after 15 years, leave is calculated on completed years only

TAS

What stops LSL accruing? • Unpaid Parental Leave • Leave Without Pay What about during illness or injury? • illness or injury (paid or unpaid) – accrual continues Can LSL be cashed out? • Yes

TAS

Can paid work be done whilst on LSL? • Silent Can the employer require the employee to take LSL? • Silent. But if the date of taking leave cannot be agreed upon, the Secretary can direct that leave will be taken with 6 months’ notice.

TAS

Is there an extra day of leave for a Public Holiday during LSL? • Yes, public holidays are paid in addition to LSL. What if the employee is re-employed? • If the worker was terminated by the employer or voluntarily resigned then re-employed within 3 months, the prior service must be recognised. • 6 months when stood down due to slackness of trade.

TAS

Legislation • Long Service Leave Act 1958 (as of 10 Jun 2009) What is the accrual rate? • 8⅔ weeks after 10 years • then 4⅓ weeks for each 5 years • All service accrues at the current rate, prior accrual rates are completely over-ridden Are casuals entitled to long service leave? • Yes, casuals have entitlement

WA

Can long service leave be taken before the entitlement date? • Yes, LSL can be taken in advance of entitlement, if the employer and employee both agree. Can any amount of LSL be taken or must the employee use specific amounts? • LSL should be taken in one continuous period. However, the employer and employee can agree to have it taken in periods of not less than 1 week.

WA

If employee terminates before entitlement date, is pro rata paid? • Paid for service between 7 & 10 years. What are the special reasons? • When leaving because of – death or any reason (except for serious misconduct).

WA

How do we pay LSL? • Pay at ordinary rate immediately prior to going on leave NOT including shift penalties, allowances, overtime and the like. • If paid by piece work or any other system by result, including bonuses, pay at the average rate of the previous 12 months. • If hours of work have varied between full-time, part-time or casual, hours per week are the average hours over full service. • On termination after 10 years, leave is calculated on completed years only.

WA

What stops LSL accruing? • Unpaid Parental Leave • Leave Without Pay What about during illness or injury? • Count 15 days in any year as service, for illness or injury (paid or unpaid).

WA

Can LSL be cashed out? • Yes Can paid work be done whilst on LSL? • No (cannot do employment in substitution of the employment they are on leave from) Can the employer require the employee to take LSL? • Silent

WA

Is there an extra day of leave for a Public Holiday during LSL? • Yes, public holidays are paid in addition to LSL. What if the employee is re-employed? • If the worker was put off by the employer then re-employed within 2 months, the prior service must be recognised. • 6 months when stood down due to slackness of trade.

WA

So, what is “domestic or other pressing necessity”?

Some examples; • a pregnant employee leaving work to take on the

responsibility of "home duties" (Donnelly v South Maitland Railway Pty Ltd 1964 AILR 450)

• an employee forced to leave work to take care of a sick wife or take care of children (Franks v Kembla Equipment Co Pty Ltd 1969 AILR 55 ('Franks'))

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So, what is “domestic or other pressing necessity”?

Some examples; • changing jobs to lessen travel expenses when in difficult

financial situation (Crennan v Oliver Furniture Pty Ltd (1962) 17 IIB 799 ('Crennan'))

• the taking of a higher paid job to cope with increasing financial commitments (Eyles v Cook (1967) 13 FLR 42 ('Eyles'))

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So, what is “domestic or other pressing necessity”?

Some examples; • leaving a job because the night shift has become a strain on

the employee's family relationships and repeated requests for a transfer to the day shift had not been met (Williams v MacArthur Press (Sales) Pty Ltd 1990 AILR 137(14))

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So, what is “domestic or other pressing necessity”?

Some examples; • leaving employment because the employer was relocating

and the employee would have been required to drive two hours each way to and from work, and the employee was not prepared to move houses or to require her husband to change jobs (Kershaw v Electricity Commission of NSW 1991 AILR 91(7)).

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So, what is “domestic or other pressing necessity”?

The test in AWU v Sunshine Coast Private Hospital [2003] QIR Comm 241 ('Sunshine Coast') was to pose six questions; 1. Was the reason for the termination one which fell within the section? 2. Was the reason genuine and not simply a rationalisation of another reason which did not fall within the section; or a reason that while having the appearance of truth or right, is in reality a pretence or a deception; or a frivolous reason?

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So, what is “domestic or other pressing necessity”?

3. Although the reason claimed may not be the sole ground which caused the employee to make a decision to terminate his or her employment, was it the real or motivating reason? 4. Did the reason claimed cause the employee to terminate his or her employment?

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So, what is “domestic or other pressing necessity”?

5. Did the reason claimed affect the employee in relation to the particular service he or she terminated? 6. Was the situation which the employee was in at the point of the termination, one in which a reasonable person might have felt compelled to seek to resolve by terminating his or her employment?

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Presented to XYZ Company

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Thank you!