As of the 1st of November, the new Long Service Leave Act 2018 will come into operation in Victoria. The new Act replaces the previous Long Service Leave Act 1992 and will see significant changes to long service leave entitlements.
When announcing these changes, the Victorian Minister for Industrial Relations, Natalie Hutchins, highlighted the Act’s focus on updating parental leave provisions, stating: “the new LSL laws are a huge win for women, parents and carers across Victoria.”
The key changes to long service leave entitlements include:
- Employees can now take long service leave after seven years continuous service;
- Long service leave can now be taken in several periods, of at least one day at a time;
- Unpaid parental leave of up to 52 weeks will now count as service;
- There is added protection for employees who resign and are reinstated;
- Changes to how long service leave is calculated for employees with varying hours; and
- Changes to penalties under the Act.
We explain the changes in more detail below.
Employees can now take long service leave after seven years continuous service
Under the previous Act, employees were entitled to access long service leave after 10 years of continuous service. If employment ended after the employee completed 7 years of continuous service, they were entitled to a pro-rata payment equal to 1/60th of their period of continuous service.
As of 1 November, employees are now entitled to take long service leave after completing 7 years continuous service. Employees will be entitled to an amount of long service leave equal to 1/60th of the period of employment (approx. 6.1 weeks). No pro-rata payment will be available if employment ends before the employee completes 7 years of continuous service. If employment ends after 7 years of continuous service the employee is entitled to be paid out their long service leave regardless of the reason for employment ending.
Long service leave can now be taken in several periods, of at least one day at a time
Previously, long service leave entitlements could only be taken in one period, unless an alternative agreement was reached between the employer and the employee.
Under the new provisions, long service leave can be taken in periods of not less than one day at a time. The request for leave must be approved as soon as practicable and only refused on reasonable business grounds.
Unpaid parental leave of up to 52 weeks will now count as service
Under the 1992 Act, any period of unpaid parental leave was not counted towards an employee’s period of service. Under the new Act, any period of unpaid parental leave of up to 52 weeks, will count as service. Any period beyond 52 weeks will not be counted as service, but will not break the continuity of employment.
Added protection for employees who resign and are reinstated
Previously, for the purposes of calculating long service leave entitlements, service would only be considered continuous if employment ended at the initiative of the employer and the employee was subsequently re-engaged within 12 weeks of the dismissal. Under the 2018 Act, employment will be considered continuous if employment ends at the initiative of either the employer or the employee (i.e. resignation) and the employee is subsequently re-engaged within 12 weeks of the end of employment.
Changes to how long service leave is calculated for employees with varying hours
Under the previous Act, if an employee’s ordinary hours of work changed during the 12 months prior to accessing long service leave, entitlements would be calculated by averaging their weekly hours over the past 12 months or 5 years, whichever was higher. Under the new provisions, if an employee’s ordinary hours of work changed during the 2 years prior to accessing long service leave, entitlements are calculated by averaging the weekly hours worked over the past 12 months, 5 years or the entire period of continuous employment, whichever is higher.
Changes to penalties under the Act
Under the new Act, all civil penalties have been abolished and will be replaced by criminal penalties.
If you are an employer based in Victoria, or any other State or Territory, it is important to understand your obligations under the relevant long service leave provisions. For a summary of all State and Territory-based long service leave provisions, please refer to our long service leave knowledge base article. If you require further assistance, Employment Innovations have a number of industry experts who can assist you to understand your obligations. You can also access unlimited workplace advice as part of our subscription products.