What is long service leave, and what do Australian employers need to know about it?

Long service leave is a period of paid leave that Australian employees are entitled to after a certain length of service with an employer. Here are some key things that Australian employers should know about long service leave:

What is the minimum length of service required for long service leave?

The minimum length of service required for long service leave varies between states and territories. In most states and territories, employees are entitled to long service leave after 10 years of continuous service, although there are some variations.

How much long service leave are employees entitled to?

The amount of long service leave that employees are entitled to also varies between states and territories. In most cases, employees are entitled to 8.67 weeks of leave after 10 years of service, although this can vary depending on the jurisdiction. Employers should check the relevant legislation to confirm the entitlements.

How should employers calculate long service leave entitlements?

Employers should calculate long service leave entitlements based on the employee’s length of service and their ordinary hours of work. Employers should also be aware of any applicable modern awards, enterprise agreements, or employment contracts that may contain additional entitlements or requirements.

Can employees take long service leave in advance?

In most cases, employees cannot take long service leave in advance unless there is a specific provision in the relevant state or territory legislation or the applicable industrial instrument. Employers should check the relevant legislation to confirm the requirements.

What happens to long service leave when an employee leaves their job?

When an employee leaves their job, they are usually entitled to a payment in lieu of any accrued but untaken long service leave. The payment should be calculated based on the employee’s ordinary pay rate at the time of their termination.

Can employers refuse a request for long service leave?

Employers can refuse a request for long service leave if they have a reasonable business reason for doing so. However, employers should consider each request on its merits and should not unreasonably refuse a request.

Are there any penalties for not providing long service leave entitlements?

Employers who fail to provide long service leave entitlements to their employees may be subject to penalties and legal action. Employers should ensure that they comply with the relevant state or territory legislation and any applicable industrial instruments.

Long Service Leave Entitlements for Each State and Territory in NSW

Each State and Territory has legislation providing for long service leave, although the amount of leave and the qualification for leave, either the taking of it or the payment in lieu of termination, differs between the jurisdictions.

The National Employment Standards (NES) have been drafted to preserve existing long service leave entitlements derived from various State jurisdictions, Awards and Agreements.

Some of the relevant entitlements under State and Territory legislation are summarised below.

Long Service Leave NSW Explained

Relevant Legislation: Long Service Leave Act 1955.

Entitlement to take long service leave: 8.67 weeks entitlement after 10 years continuous service.

Pro-rata entitlements on termination: After 5 years’ continuous service – only if terminated by employer for reasons excluding serious misconduct; or if resigning due to injury, ill health or domestic pressing necessity.

Additional Notes:

• Covers casual and permanent employees;
• Continuous service excludes unpaid leave;
• Entitlement paid at ordinary weekly wage averaged over the last 12 months or 5 years (whichever is greater).

Long Service Leave Victoria Explained
Relevant Legislation: Long Service Leave Act 2018.

Entitlement to take long service leave: After completing a minimum of 7 years continuous employment with one employer an employee is entitled to an amount of long service leave equal to 1/60th of the period of employment (approx. 6.1 weeks after 7 years).

Pro-rata entitlements on termination: Entitlements will only be paid if employment ends after 7 years of continuous employment. The employee is entitled to be paid out long service leave at the same rate as above regardless of the reason for termination.

Additional Notes:

• Covers casual, seasonal and permanent employees;
• Long service leave can be taken in periods of not less than one day at a time;
• Continuous employment will be broken where an employee’s employment ends (but there is an exception where the employee is subsequently re-employed within 12 weeks of that date, and in this instance continuous employment is not broken);
• Continuous employment will also generally be broken where a casual employee takes paid or unpaid parental leave exceeding 2 years;
• Long service leave accrued during any period of paid absence;
• Long service leave accrued during unpaid leave of up to 52 weeks, but only accrues during unpaid leave exceeding 52 weeks in certain circumstances;
• Entitlement paid at ordinary weekly wage averaged over the last 12 months or 5 years or the entire period of employment (whichever is greater).

Long Service Leave Queensland Explained
Relevant Legislation: Industrial Relations Act 2016.

Entitlement to take long service leave: 8.67 weeks entitlement after 10 years continuous service.

Pro-rata entitlements on termination: After 7 years’ continuous service – only if terminated by employer for reasons excluding serious misconduct; or if resigning due to injury, ill health or domestic pressing necessity.

Additional Notes:

• Cashing out of leave is allowed;
• Covers casual and permanent employees;
• Entitlement paid at ordinary weekly wage averaged over the last 12 months only.

Long Service Leave Western Australia Explained
Relevant Legislation: Long Service Leave 1958.

Entitlement to take long service leave: 8.67 weeks entitlement after 10 years continuous service.

Pro-rata entitlements on termination: After 7 years’ continuous service – termination on any grounds excluding serious misconduct.

Additional Notes:

• Cashing out of leave is only allowed for non-Award employees;
• Covers casual and permanent employees;
• Entitlement paid at the employee’s usual hours per week.

Long Service Leave South Australia Explained
Relevant Legislation: Long Service Leave Act 1987.

Entitlement to take long service leave: 13 weeks entitlement after 10 years continuous service.

Pro-rata entitlements on termination: After 7 years’ continuous service – termination on any grounds excluding serious misconduct. Pro-rata entitlement is paid at 1.3 weeks for each completed year of service.

Additional Notes:

• Cashing out of leave is allowed;
• Covers casual and permanent employees;
• Entitlement paid at average weekly hours over the last 3 years multiplied by the current hourly wage.

Long Service Leave Tasmania Explained
Relevant Legislation: Long Service Leave Act 1976.

Entitlement to take long service leave: 8.67 weeks entitlement after 10 years continuous service. Thereafter, an additional 4.34 weeks entitlement after each subsequent 5 years of continuous service.

Pro-rata entitlements on termination: After 7 years’ continuous service – only if terminated by employer for reasons excluding serious misconduct; or if resigning due to injury, ill health or domestic pressing necessity.

Additional Notes:

• Cashing out of leave is allowed;
• Covers casual and permanent employees who work at least 12 hours in each consecutive 4 week period;
• Entitlement paid at ordinary weekly wage averaged over the last 12 months only.

Long Service Leave Northern Territory Explained
Relevant Legislation: Long Service Leave Act 1981.

Entitlement to take long service leave: 13 weeks entitlement after 10 years continuous service.

Pro-rata entitlements on termination: After 7 years’ continuous service – only if terminated by employer for reasons excluding serious misconduct; or if resigning due to injury, ill health or domestic pressing necessity. After 10 years’ continuous service – termination on any grounds, however in cases of serious misconduct, entitlement paid on each completed 10 years only.

Additional Notes:

• Covers casual and permanent employees;
• Entitlement paid at ordinary weekly wage averaged over the last 12 months only.

Long Service Leave Australian Capital Territory Explained
Relevant Legislation: Long Service Leave Act 1976.

Entitlement to take long service leave: After 7 years continuous service – 1/5th of a month of leave for each year of service. Entitlement can be taken annually.

Pro-rata entitlements on termination: After 5 years’ continuous service – only if terminated by employer for reasons excluding serious misconduct; or if resigning due to injury, ill health or domestic pressing necessity.

Additional Notes:

• Covers casual and permanent employees;
• Entitlement paid at ordinary weekly wage averaged over the last 12 months only, however if an employee has converted from full-time to part-time or casual, then entitlement is paid at average hours worked per week over the last 5 years.

Cross Border Provisions

Should an employee work across multiple States and Territories throughout their continuous service with one employer, the entitlement to long service leave is derived from the statute operating in the State or Territory that the employee is working within at that particular point in time that they wish to use their entitlement to long service leave.

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Disclaimer

The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.