From 1 November 2018, the new Long Service Leave Act 2018 (Vic) (Act) came into effect. There were a number of significant changes that came into operation, and it is important for employers to understand these changes and the impact that these changes have on their employees.
The Act may not apply to employees who are covered by a modern Award or individual or collective agreement that contains its own long service leave provisions.
While the amendments do not affect the rate at which long service leave is accrued, the changes will enable employees to take long service leave after 7 years of continuous employment with an employer. Long service leave is applicable to all employees, including casual employees.
Continuous employment is defined in section 12 of the Act. Essentially, an employee’s period of service will be continuous, unless broken by a period of unauthorised absence. If an employee’s employment is terminated at the initiative of the employer or employee, but re-employed within 12 weeks (unless the employee is an apprentice), this will not break the employee’s continuous employment.
| Then | Now |
|---|---|
| Employees access to long service leave after 10 years’ continuous employment. | Employees may take long service leave after 7 years’ continuous employment. |
| Upon agreement with employer, employees could take 13 weeks long service leave only in 2 or 3 separate periods. | Employees may take no less than one day long service leave and employer cannot unreasonably refuse the request. |
| Unpaid parental leave did not count towards an employee’s continuous service. | Unpaid parental leave of up to 52 weeks is included when calculating an employee’s continuous service. Any parental leave in excess of 52 weeks will not count towards continuous service, but does not break an employee’s continuity of employment. |
| Higher average of weekly hours were calculated on the basis of the previous 12 months or 5 years if the employee’s hours had changes in the past 12 months only. | If an employee’s hours of work have changed in the past 2 years prior to taking long service leave, the long service leave is calculated on the basis of the higher average weekly hours worked over the past 12 months or 5 years, whichever is the greater. |
| Employers, in some circumstances, were able to apply to seek exemption from complying with the provisions of the 1992 Act. | No ability for employer to seek exemption from application of the Act. |
| Civil penalties applied in circumstances where an employer fails to notify employee of removal or modification of their long service leave entitlements or terminates the employee’s employment due to exercising their workplace right to take long service leave. | For some offences, civil penalties have been replaced with criminal penalties for breaches. |
| Some offences under the Act attracted a civil penalty of 20 penalty units. | Employers who fail to pay employee’s accrued and unused long service leave upon termination of employment – civil penalty of 12 units for a natural person and 60 penalty units for body corporate. Penalties apply for each day the offence continues to be committed. A criminal conviction may also be recorded. NB: 1 penalty unit = $161.19 |
If you are unsure on the calculation of an employee’s long service leave, the Victorian government has a long service leave calculator available online. To access this calculator, click here.
Under the Act and Fair Work Act 2009 (Cth), employers have record keeping obligations which applies to employee records including payslips and timesheets (where applicable). These records are vital in calculating long service leave entitlements, amongst other employee entitlements.
It is important to update any company long service leave polices to align with the recent changes.
For further information and specialised legal advice, please contact our firm on (03) 9642 0435
