The new Long Service Leave Act 2018 (Vic) (the Act) commenced operation on 1 November 2018.
All employers with employees in Victoria need to be aware of the significant changes made by the Act.
Employees can now take leave after 7 years
Under the Act, employees are now entitled to take long service leave after 7 years’ continuous employment. Previously, it was 10 years.
The entitlement is calculated at 1/60th of the period of employment, i.e. the number of weeks of long service leave equals the number of weeks of employment divided by 60.
Changes to weekly hours
An employee is entitled to be paid their long service leave based on their ‘ordinary pay’, i.e. the actual pay received by the employee for working his or her normal weekly hours at the time the employee takes long service leave or ceases employment.
If an employee changes their weekly hours in the 2 years prior to taking long service leave or does not have fixed hours of work, the employee’s hours of work are averaged. Notably, the method used to calculate the average hours has changed.
Taking long service leave
The previous legislation restricted the period over which the leave could be taken. Under the new legislation, long service leave can be taken for any period of one day
or more.
Employers must grant the leave as soon as practicable, unless the employer has ‘reasonable business grounds’
for refusing the request for leave.
The new legislation maintains the rule that long service leave cannot be cashed out during employment. The only time it is paid out is at the end of employment.
Changes to how parental leave and other absences count
All forms of paid leave count towards an employee’s period of continuous employment for the purposes of long service leave.
For full-time and part-time employees, the first 52 weeks of unpaid parental leave counts towards the period of employment. In certain circumstances periods of unpaid parental leave exceeding 52 weeks will also count as employment.
Other provisions to note
- Transitional provisions will apply in a number of circumstances, for example, where an absence occurred while the previous legislation was
in operation. - Unpaid leave up to 52 weeks will count towards the period of employment for long service leave purposes and in some circumstances may count where it exceeds 52 weeks.
- Penalties exist for failure to keep proper records.
- If employment ends after 7 years, an employee’s entitlement must be paid out in full on their final
day of employment.
What do employers need to do?
- Update your leave policies and leave application forms to reflect the new provisions.
- Review your contracts of employment and update accordingly.
- If you rely on past advice on any aspect of long service leave in Victoria, have it reviewed to take into account the new provisions.
More information
For more information, or for advice regarding the changes to long service leave in Victoria, please contact a member of our Employment and Workplace Relations team on (03) 8600 8888.
Note: This update is a guide only and is not intended to constitute legal advice.