- Author:
- Wage Inspectorate
- Date:
- 19 Aug 2022
Disclaimer
The document does not constitute legal advice and should not be relied upon as legal advice. Should you have any concerns regarding the application of the material to your individual circumstances, you should seek your own independent legal advice.
The Wage Inspectorate endeavours to keep the information contained in this guide accurate and up to date. However, the Wage Inspectorate does not guarantee the accuracy, reliability or currency of this material, and disclaims all liability for any loss or damage caused directly or indirectly from or in connection with the use of or reliance upon the information contained in this guide.
Do not delay in contacting the Wage Inspectorate for information if your long service leave has not been paid. Strict time limits may apply, including limits on when regulatory action may be taken by the Wage Inspectorate.
Victorian Long Service Leave Act 2018
Long service leave is a long-standing entitlement for Australian employees that varies by State and Territory.
The Long Service Leave Act 2018 sets out the arrangements for long service leave in Victoria. This guide explains the entitlements and obligations of employees and employers under the Act.
The Act applies from 1 November 2018 and replaces the Long Service Leave Act 1992 (Vic) (1992 Act).
The arrangements for long service leave in other States and Territories are different. Each State and Territory has its own laws that deal with long service leave.
Sometimes, an employee may have been continuously employed by the one employer for more than seven years, however part of their employment has been undertaken outside Victoria. In these circumstances, their employer may not be liable to pay long service leave if there is not a sufficient connection to that external employment and the State of Victoria. In order for there to be a sufficient connection, continuous employment must be employment ‘in and of Victoria’, which may include:
- employment performed wholly in Victoria,
- employment pursuant to a direction coming from Victoria, or
- employment offered and accepted in Victoria but where an employee is seconded to work in offices outside of Victoria.
Continuing effect of certain leave or absences taken under the 1992 Act
While the Act applies from 1 November 2018, employees remain eligible for long service leave accrued under the 1992 Act. The Act also has rules (called ‘transitional provisions’) that preserve the operation of certain provisions in the 1992 Act in relation to continuous employment, and to what counts towards an employee’s period of employment for long service leave purposes. These transitional provisions mean that certain types of leave or absences from work taken prior to 1 November 2018 continue to affect continuity of employment and accrual of long service leave in the same way as they did when the 1992 Act applied. This guide refers to these transitional provisions where relevant.
Who is covered by the Act?
Most Victorian employees are covered by and entitled to long service leave in accordance with the Act, unless they derive their long service leave entitlement from another source. In short, almost all Victorian workers will have a right to long service leave, but that right may be under the Act, an enterprise agreement, a pre-modern award (explained later in this guide) or under some other workplace law (known collectively as ‘industrial instruments’).
Definitions of employee and employer for the purposes of this Act are covered later in this guide.
Additionally, the Act does not apply to:
- employees who are entitled to long service leave under another Victorian Act, to the extent of any inconsistency; or
- workers covered by the Construction Industry Long Service Leave Act 1997 (Vic).
There are also specific arrangements for portable long service for some industries under the Long Service Benefits Portability Act 2018 (Vic), which commenced in 2019. If you work in the contract cleaning, security or community services industries, you may have a portable long service leave entitlement. More information about the Portable Long Service Leave Scheme can be found from the Portable Long Service Authority.
Who is an employee?
The Act provides 'employees’ with an entitlement to long service leave. An employee is defined by the Act to include a person employed by an employer to do any work for hire or reward. It includes an apprentice and any person, such as a trainee, whose oral or written contract of employment requires them to learn or be taught an occupation.
Full time, part time, casual and seasonal employees, and employees under certain fixed-term arrangements, all accrue long service leave.
An employee may have a more generous entitlement under a common law employment contract than under the Act. However, where a contract contains long service leave entitlements that are not more generous than those under the Act, then the Act will nonetheless apply. In addition, an employer cannot lawfully use a contract, agreement or deed of any kind to avoid their obligation to pay the full amount of long service leave owed to an employee. For further information, please contact the Wage Inspectorate on 1800 287 287.
Genuine independent contractors are not employees and are generally ineligible for long service leave under the Act. However, whether a person is truly an independent contractor or employee needs to be assessed on a case-by-case basis. You can seek assistance in assessing whether a person is a genuine independent contractor or an employee from the Fair Work Ombudsman.
Outworkers in the clothing industry are deemed, by the Outworkers (Improved Protection) Act 2003 (Vic), to be employees for the purposes of the Act and are therefore entitled to long service leave in accordance with the Act.
Example one
Janika is offered and accepts a job as a retail salesperson. On the day Janika starts at the business, she signs a contract of employment which has a clause stating she won’t be entitled to long service leave if her employment ends before she has completed ten years’ service.
Janika resigns from her employment after eight years and asks her employer to pay her seven weeks’ long service leave. However, her employer points out that she signed a contract which stated she was not entitled to long service leave if employment ends before she has completed ten years’ service.
Despite the wording of her contract of employment, Janika is entitled to payment in respect of seven weeks’ long service leave on the day her employment ends. This is because long service leave terms in a contract that provide for a lesser entitlement (i.e. less favourable) than under the Act, and which purport to annul or vary or exclude any provision of the Act, are invalid. In these circumstances, the Act will still apply, even if an employee signed the contract. In this example, Janika’s employer is obliged to pay Janika her long service leave entitlement and Janika can still enforce her legal right to recover non-payment.
Example two
Esther’s employment ends after ten years, and they have accrued 8.7 weeks of long service leave.
Esther and their employer become involved in a dispute over Esther’s long service leave entitlement, and they are offered a settlement by their employer equivalent to six weeks’ pay.
Despite any settlement agreement, based on a ten-year employment period, Esther remains entitled to payment in respect of the full 8.7 weeks of long service leave in accordance with the Act, and they retain the right to recover the underpayment even if they have signed the settlement agreement.
Interaction between state and federal long service leave laws: which law applies?
It is important for employees and employers to check if an employee’s employment is covered by another Act, or a pre-modern award or enterprise agreement, and whether that Act, award or agreement provides for an entitlement to long service leave.
You can seek help with this enquiry from the Fair Work Ombudsman.
Modern awards (governed by the FW Act) made from 1 January 2010 cannot include long service leave terms.
In some instances, an enterprise agreement may provide for long service leave entitlements that refer to and/or align with the Act. In others, they may be different from the entitlements under the Act. Importantly though, where an enterprise agreement or other fair work instrument provides for long service leave terms that are more favourable than those under the Act, an employee will be entitled to long service leave in accordance with the enterprise agreement, and the Act will not apply to the extent of any inconsistency. However, terms of a fair work instrument that are less favourable than the Act may be invalid, and the Act may apply instead.
It is important to know which industrial instrument provides an employee’s entitlement to long service leave, as this may affect the timing of when the leave becomes available, the rate of accrual, and whether a state or federal agency is responsible for ensuring compliance with that long service leave law.
The Long Service Leave Act and pre-modern awards
The FW Act preserves some old awards for the purposes of long service leave, which means that an employee may be entitled to long service leave under one of those awards instead of the Act. These ‘pre-modern’ awards are old awards that applied immediately before 1 January 2010. An employee may have an entitlement to long service leave under a pre-modern award if the employer is bound to the award, and it covers the work of the employee and entitles the employee to long service leave. These awards continue to apply in this way (subject to certain rules) in a range of industries, including to some employers in the automotive, horticultural and pastoral industries.
If the relevant award or enterprise agreement is silent on long service leave, the Act will usually apply by default.
Accrual of long service leave
Under the Act, long service leave accrues progressively at a rate of one week for every 60 weeks of continuous employment with one employer, that is approximately 0.866 of a week per year.
Casual, seasonal and specified term employees
Casual and seasonal employees, and employees engaged for a specified term, are entitled to long service leave under the Act. Their employment must still be ‘continuous’ under the Act.
The rules for casual and seasonal employees mean that employment will be deemed continuous providing there is no absence of more than 12 weeks between any two instances of employment. A casual or seasonal employee’s employment will also remain continuous for long service leave purposes, despite an absence from work exceeding 12 weeks, if:
- the employee and the employer so agree before the start of the absence
- the absence is in accordance with the terms of the engagement
- the absence is caused by seasonal factors
- the employee has been employed by the employer on a regular and systematic basis and has a reasonable expectation of being re-engaged by the employer
- the absence is due to the employee taking up to 104 weeks’ paid or unpaid parental leave.
Paid or unpaid absences of any duration because of illness or injury will also not break continuous employment.
The casual hourly rate does not include an amount to cover long service leave. A casual hourly rate cannot be loaded to compensate for non-payment of long service leave. In most cases, it is also unlawful to cash out an employee’s long service leave entitlement instead of allowing the employee to access the leave as a break from work, though some exceptions apply such as where the employment has ended.
Specified term employees
The Act provides that where employment terminates because of the expiration of a specified term (known commonly as ‘fixed term’) of an employment contract, but the employee is re-employed within 12 weeks, employment will be deemed continuous for the purposes of long service leave.
Example one – Casual or seasonal employee and employer agree
Paul is a casual zoology tutor at a Victorian university. He has been employed by the same university for 13 years.
Paul and the university have an agreement that Paul does not teach between November and March, due to the university non-teaching period. Paul therefore has a four-month break from work each year. However, this is in accordance with his employment agreement and his employment is therefore deemed to be continuous.
Paul is eligible for long service leave despite the absences of more than 12 weeks between instances of employment every year. This is because Paul and his employer have agreed that his employment continues despite the regular absences of more than 12 weeks.
Example two – Seasonal employment
Russell works on a seasonal basis at Ruth’s Plant Nursery. Russell has worked at the nursery for eight years.
Russell does not work in the coldest winter months when there is a dormant period for the plants. During his employment at Ruth’s, these non-working periods have ranged from five weeks to a few months each year. On at least three occasions, the winter break has lasted for more than three months. However, Russell’s regular work always recommences after the winter shutdown.
Russell is eligible for long service leave because his absences are caused by seasonal factors.
Example three – Regular and systematic casual employment
Leo works as a casual employee at his local supermarket. He is regularly rostered to work
Mondays in accordance with a rostering system established in consultation with his employer, and has done so for the last two years.
Leo’s mother unfortunately falls ill, and Leo must take four months off work. He tells his employer this, and his employer assures him they will make shifts available to him again once he is able to return. Leo then returns to work four months later when his mother is feeling better.
Although there is no explicit agreement that his employment will not be broken for the purposes of long service leave, his service will be deemed continuous under the Act. This is because Leo’s work is regular and systematic, and he has a reasonable expectation of being re-engaged following the absence.
Example four – Casual or seasonal employee takes unpaid parental leave
Ashanti works as a casual ski instructor during each Victorian ski season. Ashanti has worked every ski season for the past six years.
Ashanti takes an initial period of 52 weeks’ unpaid parental leave. Before the end of the initial 52 weeks’ unpaid parental leave, Ashanti applies to extend her period of leave by a further 52 weeks – making a combined total of 104 weeks’ unpaid parental leave. Ashanti returns to work at the start of the next ski season after her 104 weeks’ unpaid parental leave.
In this example, Ashanti’s period of unpaid parental leave does not break her continuous employment for long service leave purposes under the Act. Additionally, any further period beyond 104 weeks’ unpaid parental leave that elapsed before Ashanti could return to work also won’t break her continuous employment if the further absence was caused by seasonal factors.
Example five – Specified-term employment
Karina works at an accountant’s business in the city. Karina has been employed at her job for eight years. Karina is currently employed on an ongoing basis, but for the first three years she was employed on a series of 12-month fixed-term contracts. Karina was re-employed at the end of each fixed-term contract. On the first two occasions, the new employment contract commenced immediately after the expiration of the previous fixed term. However, on the last occasion there was a break of four weeks between the expiration of Karina’s third fixed-term contract and the commencement of her ongoing employment.
Despite Karina being employed under a total of four separate employment contracts, the first three being fixed-term engagements, her entire period of employment under each successive period of employment, and any gap between them, is deemed continuous under the Act. This is because on each occasion Karina was re-employed within 12 weeks.
Paid absence from work
All periods of paid leave count towards the period of continuous employment for long service leave purposes. Examples include annual leave, personal/carer’s leave, and long service leave itself.
Unpaid absence from work
Any period of up to 52 weeks’ unpaid leave (including unpaid parental leave) counts towards an employee’s period of continuous employment and does not break continuous employment. Where a longer period of unpaid leave is taken, only the first 52 weeks is taken to be included in the period of employment unless:
- the absence is taken to be a period of employment under an employment agreement or fair work instrument
- the employer and employee agree in writing before the leave is taken that the period is taken to be a period of employment
- the leave is taken on account of illness or injury
- the leave is otherwise provided for under an employment agreement or fair work instrument.
Absence on sick leave or WorkCover
Under the Act, any paid or unpaid absence from work because of illness or injury occurring on and from the commencement of the Act on 1 November 2018 counts towards the period of continuous employment for long service leave purposes. Unpaid leave due to illness or injury includes a WorkCover absence.
Where the unpaid absence because of illness or injury occurred before the commencement of the Act, only 48 weeks’ unpaid absence for that reason in any year counts towards the period of employment, as it occurred under the previous 1992 Act.
The tables below identify common absences from work or interruptions to employment, state their effect on continuous employment and what counts towards the period of continuous employment for long service leave purposes. The absences identified are not an exhaustive list of all circumstances that may affect long service leave.
The tables separately address each absence and interruption identified by reference to both the Act (from 1 November 2018) and the 1992 Act (as it previously applied).
Tables: how common absences affect continuous employment
| Does count towards the period of employment | Does not count towards the period of employment |
|---|---|
| Paid leave | Unpaid leave exceeding 52 weeks unless the leave is provided for under the relevant employment contract or fair work instrument or is on account of illness or injury |
| Unpaid leave (including unpaid parental leave) up to 52 weeks, or longer if the leave is provided for under the relevant employment contract or fair work instrument | Where an employee’s employment ends, and the employee is re-employed within 12 weeks, the period during which the employee was not employed |
| Leave on account of illness or injury |
| Does count towards the period of employment | Does not count towards the period of employment |
|---|---|
| The taking of any annual leave or long service leave | Unpaid parental leave |
| Any other paid or unpaid absence from work approved by the employer, including personal/carer’s leave but not including adoption, maternity or paternity leave | Where an employee is dismissed at the employer’s initiative and the employee is re-employed within three months, the intervening period |
| Any absence from work of not more than 48 weeks in any year on account of illness or injury | Any absence from work exceeding 48 weeks in any year on account of illness or injury |
Taking long service leave
After at least seven years’ continuous employment with one employer, an employee is entitled to:
- take their accrued long service leave
- be paid out any accrued but unused long service leave if their employment ends.
Example
Jenny has worked at a chemist for eight years and six weeks.
Jenny wants to renovate her house but doesn’t have the time. A friend of Jenny tells her she might be entitled to take long service leave because she has more than seven years’ employment at the chemist.
Jenny asks her employer if she is entitled to take long service leave. Jenny’s employer calculates the amount of long service leave she can take as follows:
8 years multiplied by 52 weeks = 416 weeks.
416 weeks + 6 weeks = 422 weeks.
422 weeks divided by 60 = 7 weeks.
Jenny is entitled to take up to seven weeks’ long service leave to renovate her house.
Requesting long service leave
An employee can request to take long service leave at any time after becoming entitled to take the leave. Leave can be taken for any period of not less than one day at a time.
If an employee makes a request to take long service leave, the employer must grant the leave as soon as practicable unless the employer has reasonable business grounds for refusing the request. The ‘Definitions’ in section 3 of the Act provide some guidance on what is included in the meaning of ‘reasonable business grounds’.
Example
Rui is nearing retirement and has never taken long service leave. As a result, he has 26 weeks’ accrued long service leave.
Rui could wait until he retires and receive a payment for the accrued long service leave, but he would like to ease into retirement by working a four-day week for 12 months. His employer likes this idea, as it will reduce the long service leave payment to Rui when he reaches retirement. They agree to make this arrangement.
The Act allows leave to be taken in one-day periods. In this example, Rui can work a four-day week for the last year of his employment, without loss of pay or reduction in superannuation if he takes one day of long service leave each week. The balance of his leave will then be paid out once his employment ends.
Can long service leave be taken in advance?
Yes. An employer may agree to an employee taking long service leave before the employee becomes entitled to the leave. However, there is no requirement for an employer to agree to this. If the employment then ends before the employee accrues that long service leave, the employer may deduct from any monies payable to the employee as a result of the termination, an amount equal to the amount paid to the employee for the long service leave taken in advance.
Can an employer direct an employee to take long service leave?
Yes. An employer may direct an employee to take long service leave by giving at least 12 weeks’ written notice. If the employee does not want to take their leave as directed by the employer, they can apply to the Industrial Division of the Magistrates’ Court for an order that they are not required to do so.
Can an employee take leave at half pay?
Yes. An employer may agree to an employee taking a period of long service leave at half pay. For example, an employee with 13 weeks’ accrued long service leave could take 26 weeks’ long service leave at half pay. An employer must grant the request unless they have reasonable business grounds for refusing the request.
Note that taking half the leave at double pay is not permitted, as this is in breach of the Act’s prohibition on ‘cashing out’ long service leave.
The online calculator can assist with checking when an employee becomes entitled to take long service leave, and the amount of long service leave that an employee has accrued.
What if employment ends before all leave is taken?
Resignation, redundancy, termination, death
On the day that employment ends, an employee with at least seven years’ continuous employment with one employer is deemed to have started to take long service leave on that day, and is entitled to receive payment for the full amount of their accrued but untaken long service leave entitlement. This will apply whether the employee has resigned, has had their employment terminated by the employer, has been made redundant, or has died. In the event of death, payment must be made to the employee’s personal representative. Where employment ends before the employee has completed seven years’ continuous employment with one employer, the employee is not entitled to any payment in respect of long service leave.
It is an offence for an employer not to pay an employee the full amount of the employee’s accrued but unused long service leave entitlement on the day the employment ends. The penalty for this offence is 12 penalty units for a natural person and 60 penalty units for a body corporate. These penalties apply for each day that the offence continues. If an employer is found guilty of this offence, a criminal conviction may also be recorded.
It is important to note that, in most circumstances, payment in lieu of long service leave is prohibited (where employment is ongoing), as this is in breach of the Act’s prohibition against ‘cashing out’ long service leave.
Example one
Jacqui resigns from her employment and, following completion of her notice period, her employment ends after seven years and six months’ continuous employment. Jacqui’s long service leave entitlement is calculated as follows:
Seven years multiplied by 52 weeks = 364 weeks. Six months = 26 weeks.
364 weeks plus 26 weeks = 390 weeks in total.
We then divide the total weeks by 60, as Jacqui will receive one week of long service leave for each 60 weeks’ continuous employment. 390 weeks divided by 60 equals 6.5 weeks.
Jacqui is therefore entitled to payment in respect of 6.5 weeks of long service leave on the day her employment ends.
Example two
Marcus resigns from his employment, offering one month’s notice, but his employer elects to pay him in lieu of notice so that his employment ends on the day on which he resigns. Marcus’ employment ends after six years and eleven months. As Marcus has not reached seven years’ continuous employment by the last day of his employment, he has no entitlement to a payment in respect of accrued long service leave. If, however, Marcus had worked out his period of notice, he would have completed seven years’ continuous employment, and would therefore have been entitled to a payment in respect of long service leave once his employment ended.
Example three
Jayne is retiring after 22 years. After eight years of employment, Jayne took six weeks of long service leave to visit her daughter in Canada. Jayne’s long service leave is calculated as follows:
22 years multiplied by 52 weeks = 1,144 weeks in total.
We then divide 1,144 weeks by 60. 1,144 divided by 60 = 19.1 weeks.
We then deduct the 6 weeks’ long service leave already taken to calculate Jayne’s final entitlement. 19.1 minus 6 = 13.1 weeks.
Jayne is entitled to a payment in respect of 13.1 weeks of long service leave on the day her employment ends.
Can long service leave be ‘cashed out’?
No. In most circumstances, it is an offence under the Act to give or receive payment for long service leave instead of the employee taking the break from work. Both an employee and an employer can be liable for this offence. If an employee or employer is found guilty of this offence, a criminal conviction may be recorded.
An employee can only receive payment in respect of any unused long service leave if their employment ends before the leave is taken, or as otherwise provided for in certain fair work instruments.
Can an employee on long service leave be employed during the period of long service leave?
It is an offence to work while on long service leave or to employ someone who is on long service leave.
However, where an employee has more than one job (for example, two part-time jobs), the situation may differ. If an employee takes long service leave from one of their part-time jobs (Job A), they may continue to work in the other part time job (Job B). This is because the restriction on working while on long service leave only applies in relation to those hours during which the employee is taking long service leave. So while on long service leave from Job A, the employee must not work at Job B during the hours they would normally work at Job A.
Example
Cam has two part-time jobs, one at a local newsagent with Local Newsagent Pty Ltd, and one as a bar attendant with Local Hotel Pty Ltd. He works with Local Newsagent Pty Ltd on Mondays, Tuesdays and Wednesdays, and with Local Hotel Pty Ltd on Fridays and Saturdays.
Cam is presently taking long service leave from his work with Local Newsagent Pty Ltd.
While on long service leave from his work with Local Newsagent Pty Ltd, Cam can continue working for Local Hotel Pty Ltd on Fridays and Saturdays.
However, Cam cannot work for Local Hotel Pty Ltd on Mondays, Tuesdays or Wednesdays. This is because that is when he would normally work for Local Newsagent Pty Ltd, which is currently paying him long service leave so that he can take a break from work in relation to those hours.
Can an employee claim long service leave entitlements if the company is liquidated?
If a company is liquidated, it is essential to contact the liquidator urgently to make an application to the liquidator to be paid from the available assets as a creditor of the business.
If the assets are insufficient to meet an employee’s long service leave entitlement, the Fair Entitlements Guarantee scheme may be available.
The Fair Entitlements Guarantee (FEG) is a federal government scheme which provides for the payment of certain entitlements of eligible employees whose employment has been terminated because of their employer’s liquidation or bankruptcy. Eligible FEG claimants may be entitled to a FEG advance, subject to certain caps, for unpaid wages, annual leave, long service leave, payment in lieu of notice and redundancy pay if applicable.
Contact the FEG for full details of the scheme on 1300 135 040 or visit the FEG website.
Continuous employment with 'one employer'
The Act requires an employee to have continuous employment with one employer to become entitled to long service leave (a more detailed explanation of the special meaning of ‘continuous employment’ is contained elsewhere in this guide).
The Act sets out several situations where an employee is regarded as having been employed by one employer, even though in the strict legal sense they may have worked for more than one employer, as summarised below.
When a business changes hands
If the ownership of a business employing an employee changes, but the employment of the employee continues, then the employee is taken to have started employment with the new owner on the date on which they started employment at that business.
This means that where a business is sold, transferred or assigned and an employee remains with the business, the new employer becomes responsible for the employee’s long service leave entitlement. The period of employment with the old employer effectively transfers to the new employer, who becomes liable for the employee’s long service leave entitlement in respect of the employee’s entire period of employment at that business.
Similarly, if an employee is dismissed by the old business owner but is employed by the new business owner within 12 weeks after their dismissal to do work which is the same (or substantially the same) as the work the employee did for the old owner, employment is deemed continuous for the purposes of long service leave accrual under the Act.
It is common for the sale of business documents to reflect this liability, but such documents cannot lawfully exclude an employee’s entitlement. Even if the contract for the sale of business does not deal with a transferring employee’s long service leave, the employee still has an entitlement under the Act that the new employer must recognise.
It is also common for the parties to a sale of business to factor long service leave liabilities into the purchase price, or for an amount of money to be put into trust for the employee’s benefit to cover the amount of long service leave the employee accrued during their employment with the old employer. However, any agreement between the seller and purchaser has no bearing on an employee’s entitlement under the Act.
When assets are transferred
If an employee performs work in connection with any assets used in the carrying on of a business, and those assets are transferred, employment will remain continuous if the new owner of the assets continues the employee’s employment.
Employment will also be deemed continuous in relation to the transfer of assets where an employee is dismissed by the old owner of the assets but commences with the new owner of the assets within 12 weeks of the dismissal.
Assets are defined in the Act to include tangible and intangible assets.
Example one
Michael works as a graphic designer.
The company he works for has no physical office, and he works from home. The company becomes insolvent and is liquidated. The liquidated company’s online domain name (which has positive online branding recognition), is sold to another business. The new business employs Michael, and he commences work on the day following the transfer of the domain name.
The Act defines assets to include intangible assets, and in this example, the positive branding recognition associated with the online domain name satisfies this definition.
Michael will be entitled to have his prior period of employment recognised, and his employment will remain continuous for the purposes of long service leave accrual under the Act.
Example two
Lativa has been continuously employed by Nadia of Nadia’s Vegan Confectionery Factory for nine years. She works with the chocolate making equipment.
Nadia’s Vegan Confectionery Factory closes down, but the chocolate making equipment is sold to Jackie. Jackie runs her business as Jackie’s Chocolate Factory. Lativa obtains a job working with Jackie’s Chocolate Factory, working with the same chocolate making equipment she used when working for Nadia’s Vegan Confectionery Factory.
In this situation, Lativa’s employment is continuous. Jackie becomes liable for Lativa’s accrued long service leave.
When work is performed for a related employer
Where an employee has worked first with one employer and subsequently works with a related body corporate, or a corporation with substantially the same directors and/or management, then the employee is taken to have been employed by latter employer during any period that they were employed by the former employer; the two employers are treated as one. In such circumstances, the latter employer will assume liability for the employee’s long service leave entitlement from the time when the employee first commenced with the previous employer(s).
Insourcing and outsourcing
If an employer enters into a contract with another person, like an agency or contractor, to outsource work to that person, and as a result an employee ceases employment with that employer and commences employment with the contracted person, the employee is taken to have commenced employment with the contracted person on the day on which they had commenced employment with the previous employer.
Where work is contracted in and out over a period the same rule applies- there must be a contract in place between the host and the agency relating to the movement of the employee’s employment.
Example
Leanne is employed in IT for an accounting company, Accounting Co Ltd. Accounting Co Ltd decides to outsource the IT work performed by Leanne. After a brief tender process, Accounting Co Ltd enters into a contract with IT Contractors Pty Ltd for the IT work.
As a result, Leanne continues to work at the offices of Accounting Co Ltd and to perform the same work, but is now employed by IT Contractors Pty Ltd.
Even though Leanne has worked for two different employers during the course of her employment, she will be entitled to long service leave as if she were employed by only one employer.
Apprentices/trainees?
If an employer re-employs a person who was formerly the employer’s apprentice within 52 weeks after completion of the employee’s apprenticeship, then the period of their apprenticeship counts towards the period of employment with that employer.
How leave affects continuity of employment
Certain periods of leave and/or absences from work can impact both the continuity of employment and the period of continuous employment for the purposes of assessing the accrual of long service leave. Certain absences do not break continuous employment under the Act, while others do. Similarly, certain absences count towards the period of continuous employment for long service leave purposes, while others do not.
There are therefore two key questions that can usefully guide an assessment of a person’s entitlement to long service leave under the Act, as follows:
- Has an employee taken any leave or absences of a type that breaks their period of continuous employment?
- Does any period of leave or absence from work count towards the employee’s period of continuous employment for the purposes of the accrual of long service leave?
Absences that will not break continuous employment
For an employee to become entitled to long service leave, their employment with the employer must be continuous. However, some periods of leave and absences from work do not break continuous employment for long service leave purposes.
Illness or injury
Any paid or unpaid absence from work for any duration because of illness or injury (including WorkCover absences) will not break continuous employment.
Paid or unpaid leave
Annual leave, paid or unpaid parental leave for full-time or part-time employees (or up to 104 weeks’ paid or unpaid parental leave for seasonal or casual employees), or long service leave itself, will not break continuous employment. Any other form of leave provided for under an oral or written employment agreement or fair work instrument will also not break continuous employment.
Interruptions - termination and re-employment
If there is a gap in employment caused by either the employee or employer terminating the employment, but the employee is re-employed within 12 weeks, then employment will remain unbroken and continuous for the purposes of long service leave.
Similarly, where an employee’s employment ends because of the expiration of a specified term in their employment contract, but they are re-employed within 12 weeks of the expiration of that term, continuous employment is not broken.
Example one
Alex works in a factory that manufactures building products.
The factory purchases new equipment. As a result, Alex and two other workers are made redundant. However, there are problems with the new equipment and so the factory reinstates its previous work practices. Because of the problems with the new equipment, ten weeks after being made redundant, Alex is offered his old job back. Alex accepts the job offer and returns to work the following week.
Because the gap in employment was less than 12 weeks, Alex’s employment is deemed continuous for the purposes of long service leave.
Example two
Naj works as a bartender at his local pub.
Naj resigns from his employment to take up a job at a café nearby. Unfortunately, after eight weeks the café owner decides to close her business. Naj approaches the local pub to see if he can have his old job back. The publican agrees and Naj re-commences work the following day.
Because the break in employment was less than 12 weeks, Naj’s employment is deemed continuous for the purposes of long service leave.
Other interruptions – casuals
For casual employees, continuous employment remains unbroken in a range of circumstances. This topic is discussed in detail elsewhere in this guide. For more information about casual and seasonal employees and continuous employment under the Act, contact the Wage Inspectorate on 1800 287 287.
Transfer of assets
If an employee is absent from work solely because assets have been transferred from one employer to another, and the employee usually performs duties in connection with those assets, then continuous employment will not be broken for the purposes of long service leave. This is provided the gap between the first employer dismissing the employee and the new employer employing the employee is no longer than 12 weeks.
In certain circumstances, if an employee is stood down because of a lack of work, machinery breakdown, or during industrial action, their employment will remain unbroken for long service leave purposes.
Example one
Alex works in a factory that manufactures building products.
The factory purchases new equipment. As a result, Alex and two other workers are made redundant. However, there are problems with the new equipment and so the factory reinstates its previous work practices. Because of the problems with the new equipment, ten weeks after being made redundant, Alex is offered his old job back. Alex accepts the job offer and returns to work the following week.
Because the gap in employment was less than 12 weeks, Alex’s employment is deemed continuous for the purposes of long service leave.
Example two
Naj works as a bartender at his local pub.
Naj resigns from his employment to take up a job at a café nearby. Unfortunately, after eight weeks the café owner decides to close her business.
Naj approaches the local pub to see if he can have his old job back. The publican agrees and Naj re-commences work the following day.
Because the break in employment was less than 12 weeks, Naj’s employment is deemed continuous for the purposes of long service leave.
Parental leave, accrual and continuous employment
No amount of paid or unpaid parental leave will break continuous employment for long service leave purposes.
Unpaid parental leave up to 52 weeks will count towards accrual of Long Service Leave, and leave exceeding 52 weeks will also count if the employment contract or fair work instrument provides for this, or by agreement in writing between the employer and employee.
The Act’s transitional provisions mean that certain types of absence from work that occurred before 1 November 2018 will continue to not count towards the period of continuous employment for the purposes of long service leave purposes.
If the Act commenced during an employee’s absence on unpaid parental leave, only that part of the period of unpaid absence occurring on and from 1 November 2018 counts towards the employee’s period of employment for the purposes of long service leave
Example
Lola commences 52 weeks of unpaid parental leave 26 weeks before the commencement of the Act on 1 November 2018.
When calculating her entitlement to long service leave, the last 26 weeks of Lola’s unpaid parental leave will count towards the period of continuous employment because the leave occurred under the Act, but the first 26 weeks will not count because it occurred under the previous 1992 Act.
Transitional rules and continuous employment
Under the 1992 Act, the types of unpaid absences from work that would break continuous employment, and which unpaid absences would count towards the period of employment, were not always the same as they now are under the Act. However, the Act preserves these rules (called ‘transitional provisions’) where the absence in question occurred before 1 November 2018.
Tables: effect of absences/leave on long service leave
| Does not break continuous employment | Does break continuous employment |
|---|---|
| Annual leave | In the case of a casual or seasonal employee, paid or unpaid parental leave exceeding 104 weeks (note: a longer absence may not break a casual or seasonal employee’s continuous employment in certain circumstances) |
| Long service leave | Termination of employment at the initiative of the employer or the employee if the employee is not re-employed within 12 weeks |
| Absence from work because of illness or injury | |
| Personal/carer’s leave | |
| Paid or unpaid parental leave for permanent employees | |
| In the case of a casual or seasonal employee, paid or unpaid parental leave up to 104 weeks (note: a longer absence may not break the continuous employment of a casual or seasonal employee in certain circumstances) | |
| Termination of employment at the initiative of the employer or the employee if the employee is re-employed within 12 weeks | |
| Any other form of paid or unpaid leave provided for under the relevant employment agreement or fair work instrument |
| Does not break continuous employment | Does break continuous employment |
|---|---|
| Annual leave | Termination of employment at the initiative of the employee |
| Long service leave | The dismissal of an employee where the employee is not re-employed within three months |
| Absence from work because of illness or injury | Parental leave exceeding 12 months unless otherwise specified in the relevant employment contract or federal instrument, or provided for under the National Employment Standards |
| Personal/carer’s leave | |
| Any other leave approved by the employer, excluding parental leave | |
| Parental leave up to 12 months or any other period specified in the relevant employment contract or federal instrument, or provided for under the National Employment Standards | |
| The dismissal of an employee if the employee is re-employed within three months of the dismissal |
Calculating long service leave
The calculation is the total number of weeks of employment divided by 60 and multiplied by the ordinary weekly rate of pay for the employee’s normal weekly hours at the time the leave is taken or that employment ends.
Example
Lissa has worked continuously for 11 years; she wants some work-life balance and decides to resign from her employment. Lissa’s long service leave entitlement is calculated as follows:
11 years multiplied by 52 weeks = 572 weeks.
We then need to divide the total weeks by 60, as Lissa will receive
one week of long service leave for each 60 weeks of service. 572 weeks divided by 60 = 9.53 weeks.
At the time of resignation, Lissa’s ordinary pay is $1,100.00 per week gross.
9.53 weeks multiplied by $1,100.00 per week is $10,483.00 gross.
Lissa is therefore entitled to a payment of $10,483.00 (gross and subject to statutory taxation) on the day her employment ends.
How is ordinary pay calculated?
Ordinary pay is the actual pay received by an employee for working their normal weekly hours at the time the employee takes long service leave or ceases employment and has long service leave paid out.
Ordinary pay has a special meaning under the Act and depends on how an employee’s wages or salary are earned. It does not normally include allowances, penalty or occasional overtime rates that are paid on top of an employee’s ordinary time rate of pay, but is the actual ordinary time rate received. However, one of the key exceptions to this is that a casual employee’s ordinary rate includes the casual loading. Ordinary pay also includes the cash value of any board or lodging that the employee receives from the employer.
How is long service leave calculated if the employee’s hours vary from week to week?
An employee’s long service leave entitlement is based on his or her normal weekly hours at the time the leave is taken, or on the day employment ends. However, in some cases, an employee’s hours may vary from week to week. This occurs particularly for casual employees.
Where an employee’s hours vary from week to week, the employee’s normal hours for calculating their long service leave entitlement are taken to be the greatest of the average weekly hours (occurring immediately before the long service leave commences) over either the preceding 52 weeks, 260 weeks, or the entire period of continuous employment. When calculating the average weekly hours, unpaid leave is excluded. The Act contains helpful formulae to calculate ordinary pay in these circumstances.
The following process flowchart shows the steps to take when applying the averaging rules under the Act. You can use this flowchart to work out the average weekly number of hours and then ordinary pay for workers who do not have fixed hours of work. The formulae are set out in a table below the flowchart.
| Period of continuous employment | 52 weeks | 260 weeks | Entire period of continuous employment |
|---|---|---|---|
| Formula |
A= (B + C) ÷ (52 – D) | A= (B + C) ÷ (260 – D) | A= (B + C) ÷ (D – E) |
| Key to formula | A is the employee’s average weekly number of hours; B is the number of hours the employee worked during the 52 weeks; C is the number of hours in respect of which the employee took paid leave during the 52 weeks; D is the number of weeks the employee took unpaid leave during the 52 weeks; | A is the employee’s average weekly number of hours; B is the number of hours the employee worked during the 260 weeks; C is the number of hours in respect of which the employee took paid leave during the 260 weeks; D is the number of weeks the Employee took unpaid leave during the 260 weeks; | A is the employee’s average weekly number of hours; B is the number of hours the employee worked during the entire period of continuous employment; C is the number of hours in respect of which the employee took paid leave during the entire period of continuous employment; D is the number of weeks of the employee’s entire period of continuous employment; E is the number of weeks the employee took unpaid leave during the entire period of continuous employment. |
The average weekly hours is the greatest of these three calculations.
| 52 weeks | 260 weeks | Entire period of employment |
|---|---|---|
Step 1 Add the number of hours worked in the last 52 weeks to the number of hours of paid leave in the last 52 weeks | Step 1 Add the number of hours worked in the last 260 weeks to the number of hours of paid leave in the last 260 weeks | Step 1 Add the number of hours worked over the entire period of continuous employment, to the number of hours of paid leave in that time |
Step 2 Subtract the number of weeks of unpaid leave taken in the last 52 weeks (if any) from 52. | Step 2 Subtract the number of weeks of unpaid leave taken in the last 260 weeks (if any) from 260. | Step 2 Subtract the number of weeks of unpaid leave taken over the entire period of continuous employment (if any) from the number of weeks worked in that period. |
Step 3 Divide the answer you got at step 1 by the answer you got at step 2. | Step 3 Divide the answer you got at step 1 by the answer you got at step 2. | Step 3 Divide the answer you got at step 1 by the answer you got at step 2. |
Example
Dani has worked at a dance studio as a casual instructor for the past 10 years.
She works according to a roster but depending on lesson schedules, her hours
can change from one week to the next. Dani took 52 weeks of unpaid parental leave from February 2020 to February 2021. Dani has not taken any long service leave before but would like to do so now.
Dani’s hours over the past 10 years have been as follows:
| Year | Hours worked |
|---|---|
| 2012 | 600 |
| 2013 | 550 |
| 2014 | 620 |
| 2015 | 640 |
| 2016 | 638 |
| 2017 | 580 |
| 2018 | 655 |
| 2019 | 635 |
| 2020 | 100 |
| 2021 | 550 |
| 2022 | 635 |
| Total hours in the last 52 weeks | 635 |
| Total hours in the last 260 weeks | 2,575 |
| Total hours worked for the period of continuous employment | 6,203 |
| Total weeks worked for the period of continuous employment | 520 |
In the last 52 weeks
635 hours worked plus no hours of paid leave = 635 52 weeks minus no weeks of unpaid leave
635 divided by 52 = 12.2 normal weekly hours for the purposes of long service leave
In the last 260 weeks
2,575 hours worked plus no hours of paid leave = 2,575 260 minus 52 weeks unpaid parental leave = 208
2,575 divided by 208 = 12.4 normal weekly hours for the purposes of long service leave
For the entire period of continuous employment
6,203 hours worked plus no hours of paid leave = 6,203 520 weeks worked minus 52 weeks of unpaid leave = 468
6,203 divided by 468 = 13.3 normal weekly hours for the purposes of long service leave
Because Dani’s average weekly hours of work over the entire period of continuous employment is greater than the average weekly hours over either the last
52 or 260 weeks, her normal weekly hours for the purposes of long service leave will be 13.3 hours per week (because it is the greatest of the three averages).
How is long service leave calculated if the employee’s ordinary hours of employment have changed?
An employee’s long service leave entitlement is based on their normal weekly hours at the time the leave is taken, or at the time employment ends and the employee receives payment for any unused long service leave. However, in some cases, an employee’s ordinary hours of employment may change. For example, an employee may move from full-time to part-time employment, or vice versa.
Where an employee’s ordinary hours have changed in the 104 weeks immediately before the employee takes long service leave, the employee’s hours for calculating long service leave will be averaged over the preceding 52 weeks, 260 weeks, or the entire period of continuous employment, whichever average is greatest.
Example
Sonia has been continuously employed as a manager at a restaurant for eight years. For the first seven-and-a-half years she worked full-time (38 hours per week) but for the last 26 weeks she has worked part-time for 24 hours per week. Sonia takes 152 hours of annual leave every year.
Sonia’s hours for the last eight years have been as follows:
| Year | Hours worked |
|---|---|
| 2015 | 1,824 |
| 2016 | 1,824 |
| 2017 | 1,824 |
| 2018 | 1,824 |
| 2019 | 1,824 |
| 2020 | 1,824 |
| 2021 | 1,824 |
| 2022 | 1,460 |
| Total hours worked in the last 52 weeks | 1,460 |
| Total hours worked in the last 260 weeks | 8,756 |
| Total hours worked for the entire period of continuous employment | 14,228 |
| Total weeks worked for the entire period of continuous employment | 416 |
| Hours of paid leave in the last 260 weeks | 760 |
| Hours of paid leave for the entire period of continuous employment | 1,216 |
In the last 52 weeks
1,460 hours worked plus 152 hours of paid leave = 1,612 52 weeks minus no weeks of unpaid leave = 52 weeks
1,612 divided by 52 = 31 normal weekly (averaged) hours for the purposes of long service leave
In the last 260 weeks
8,756 hours worked plus 760 hours of paid leave = 9,516 260 minus no weeks’ unpaid leave = 260 weeks
9,516 divided by 260 = 36.6 normal weekly (averaged) hours for the purposes of long service leave
For the entire period of continuous employment
14,228 hours worked plus 1,216 hours of paid leave = 15,444 416 weeks worked minus no weeks of unpaid leave = 416
15,444 divided by 416 = 37.1 normal weekly (averaged) hours for the purposes of long service leave
Because Sonia’s average weekly hours of work over the entire period of continuous employment is greater than the average over either the last 52 or 260 weeks, her normal weekly hours for the purposes of long service leave will be 37.1 hours per week.
How is long service leave calculated if there is no ordinary time rate of pay?
An employee’s long service leave entitlement is based on their ordinary time rate of pay at the time the leave is taken or is to be paid out on termination. However, in some cases, an employee may not have a fixed ordinary time rate of pay. And in other cases, an employee’s wages or salary may include an hourly rate of pay and/or other regularly provided benefits which increase or vary the total salary over time. Examples which affect the calculation of ordinary pay under the Act include where the employee is paid per piece of work, per delivery, or on commission plus retainer or base rate.
Where an employee’s ordinary time rate of pay is not fixed for an employee’s work under the relevant employment agreement, the employee’s ordinary time rate of pay is the average of their weekly rate earned over the preceding 52 weeks, 260 weeks, or over the entire period of continuous employment (whichever is the greatest).
Non-discretionary commissions and regular bonuses (for example, those based on sales targets) that are included in the employee’s contract of employment may be counted as part of their rate of pay.
Example
Dragan is a real estate agent who has worked for the same agency for eight years. Dragan has resigned from his employment. He did not take any long service leave during his employment.
Dragan’s contract of employment specifies he is paid a retainer of $25,000 per annum, plus commission for sales he has written for the company. In the last five years, Dragan’s retainer did not alter but his commission varied.
Dragan’s earnings over the past eight years is as follows:
| Year | Commission $ | Retainer $ | Total p.a $ |
|---|---|---|---|
| 2015 | 25,000 | 50,000 | 75,000 |
| 2016 | 40,000 | 50,000 | 90,000 |
| 2017 | 30,000 | 50,000 | 80,000 |
| 2018 | 20,000 | 50,000 | 70,000 |
| 2019 | 45,000 | 50,000 | 95,000 |
| 2020 | 40,000 | 50,000 | 90,000 |
| 2021 | 35,000 | 50,000 | 85,000 |
| 2022 | 40,000 | 50,000 | 90,000 |
In the last 52 weeks
$90,000 earned divided by 52 weeks = $1,730.76
In the last 260 weeks
$430,000 earned divided by 260 weeks = $1,661.53
For the entire period of continuous employment
$675,000 earned divided by 416 weeks = $1,622.59
Because Dragan’s average weekly rate earned over the last 52 weeks is greater than the average over either the last 260 weeks, or the entire period of continuous employment, his ordinary time rate of pay for the purposes of long service leave will be $1,730.76 per week.
Does ordinary pay include the value of items such as mobile phones and cars?
Yes, if the value of the item forms part of the employee’s ordinary time rate of pay and is included in the contract of employment (oral or written).
Example
Shae works in sales for a company that sells stock feed. His contract of employment states that his total salary is $80,000.00 per year, packaged to include part cash payment, part the value of private use of an employer-provided mobile phone and part the value of private use of an employer-provided vehicle.
As the value of the vehicle and mobile phone form part of Shae’s salary and are included in his contract of employment, the value of the items would form part of his ordinary pay for long service leave purposes.
How is ordinary pay calculated when an employee is, or has been, on WorkCover?
If an employee is receiving WorkCover benefits or is working in suitable employment (i.e. as part of a return to work plan), the employee’s long service leave entitlement will be calculated on either their pre-injury normal weekly hours and ordinary time rate of pay, or their normal weekly hours and ordinary time rate of pay immediately before the employee starts long service leave, whichever is greater.
How do public holidays affect long service leave?
A public holiday falling within the period of leave is not counted as long service leave. This means that the public holiday hours will not be taken away from the employee's amount of accrued long service leave, in the same way as if the public holiday occurred during a period of paid annual leave.
This ensures that the employee will still enjoy the benefit of a public holiday should it fall during a period of long service leave.
Enforcement
Authorised officers
Authorised officers are appointed to carry out certain functions under the Act. They are employed by the Wage Inspectorate.
Authorised officers can require a person to provide information or documents for monitoring and enforcing compliance with the Act. Where an authorised officer exercises this power in person, the officer must produce their identity card for inspection. An authorised officer must also produce their identity card for inspection at any time during the exercise of a power under the Act, if asked to do so.
In some circumstances, it is a criminal offence not to provide the information or documents requested by an authorised officer in accordance with the Act. It can also be a criminal offence to produce a false or misleading document.
Can an employer or employee be penalised for breaching the long service leave act?
Yes, there are penalties for breaching the Act.
Penalties may apply where an employer:
- fails to pay an employee for the period during which the employee is taking long service leave;
- fails to pass on a pay increase that occurred while the employee was on long service leave;
- fails to pay an accrued long service leave entitlement on termination of employment;
- fails to pay an accrued long service leave entitlement on the employee’s death;
- pays an employee in lieu of allowing the employee to take long service leave as a paid break from work;
- knowingly employs a person while that employee is on long service leave from employment with that employer or another employer in relation to the hours for which they are taking the leave;
- fails to maintain correct long service leave records or to keep those records for at least seven years after the employee stops working for the employer;
- makes a false or misleading statement in a long service leave record;
- fails to provide information or documents to an authorised officer in accordance with a notice to produce;
- provides a false or misleading document to an authorised officer;
- refuses an employee’s request to be provided with a copy of a long service leave record relating to the employee; or
- takes adverse action against an employee because they have or exercise an entitlement under the Act or make an enquiry about such an entitlement.
Penalties may apply where an employee:
- accepts payment in lieu of taking long service leave as a paid break from work
- works while on long service leave of this guide for information on the rules that apply when an employee has more than one job).
Most offences under the Act attract a penalty of 12 penalty units for natural persons and 60 penalty units for a body corporate.
Prosecution time limits
Strict time limits apply to enforcement by the Wage Inspectorate of an employer’s obligations under the Act. If a dispute arises as to allegedly unpaid entitlements, seek advice without delay.
Information on long service leave can be obtained from the Wage Inspectorate on 1800 287 287.
Can directors or company officers be personally liable for a corporation’s breach of the act?
Yes. Under the Act, an officer of a body corporate may be liable for the conduct of the body corporate where the officer authorised or permitted the conduct or was knowingly concerned in any way (whether by act or omission).
If found guilty, the officer would then be liable for penalties and/or criminal conviction, in the same way as the body corporate.
However, it is not necessary that the body corporate first be prosecuted or found guilty of an offence, for a natural person, or officer, such as a director, to be found guilty of that offence. In some circumstances, the body corporate may have wound up and no longer exist.
Can a corporation be liable for the conduct of a director, employee or agent of the body corporate?
Yes. Conduct of an officer, employee or agent acting within their actual or apparent scope of employment or apparent authority is also taken to be conduct of the body corporate itself.
Penalties for failure to keep records under the Act
An employer must keep accurate long service leave records for employees during the entire period of their employment, and retain these records for at least seven years after the employment ceases.
The Act defines a long service leave record to include any register, certificate, notice, pay sheet or other document relating to an employee's long service leave entitlement. In order to comply with your obligations, records should include relevant information that demonstrates the following:
- the calculation of ordinary pay
- continuity of employment, highlighting any gaps in service
- any changes in business ownership
- any leave periods taken, including any periods of long service leave.
The FW Act, which applies to all Victorian businesses, also requires an employer to keep certain employment records and to provide payslips to employees.
It is an offence to fail to keep records in the manner prescribed by the Act. The penalty for this offence is 12 penalty units for a natural person, and 60 penalty units for a body corporate. If an employer is found guilty of this offence, a criminal conviction may also be recorded.
An employer must not refuse a request from an employee (or their personal representative) or an authorised officer of the Wage Inspectorate to produce the employee’s long service leave records. The penalty for this offence is 12 penalty units for a natural person, and 60 penalty units for a body corporate.
What happens if an employee is owed long service leave and the employer fails to pay?
Taking legal action to recover long service leave - civil remedies
An employee can seek recovery of money owed for long service leave entitlements under the Act by making a civil claim in the Industrial Division of the Magistrates’ Court. An order made by the Court in the employee’s favour may include a requirement that the employer pay the employee in respect of their long service leave, with interest. The civil claim must commence within six years of the employee’s entitlement arising – usually being the date employment ends. In this type of application, the employee would be alleging that the employer failed to pay the long service leave entitlement on termination.
Employees may ask an organisation registered under the FW Act (for example, a union) to act to recover money on their behalf. They may make such a request if they are a member of the organisation or eligible to be a member. If an employee is deceased, their estate may make a claim on their behalf.
The Industrial Division of the Magistrates’ Court issues practice notes which provides guidance on procedures for Procedure in the Industrial Division (Civil Jurisdiction) for civil claims and can be found at mcv.vic.gov.au.
Criminal prosecution
If an employer fails to pay the full amount of an employee’s long service leave entitlement on the day employment ends, the employer may be prosecuted in the Industrial Division of the Magistrates’ Court for a criminal offence. Only the Wage Inspectorate or an authorised officer may bring a prosecution. Unions and other employee groups cannot bring a criminal prosecution.
If an employer is found guilty of failing to pay a long service leave entitlement, the employer may be fined an appropriate penalty and may also have a criminal conviction recorded against them.
The penalty for this offence is 12 penalty units for a natural person and 60 penalty units for a body corporate. These penalties apply for every day during which the offence continues, which may result in a significant fine.
If the employer is found guilty, the Court may also order that the employer pay the outstanding long service leave entitlement to the employee and may also order that interest be paid.
Adverse action against employees prohibited
What is adverse action?
Adverse action is defined in the Act to mean:
- dismissing an employee
- injuring an employee in their employment
- altering the position of an employee to their prejudice
- discriminating against the employee
- knowingly or recklessly making a false representation about an employee’s long service leave entitlements.
It is an offence under the Act for an employer to take adverse action against an employee because:
- the employee has an entitlement under the Act; or
- the employee seeks to exercise an entitlement under the Act
- the employee enquires about their entitlements under the Act
- the employee challenges a direction to take long service leave in the Magistrates’ Court.
Where to get more information
Long service leave calculator
The long service leave calculator is an online tool that you can access on the Business Victoria website.
The calculator can provide an estimate of the number of weeks accrued long service leave on termination or at any other point in time during employment, and as to when long service leave can be taken.
Contact Wage Inspectorate Victoria
The Wage Inspectorate administers the Act on behalf of the Victorian Government. The Wage Inspectorate operates a telephone information service, provides information and education services, investigates alleged breaches of the Act, and is empowered to enforce the provisions of the Act.
You can obtain more information about long service leave online or by calling the Wage Inspectorate on 1800 287 287. You can access a copy of the Act online.
If you need an interpreter, call 131 450, ask for the language you need and to be connected to the Wage Inspectorate on 1800 287 287.
The Wage Inspectorate’s website also has translated information available.
Further assistance
Some employees are not entitled to long service leave under the Act, but instead have an entitlement under federal law. For more information about this, contact the Fair Work Ombudsman.
Employers may also contact their employer organisation for help.
Employees may also contact JobWatch for assistance with any employment-related issues.