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Long service leave

Long service leave is a long-standing entitlement for Australian employees.

Most Victorian workers qualify for long service leave if they have worked continuously with one employer for at least 7 years. This applies to work that is:

  • full time
  • part time
  • casual
  • seasonal
  • fixed term.

Long service leave accrues at a rate of one week for every 60 weeks of continuous service – that’s about 0.866 of a week each year.

Employers must keep long service leave records and provide them to current or former employees on request.

In Victoria, from 1 July 2021, the Wage Theft Act 2020 makes it a crime to falsify employee entitlement records or to avoid keeping records to gain a financial advantage.

Tools and resources

You can get an estimate of how much long service leave you have accrued using the calculator on Business Victoria’s website. The calculator provides an indicative calculation – businesses should check with their own experts to calculate long service leave accruals that take into account all the relevant circumstances.

Business Victoria also has information to help businesses maintain good staff records.

We have a comprehensive guide to the Long Service Leave Act 2018:

Our role

At the Wage Inspectorate we investigate reports about businesses withholding long service leave and answer general enquiries about long service leave.

Ask a question or report a business

Use our online form to:

  • report a business you suspect of breaking long service leave rules
  • ask a question about long service leave
  • submit additional documents for an existing report.

Ask a question or make a report

You can also ask a question or make a report by calling us on 1800 287 287.

Frequently asked questions

  • Most Victorian employees will be covered by and entitled to long service leave in accordance with the Act, unless they have a 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-reform award or under some other workplace law.

    The Act does not apply to employees who are entitled to long service leave under another Victorian Act to the extent of any inconsistency.

    The Act does not apply to 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) that commence in 2019.

  • After at least 7 years’ continuous employment with one employer, an employee is entitled to:

    1. take their long service leave
    2. be paid any unused long service leave entitlement if employment ends.

    Example

    Jenny has worked at a chemist for 8 years and 6 weeks.

    Jenny wants to renovate her house but doesn’t have the time. A friend of Jenny’s tells her she might be entitled to take long service leave because she has more than 7 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:

    1. 8 years multiplied by 52 weeks = 416 weeks.

    2. 416 weeks + 6 weeks = 422 weeks.

    3. 422 weeks divided by 60 = 7 weeks.

    4. Jenny is entitled to take up to 7 weeks' long service leave to renovate her house.

  • The Act provides entitlements for employees to long service leave. An employee is defined by the Act as 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 him or her 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 than the Act under a common law employment contract. However, a contract cannot legally contain long service leave entitlements inferior to the Act. 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.

    Independent contractors

    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.

    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 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 employment ends before 10 years.

    Janika resigns from her employment after 8 years and asks her employer to pay her 7 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 10 years.

    Despite the wording of her contract of employment, she is entitled to payment for 7 weeks’ long service leave on the day her employment ends. This is because long service leave terms in a contract that are lesser entitlements (i.e. less favourable) than under the Act are invalid, and 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 10 years, and she is entitled to 8.7 weeks of long service leave.

    Esther and her employer become involved in a dispute over her long service leave entitlement, and Esther is offered a settlement by her employer equivalent to 6 weeks.

    Despite any settlement agreement, based on a 10-year employment period, she will be entitled to payment for 8.7 weeks of long service leave in accordance with the Act, and she retains the right to recover the underpayment even if she has signed the settlement agreement.

  • Yes, the Act explicitly entitles casual, seasonal and fixed term employees to long service leave. A casual or seasonal employee’s employment must still be ‘continuous’ under the Act.

    The rules for casual and seasonal employees mean that employment will be deemed continuous if there is not an absence of more than 12 weeks between any two instances of employment. However, 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 casual or seasonal 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. It is illegal to 'cash out' an employee’s long service leave entitlement instead of allowing the employee to access the leave as a break from work – except where employment has ended.

    Fixed term employees

    The Act provides that where employment terminates because the fixed period of employment has expired, but the employee is re-engaged 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 4-month break from work each year. However, this is in accordance with his employment agreement and his employment is to be regarded as continuous.

    Paul will be 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, lengthy absences.


    Example two – seasonal employment

    Russell works on a seasonal basis at Ruth’s Plant Nursery. Russell has worked at the nursery for 8 years.

    Russell does not work in the coldest winter months when there is a dormant period for the plants. The non-working period ranges from 5 weeks to a few months over the years of working at Ruth’s. On at least 3 occasions, the winter spell has lasted for more than 3 months. However, Russell’s regular work always recommences after the winter shut down although the gap varies according to the severity of a winter.

    Russell is eligible for long service 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 and has done so for the last 2 years.

    Leo’s mother unfortunately falls ill, and Leo must take 4 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 4 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 6 years.

    Ashanti takes an initial period of 52 weeks’ parental leave. Before the end of the initial 52 weeks’ unpaid parental leave, Ashanti applies to extend it 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 interrupt 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 due to seasonal factors related to the ski season.


    Example five – fixed term employment

    Karina works at an accountant’s business in the city. Karina has been employed at her job for 8 years. Karina is currently employed on an ongoing basis, but for the first 3 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. On the last occasion, however, there was a gap of 4 weeks between the expiration of Karina’s third and last fixed term contract and the commencement of her ongoing employment.

    Despite Karina being employed under a total of 4 separate employment contracts, the first 3 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 there was never a gap of more than 12 weeks after the expiration of Karina’s fixed term contracts on each occasion.

  • Yes. An employer may agree to leave being taken before an entitlement is due. If the employment then ends before the long service leave is accrued, the employer may deduct from monies owed to the employee on termination, an amount equivalent to the long service leave taken in advance. However, there is no requirement for an employer to agree to this.

  • Yes. An employer may direct an employee to take leave by giving at least 12 weeks’ written notice. If the employee does not want to take their leave at the time nominated by the employer, they can apply to the Industrial Division of the Magistrates’ Court for a decision about this dispute.

  • Yes. An employer may agree to an employee taking a period of leave at half pay. For example, an employee with 13 weeks’ accrued long service leave could take a 26 weeks’ break at half pay. Again, there is no requirement for an employer to agree to this.

    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.

  • Resignation, redundancy, termination, death

    There is no entitlement to a payment of accrued long service leave unless there is at least 7 years’ continuous employment immediately before employment ends.

    On the day that employment ends, an employee with at least 7 years’ continuous employment with one employer is entitled to receive payment for any untaken long service leave. This will apply whether the employee has resigned, has had their employment terminated by the employer, has been made redundant, or has died. If an employee has accrued long service leave but dies before it is taken, a payment must be made to the employee’s personal representative.

    It is an offence for an employer not to pay an employee the full amount of the employee’s 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.

    Where an employee has already taken some long service leave, the employer must pay any remaining accrued leave when employment ends. When calculating long service leave, weeks of long service leave already taken or paid for in accordance with the Act must be deducted.

    It is important to note that payments in lieu of long service leave are prohibited (where employment is still continuing), as this is in breach of the Act’s prohibition on ‘cashing out’ of long service leave.

    Example one

    Jacqui resigns from her employment, and, following completion of her notice period, her employment ends after 7 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 for 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 7 years’ continuous employment by the last day of his employment, there is no entitlement to a payment of accrued long service leave.

    If, however, Marcus had worked out his period of notice, he would have accrued 7 years’ service, and would then be entitled to a payment in lieu of long service leave.


    Example three

    Jayne is retiring after 22 years. After 8 years of employment, Jayne took 6 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 for 13.1 weeks of long service leave on the day her employment ends.

  • No. 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. An employee can only receive payment for any unused long service leave if their employment ends before the leave is taken (the only time long service leave can be paid out is when employment ends). Both an employee and an employer can be liable for this offence. If an employer or employee is found guilty of this offence, a criminal conviction may also be recorded.

  • 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 transfers to the new employer, who becomes liable for the long service leave accrued across the entire period of employment. It is common for the sale of business documents to reflect this liability, but such documents cannot validly exclude an employee’s entitlement. Even if the contract for the sale of business does not include contingencies to cover a transferring employee’s long service leave, the employee still has an entitlement with the new owner under the Act.

    Where an employee will continue with the new owner of the business, the old employer generally should not pay out accrued long service leave to the employee, as this may amount to an unlawful 'cashing out' of the entitlement. There are sale-of business situations in which it may be unknown to an employer whether an employee may become re-employed by a new owner of their business (discussed below).

    It is 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. Whatever the seller and purchaser agreed during their negotiation has no bearing on their continuing obligations to the employee under the Act, and any arrangement must ensure strict compliance with the Act.

    Sale of business

    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.

  • 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.

    Some apprentices are employed by a Group Training Company, which places the apprentice with a host employer. The apprentice may later become employed by the host employer directly. In this circumstance the rules that apply to insourcing and outsourcing will apply. That is, the continuous employment with the Group Training Company must be recognised by the host employer.

  • Certain leave and/or absences occur in employment that impact both the continuity of employment on the one hand, and what counts towards the accrual of long service leave on the other. Certain absences do not break continuous employment under the Act, while others do. Similarly, certain absences count towards the period of 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:

    1. Has an employee taken any leave or absences of a type that break continuous employment?
    2. Do the types of leave or absences an employee takes during employment count towards the period of employment for the purposes of the accrual of long service leave?
  • For an employee to become entitled to long service leave, their employment with the employer must be continuous. This does not prevent the employee taking certain paid or unpaid breaks from work. Also, some other specified leave and absences will be deemed to not interrupt or 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.

    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 will also not break continuous employment.

  • Unpaid parental leave up to 52 weeks will count towards continuous employment for accrual of long service leave, and no amount of paid or unpaid parental leave will break continuous employment for long service leave purposes.

    Unpaid parental leave exceeding 52 weeks will not count towards the accrual of long service leave, unless:

    • the (longer) period of absence is taken to be a period of employment in accordance with the relevant written or oral employment agreement
    • the employee and employer agree in writing before the (longer) leave is taken that the leave is to be regarded as a period of employment
    • the (longer) period of unpaid leave is any other form of leave provided for in the relevant written or oral employment agreement (Section 3 of the Act contains a broad, non-exhaustive definition of what is meant by the term ‘employment agreement’).

    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 employment for accrual of long service leave purposes.

    If the Act commences 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 accruing long service leave

  • 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 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 and state their effect on continuous employment and what counts towards the period of employment for long service leave purposes. The absences identified are not an exhaustive list of all circumstances that may affect the accrual of long service leave.

    The tables separately address what the rule is for the absence/s or interruption/s identified, depending on whether these have occurred under the Act (from 1 November 2018), or the 1992 Act (as it previously applied).

    Tables: effect of absences/leave on long service leave

    Common absences and how they affect continuous employment if they occur on and from 1 November 2018

    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  
    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  

    Common absences and how they affect continuous employment if they occurred under the 1992 Act (before 1 November 2018)

    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 3 months
    Absence from work because of illness or injury Parental leave exceeding 12 months unless otherwise specified in the relevant employment agreement or provided for under the National Employment
    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 agreement or provided for under the National Employment Standards  
    The dismissal of an employee if the employee is re-employed within 3 months of the dismissal  

    Common absences from work that count or do not count towards the period of continuous employment if they occur on and from 1 November 2018

    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 agreement
    Unpaid leave (including unpaid parental leave) up to 52 weeks, or longer if the leave is provided for under the relevant employment agreement 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  

    Common absences from work that count or do not count towards the period of continuous employment if they occurred before 1 November 2018

    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 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 3 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

     

Reviewed 30 June 2021

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