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A true casual employee is one whose employment is ad hoc and irregular, where the employee has no reasonable expectation of continuing employment. By contrast, a permanent employee is one whose employment is regular and systematic. This means that the employee has a reasonable expectation of continuing employment. Although your casual employees do not receive paid annual leave or sick leave the way your permanent employees do, they may be entitled to long service leave. This article sets out whether casual employees are entitled to long service leave and the obligations this would impose upon your business.

What is Long Service Leave?

Long service leave rewards employees who have been employed in a company for at least ten years, or seven years in the ACT and Victoria. This entitles them to take paid time off work, acknowledging their loyalty to the business. 

Long service leave is different from other types of leave because it is not legislated by the federal government under the Fair Work Act 2009 (Cth). Rather, each state and territory has its own long service leave legislation. This means that each state or territory has different requirements as to:

  • whether a casual employee is entitled to long service leave;
  • when a casual (or other) employee is entitled to long service leave;
  • the amount of this entitlement;
  • whether employees can access long service leave before ten years of service (or before seven years in the ACT and Victoria); and
  • when the employee has broken their service.

Are Casual Employees Entitled to Long Service Leave in My State or Territory?

We have considered whether casual employees are entitled to long service leave in the following states. The upshot is that all of the following states account for casuals. However, you should consider whether any exclusions apply to each specific employee.

New South Wales

Under the Long Service Leave Act 1955 (NSW), employees are entitled to long service leave based on their length of service. ‘Service’ is defined as continuous service regardless of whether the service is on a permanent, casual, part-time or another basis. In this sense, casuals can take long service leave.

Queensland

Similar to NSW, under the Industrial Relations Act 2016 (Qld) employees are entitled to long service leave based on their length of continuous service. The law specifically provides that an employee’s service is continuous even though:

  • the employee is engaged in casual employment;
  • any of the employment is not full-time employment; or
  • the employee has engaged in other employment during that period.

Importantly, you should carefully consider each individual case because the list above is not exhaustive.

Casuals are therefore entitled to long service leave. Further, the law includes specific provisions for the calculation of long service leave for casuals.

Victoria

In the Long Service Leave Act 2018 (Vic), employees (defined to include casual employees) are entitled to long service leave if they have completed seven years of continuous employment. The definition of continuous employment also contemplates casual employees, meaning that they are entitled to long service leave.

Australian Capital Territory

Similarly to Victoria, the definition of employees in the Long Service Leave Act 1976 (ACT) includes casual employees. The law provides that employees are entitled to long service leave if they have completed seven years of service.

South Australia

The Long Service Leave Act 1987 (SA) creates a long service leave entitlement for employees who have ten or more years of service. Although the definition of service makes no specific reference to casuals, it is broad enough to include casual employment. 

Further, the exclusions do not specifically apply to casual employment. Therefore, casual employees are entitled to long service leave in South Australia.

Western Australia

An employee is entitled to long service leave if they have completed ten years of continuous employment. Unlike other states, the Long Service Leave Act 1958 (WA) does not make reference to casual employees in its definition of continuous service. 

However, continuous service is defined broadly and its exclusions do not expressly prevent casuals from accessing long service leave. The law also makes reference to casuals when detailing how you should calculate the long service leave entitlements. On that basis, casual employees in WA are entitled to long service leave.

True Casual Employees

If you have employed casual employees for a long period of time, you should also consider whether they are true casuals or actually permanent employees. This is especially relevant if you have employed them for a lengthy period which may entitle them to long service leave.

The distinction between casual and permanent employees is a complex one. Importantly, someone who is employed for a long period of time is more likely to have an: 

  • ongoing expectation of work; and 
  • advance commitment to the period of work.

Engaging an employee as a casual when they are in fact better classified as a permanent employee may create an underpayment liability for you. This is because you are not paying permanent entitlements to the casual employee.

Key Takeaways

Therefore, casual employees are entitled to long service leave in:

  • NSW;
  • Queensland;
  • Victoria;
  • ACT;
  • WA; and
  • SA.

However, each state and territory has specific exclusions, which may apply to a particular employee. This means that you should assess an employee’s entitlement to long service leave on a case-by-case basis. You should also review the nature of the relationship to ensure that you have correctly classified the employee as a casual rather than a permanent employee. This may create an underpayment liability. If you have any questions about whether a particular employee is entitled to long service leave or whether an employee is permanent or a casual, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

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