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Employers need to be familiar with the term ‘continuous service’, as it concerns most areas of employment law. As an employer, you will refer to continuous service when calculating entitlements such as: 

  • notice of termination;
  • redundancy; and
  • long service leave.

It is essential to understand this term so that you can correctly apply it when calculating entitlements for your employees. It will also assist in understanding whether your employees have access to unfair dismissal. This article will take you through the impact that continuous service can have on an employees’ entitlements. 

What is Continuous Service?

The Fair Work Act 2009 (Cth) outlines the definition of continuous service. It refers to any period where the employer employs the employee but does not include any ‘excluded period’. An excluded period is any period:

  • of unauthorised absence; 
  • of unpaid leave or unpaid authorised absence; or
  • as set out in the Fair Work Regulations.

An excluded period does not break an employee’s continuous service with their employer. However, it does not count towards the employee’s length of service. For example, consider an employee who works for ten months, takes six months of unpaid leave, and returns to work for two months. In this case, the length of continuous service would amount to twelve months.

It is important to note that the resignation or dismissal of an employee will break the period of continuous service. For example, if an employee resigns and then re-joins the company a year later, the employee has broken the period of ongoing service.

Continuous Service and Employee Entitlements

Continuous service periods affect many different employee entitlements. You can find some of these entitlements in further detail below.

Notice of Termination

Many entitlements under the Fair Work Act are based on how long an employee has been with the employer. Therefore, the minimum notice period for termination must comply with this table provided by Fair Work.

Period of Continuous Service

Minimum Notice Period

1 year or less

1 week

More than 1 year – 3 years

2 weeks

More than 3 years – 5 years

3 weeks

More than 5 years

4 weeks

You must give employees over 45 years old an additional week of notice if they have completed at least two years of service when they receive the notice.

Redundancy Entitlements

Similarly, redundancy entitlements vary depending on the length of service. You can refer to the table below:

Period of Continuous Service

Redundancy Pay

At least 1 year but less than 2 years

4 weeks

At least 2 years but less than 3 years

6 weeks

At least 3 years but less than 4 years

7 weeks

At least 4 years but less than 5 years

8 weeks

At least 5 years but less than 6 years

10 weeks

At least 6 years but less than 7 years

11 weeks

At least 7 years but less than 8 years

13 weeks

At least 8 years but less than 9 years

14 weeks

At least 9 years but less than 10 years

16 weeks

At least 10 years

12 weeks

You will need to be able to calculate the length of continuous service of your employees. This way, you can calculate the relevant notice period for termination or redundancy pay in the case of redundancy.

Redundancy Payments for Casual to Permanent Employees

Additionally, you might have some workers who start as casual employees and later convert to permanent employment. When calculating their redundancy payments, note that periods of casual employment will count towards their continuous employment period.

You may need to include this period of service as a ‘regular and systematic casual’ when calculating the length of continuous service for a redundancy payout. However, this will only apply to you if:

  • you have casual employees who have moved to a permanent role; and
  • the casual employee worked on a regular and systematic basis.

You should note that this does not mean that casuals are entitled to redundancy pay at termination.

Casual and Seasonal Employees

Calculating continuous service periods can be more complex for casual and seasonal employees. Due to the nature of their employment, they will usually work intermittently or with irregular hours. Moreover, breaks between shifts or seasons do not typically break the continuous employment period for that employee. 

Similarly, employees with ‘fly-in, fly out’ working arrangements will often go weeks without work. The same principles for casual and seasonal employees will apply in this case. If breaks occur between work as part of the employee’s natural work cycle, it does not mean that the employee has been absent from work. Therefore, the entire period, including breaks between work, is considered a period of continuous employment.

Long Service Leave

Both casual and permanent employees may be entitled to Long Service Leave. However, unlike most forms of leave, the federal government does not regulate long service leave laws. Instead, each state and territory has their own laws regarding long service leave. Each state and territory has different criteria as to:

  • when an employee is entitled to long service leave; 
  • the amount of this entitlement; and
  • when the employee has broken their service.

NSW, QLD, VIC and ACT allow employees long service leave based on the length of their continuous service, including service as a casual employee.

Unpaid Parental Leave 

If an employee takes unpaid parental leave, it does not break the period of continuous service. However, it does not count towards its length. For example, if your employee works for three years and then takes one year of parental leave, they have not broken the period of continuous service. Instead, the length of service remains at three years.

Further, all employees in Australia are only entitled to unpaid parental leave once they have completed at least 12 months of continuous service with their employer. This entitlement extends to casual employees, provided that you have employed them for a minimum of 12 months. Although, you must have employed them regularly throughout that period. They must also have reasonably expected to continue working for you regularly. 

Unfair Dismissal Rights

The determining factor as to whether an employee can bring an unfair dismissal claim is if the employee has completed a minimum service period. For small businesses with less than 15 employees, the employee must have performed 12 months of continuous service before they can bring a claim. For a business with more than 15 employees, the employee may bring a claim after six months of continuous service.

As a casual employee, a period of continuous service generally does not count towards the minimum employment period needed to bring forward an unfair dismissal claim. However, exceptions include if the casual employee:

  • was employed on a regular and systematic basis, and
  • had a reasonable expectation of ongoing employment.

Key Takeaways

As an employer, you need to be able to understand the meaning of the term ‘continuous service’ to correctly calculate employee entitlements, including: 

  • notice to termination;
  • redundancy;
  • long service leave; and
  • parental leave.

If you need assistance understanding your employee’s entitlements, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

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Frequently Asked Questions

What is continuous service?

Continuous service refers to any period whereby the employer employs the employee. However, this does not include any ‘excluded period’. An excluded period includes any period o unauthorised absence, unpaid leave or unpaid authorised absence.

Why do I need to calculate an employee’s period of continuous service?

An employer needs to understand the meaning of an employee’s continuous service to calculate the employee’s entitlements correctly. For example, continuous service impacts an employee’s notice to termination, redundancy, long service leave and parental leave entitlements.

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