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Generally, you may owe your employees long service leave entitlements if they have been working in your organisation for ten years or more. However, the Long Service Leave Act (the Act) sets out an exception. In NSW, an employee meets the criteria for receiving pro-rata long service leave if they have completed between 5 and 10 years of service and:

  • resign on account of illness, incapacity, or a domestic or other pressing necessity;
  • face dismissal for a reason other than serious and wilful misconduct; or 
  • pass away.

This article details this exception and outlines what your employee must prove to be eligible for long-service leave entitlements. 

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What Does Domestic or Other Pressing Necessity Mean?

The Act does not define ‘domestic or other pressing necessity.’ Therefore, courts use a subjective test to determine its meaning. This involves examining:

  • your employee’s state of mind; and 
  • whether they genuinely considered they had no other option but to resign and no reasonable alternatives. 

Ultimately, a ‘domestic or other pressing necessity’ may force an employee to resign due to extenuating circumstances outside of work. Some examples where courts have found a ‘domestic or other pressing necessity’ include employees who resigned:

  • to take care of a sick spouse or child;
  • to change jobs to lessen travel expenses during difficult financial circumstances;
  • due to their work on night shifts which would strain their familial relationships, despite repeated requests to transfer to the day shift; and 
  • because their employer was relocating and this would add considerable travel time. 

These examples indicate what a court might consider ‘domestic or other pressing necessity.’ However, your employee is entitled to the exception under the Act ultimately depends on their individual circumstances.

What Will a Court Consider When Determining Leave Entitlements?

In assessing whether your employee qualifies for pro-rata long service leave, the court will consider whether the exception in the Act covers the reason for termination. Your employee will be eligible if :

  • they completed at least five years of service for your organisation; 
  • you terminated employment for reasons other than serious and wilful misconduct; or
  • your employee terminated employment because of ‘illness, incapacity or domestic necessity.’ 

Additionally, a court will consider whether your employee’s reason for terminating their employment was genuine. Alongside this, the court will consider whether:

  • your employee could continue their employment by making reasonable accommodations;
  • the reason your employee claimed limited their ability to perform their role; and 
  • the situation was one where a reasonable person might have been compelled to terminate their employment. 

In a recent case, the Fair Work Commission (FWC) decided that a change in employment terms that rendered an employee unable to pick their children up from school did not constitute ‘domestic or other pressing necessity.’ The FWC held that the employee had not provided sufficient evidence to determine this.

Your employee may need to provide sufficient evidence about the reason for their resignation if they wish to claim pro-rata long service leave entitlements.

What Constitutes a ‘Domestic or Other Pressing Necessity’?

In the case of Sandra Rumiz v Stats Management Pty Ltd, the Court considered whether Ms Rumiz’s employer was liable to pay her pro-rata long service leave.

Ms Rumiz had worked for Stats Management Pty Ltd, but moved to Singapore with her husband after he was promoted at work. The court held that any resignation brought about by a worker’s decision to reside with her husband reasonably fulfils the ‘domestic necessity’ requirement under the Act.

The Court will also consider the employee’s family’s particular situation. For example, in the above case, the Court held that the employee did qualify for the exception when she needed to resign from her job. This was because her husband worked overseas, and she needed to move with him. 

In a similar case, an employee needed to move overseas as her husband could not leave his job. Consequently, the court granted her pro-rata long service leave. . In both instances, the employee’s circumstances gave them no other option but to resign.

In any event, you should seek legal advice if your employee wishes to claim pro-rata long service leave. This way, you can clarify your employee’s entitlements and avoid a potential dispute.

Key Takeaways 

There are limited exceptions in NSW where your employee is entitled to leave before providing your organisation with 10 years of service. Your employee may be entitled to pro-rata long service leave if they have completed between 5 and 10 years of and:

  • resign on account of illness, incapacity, or domestic or other pressing necessity;
  • face dismissal for a reason other than serious and wilful misconduct; or 
  • pass away.

If you want to clarify your employee’s leave 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.

Frequently Asked Questions

How do I calculate my employee’s leave entitlements?

Generally, you must calculate leave based on your employee’s ordinary rate of pay. Many state government websites provide leave calculators, such as the NSW Long Service Leave Calculator.

Can my employees cash out their long service leave entitlement? 

Your employee can only cash out long service leave where the relevant award or registered agreement allows it.

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