Am I Owed Long Service Leave Payments Before Working 10 Years in NSW?

An employee is entitled to receive their long service leave entitlements if they have been working in an organisation for ten years or more. However, section 4(2)(a)(iii) of the Long Service Leave Act 1955 (NSW) (the Act) sets out an exception. In NSW, an employee is entitled to pro rata long service leave if he or she terminates the employment because of illness, incapacity or domestic necessity. We unpack this exception below. 

What Does Domestic or Other Pressing Necessity Mean?

The Act does not define ‘domestic or other pressing necessity’ as such, courts will use a subjective test to determine its meaning. This involves examining the employee’s state of mind and whether he or she genuinely considered they had no other option but to resign (i.e. there are no reasonable alternatives).

What Will the Court Consider?

In assessing whether an employee qualifies to receive pro-rata long service leave, the court will consider the following questions: 

1. Did section 4(2)(a)(iii) cover the reason for termination? 
2. Was the reason genuine?
3. Was the reason claimed the real or motivating reason for terminating the employment (i.e. was it a trigger that led to the employee’s resignation)?
4. Was it possible for the employee to continue his or her employment (e.g. did the employer attempt to make reasonable accommodations for the employee to continue working such as flexible working hours)?
5. Did the reason the employee claimed limit his or her ability to perform their role?
6. Was the situation one in which a reasonable person might have felt compelled to terminate his or her employment?

For example, in Westbus Pty Ltd v Bartush [2000] NSWIRComm 26 the employee argued that a change in their employment terms meant that they were under financial strain and could not pick their children up from school, and therefore they had to resign. The Commission held that the employee had not provided sufficient evidence to determine whether the circumstances were those of ‘domestic or other pressing necessity’. It’s important to consider the evidence you have about the reason for your resignation if you are claiming your pro-rata long service leave entitlements.

What is Considered a ‘Domestic or Other Pressing Necessity’?

In the case of Sandra Rumiz v Stats Management Pty Ltd [1999] NSWCIMC 31, 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 however, moved to Singapore with her husband after he was offered a promotion. They held that any resignation brought about by a worker’s decision to reside with her husband is reasonably and properly characterised as a resignation on account of ‘domestic necessity’ under the Act.

The Court will also consider the employee’s family’s particular situation. For example, in Sandra Rumiz v Stats Management, the Court held that the employee did qualify under section 4(2)(a)(iii) of the Act when she needed to resign from her job as her husband had a job 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, and the court granted her pro-rata long service leave (Australian Municipal, Administrative, Clerical & Services Union v Qantas Airways Award (1996) 66 IR 70). In both instances, the employee’s circumstances gave them no other option but to resign.

What If My Employer Refuses to Pay?

If you are entitled to pro-rata long service leave, and your employer refuses to pay, your first step is to request payment under the Act. If your employer refuses, you should consider writing a letter of demand. After which you can take legal action claiming your long service leave.

***

If you are considering resigning from your job and believe you are entitled to long service leave payments under this section, you should seek legal advice to confirm your position. If you have any questions, get in touch with our employment law team on 1300 544 755.