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As a whole, Australia has strict parameters that protect the rights of employers and employees. This includes specified leave periods, which includes long service leave. If you are a Victorian employer, this article will take you through what long service leave is and how you can calculate it. 

What Is Long Service Leave?

Long service leave refers to a leave entitlement that an employee accrues based on how many years they continually served a company. Long service leave entitlements usually stem from the long service leave laws applicable to each state or territory. However, a federal award governs some employees’ long service leave. 

In Victoria, the Long Service Leave Act 2018 (the Act) governs long service leave. The Act provides that almost all Victorian workers have a right to long service leave.

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Who Gets Long Service Leave?

According to the Act, an employee of a business has a right to long service leave. The Act further defines this, providing that an ‘employee’ may be:

  • full time; 
  • part time;
  • casual; or
  • seasonal.

This definition also includes fixed-term workers.

It is important to note that you must consider casual and seasonal employees’ employment ‘continuous’ for them to be able to take long service leave. You can consider employment for casual and seasonal employees to be ‘continuous’ if there is not more than a 12 week absence between employment periods, with certain exceptions. For example, any unpaid absence due to illness will not constitute a break in the continuous employment period.

Calculating Long Service Leave

After at least seven years of employment with a specific employer, your employee can take their long service leave, and you must pay them any unused long service leave entitlement if their employment ends.

Long service leave accrues at a specific rate, being one week for every 60 weeks of continuous service. This is equivalent to about 0.866 weeks per year.

For example, consider an employee is working as an accountant. They work in their job for ten years without taking any parental leave, unpaid carers’ leave or other long service leave. In that case, they would be entitled to 8.7 weeks of long service leave.

Business Victoria has developed a helpful long service leave calculator to help calculate long service leave entitlements.

Impact of Other Leave

When calculating an employees’ long service leave, it is important to consider that all forms of paid leave are considered ‘continuous’ employment for the purposes of long service leave. This includes annual leave, carers’ leave and other periods of long service leave.

Unpaid leave will also count towards the ‘continuous’ employment period for up to 52 weeks. However, any period over 52 weeks will not count unless it falls under certain exceptions. For example, if they took the leave due to illness or injury, or if you and your employee agree that you will consider the leave a period of employment.

Terminated Employment

When an employee leaves their job and has not had at least seven years’ continuous employment, you as an employer have no obligation to pay long service leave entitlements.

On the other hand, if an employee has more than seven years of continuous employment with you as the same employer, they have the right to their long service leave entitlements, regardless of the reason for the end of their employment. This applies even if you dismiss your employee for misconduct.

However, it is an offence to pay an employee for long service leave to replace a break from work if you are still employing them.

Forced Long Service Leave

It is possible for you to direct an employee to take their long service leave. In that case, you must provide the employee with 12 weeks’ written notice of the direction. If the employee does not agree with this decision, they must apply to the Magistrates’ Court for a decision.

Change of Ownership

If a business has a change of ownership, whether it is sold or assigned, if you are a new employer, you become responsible for all leave entitlements. This includes being liable for long service leave. Therefore, employees must maintain accurate long service leave records that can be provided to the new owners and employees when requested.

Key Takeaways

Australia has strict parameters that protect the rights of employers and employees. This includes specified leave periods, which includes long service leave. Long service leave refers to a leave entitlement that accrues based on an employee’s number of years of continuous service with a company. When calculating long service leave, you should consider that:

  • an employee has a right to long service leave after seven years of continuous employment;
  • almost all employees have a right to long service leave, including causal workers; and
  • periods of unpaid leave will impact long service leave entitlements.

If you need assistance understanding your employees’ long service 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

What is long service leave?

Long service leave refers to a leave entitlement that is accrued based on an employee’s number of years of continuous service with a company. Long service leave entitlements usually stem from the long service leave laws applicable to each state or territory. In Victoria, the Long Service Leave Act 2018 governs long service leave. 

How is long service leave calculated in Victoria? 

In Victoria, long service leave is accrued at a specific rate, being one week for every 60 weeks of continuous service. This is equivalent to about 0.866 weeks per year. There are a number of factors that you should consider when determining the meaning of ‘continuous employment’, such as certain periods of unpaid leave.

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