Long service leave entitlements allow for an employee to take an extended leave of absence from their workplace after they have worked for a single employer, or one of the employer’s subsidiaries, for a significant period of time. The employees’ entitlement to long service leave is not tied to the employee doing the same job for the requisite number of years but instead tied to the total number of years they have been employed by the employer. In addition, even if the employee does not meet the time required for the full period of extended leave entitlements, it is possible for the employee to qualify for a lesser amount of time-based upon a lesser number of years of service to the same employer. Finally, it must be remembered that the time frames to qualify for a partial or full extended leave entitlement is particular to each state in Australia. So, before attempting to determine if you are eligible for long service leave, you must check the laws in your particular state.
Let’s begin by reviewing the New South Wales Long Service Leave Act (1955). This act is the controlling law for those who reside in NSW Australia and are considering taking Long Service leave or attempting to cash out their long service leave entitlement. There are two ways in which long service leave can become relevant to an employee;
- The employee has been employed with the same employer for 10 years or more
- The employee has been employed with the same employer for between 5-10 years
Long Service Leave for between 5-10 years of employment
Long service leave is an entitlement that can be available to those who have worked between 5-10 years for a single employer. Within this time frame, an employee might be eligible for a pro-rata share of their long service leave benefit. However, it is important to note that if an employee leaves their employment for the purpose of simply taking a new position, with a different employer, they will not be entitled to any pro-rata cash payout of their long term benefits. In addition, if the employee is let go for serious or willful misconduct, they also will be denied a payout of their long term leave. Hence, in this instance, the employee is only entitled to partial long term leave hours if they are absent from work due to illness, incapacity, a domestic/family emergency or their own death.
For those in need of a pro-rata long service leave, the question that tends to be the most contentious is the entitlement to long service leave for the purpose of a domestic or family emergency, such as caring for an elderly family member. The definition of such an emergency is not clearly defined within the Act, itself. Therefore, the majority of litigation that occurs around an employee needing a pro-rata period of long service leave to attend to a family emergency or care for a family member and/or domestic partner tends to be the cause of most disputes. In these cases, the court will apply a validity test to the circumstances being claimed. If the validity test is found in favour of the employee, then the employee can be found entitled to a pro-rata share of their long service leave dollars.
Long Service Leave for 10 years or more of employment
If an employee has been with the same employer for ten (10) years or more, they are entitled to approximately 8 weeks of long service leave benefits. If an employee remains with the same employer for more than 10 years additional long service leave can accrue. The rate of accrual is an additional 4 weeks of long service leave for every additional 5 years of employment.
These benefits are paid out in accordance with the number of years (10 or more) that the employee has worked for the employer. It is important to note that it must be years completed and partial weeks or months are not figured in when calculating the benefit entitlement. And, the benefit does not apply to an employee that has been terminated from their employment for misconduct.
Payment of long service leave for either 5-9 years of service or for 10 or more years of service, is paid out at the employees’ ordinary rate of pay. The use of the employee’s ordinary rate of pay is for those employees expecting to return to their employment after their period of leave.
A payout can also be made if the employee has the requisite number of years of employment and is permanently leaving their employment for one of the following reasons;
- Resignation (including retirement)
- Dismissal (for something other than serious or wanton misconduct)
- Job loss due to a finding of Redundancy, or the
- Death of an employe
- Illness/Incapacity (permanent)
- Domestic/Family necessity and/or emergency (permanent)
In these cases, where an employee will not be returning to work, the employer can use the WA calculator to correctly calculate the amount owed to an employee upon their departure from employment. The WA calculator should not be used if the employee will be returning to work in their same/similar capacity.
Long service leave benefits can result in some complications, particularly if the employer calls into question the basis for requesting the same. In these instances, it is best to consult with a professional who is knowledgeable and experienced in the types of circumstances that qualify an employee to receive long service leave benefits.
If you find yourself in need of assistance with this or any other legal issue, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.