he nature of employment patterns has meant that long service leave is something that we, as employment professionals, face less frequently than in the past.  Shorter average employment relationships and a tendency towards casual employment in the retail end of the downstream petroleum industry, contribute to this infrequent exposure we have with long service leave.  But long service leave is an entitlement for our employees and a liability on the balance sheet that we need to actively understand and manage.

What determines Long Service Leave?

Long Service Leave is determined by; the employment contract or enterprise agreement, if it is not contained therein the next place to look is the Award, if it is not outlined in the Award then the long service leave legislation in the State is what applies.  There are differences in the State laws, see below for links to resources for each State.

Who gets Long Service Leave?

Long Service Leave is an entitlement for casual, part-time and full-time employees.

Taking Long Service Leave: How much and when?

The amount of Long Service Leave and the length of service required before an employee can take long service leave differs slightly from state to state.  However, as a general rule the entitlement to take Long Service Leave is only available after employment for the full qualifying period (eg. 10 years in NSW).

What about when an employee leaves?

On termination there are provisions for the amount of Long Service Leave that would have been accrued to be paid out as an entitlement for some employees on a pro rata basis.  This pro rata payment is only available to some employees (eg. Not casuals) and is only an entitlement after a qualifying period (eg. 5 years in NSW).

Some States have limitations in the availability of pro rata of Long Service Leave, making it unavailable to employees who are dismissed for misconduct.

How is Long Service Leave paid?

The State based nature of Long Service Leave, means that there is no short answer.  Most State laws outline that Long Service Leave is paid on ordinary hours and at the ordinary rate, with no penalties or overtime.  Check the links below for more information on your State.  For more information on the operation of Ordinary or Base Rate see here, here and here.

Accounting for Long Service Leave?

Accounting for the payment of entitlements for annual leave is not a difficult thing, as annual leave accrues as an entitlement based on the number of hours that the employee works, and is payable on termination without a qualifying period.  Accounting for Long Service Leave is a little more difficult.  Best practice would have businesses provisioning for Long Service Leave for every employee, every year.

However if you have a highly casualised or transitory workforce this is a drastic measure.  As a minimum businesses should be reviewing length of service and as employees approach the pro rata qualification service for the State, begin provisioning for Long Service Leave in the accounts, to avoid payment shock if the employee terminates the relationship.

State Long Service Leave Resources

  • NSW:  http://www.industrialrelations.nsw.gov.au/Employment_info/Leave/Long_service_leave.page
  • VIC:  http://www.business.vic.gov.au/hiring-and-managing-staff/long-service-leave-victoria
  • QLD:  https://www.business.qld.gov.au/business/employing/employee-rights-awards-entitlements/long-service-leave
  • SA:  http://www.safework.sa.gov.au/show_page.jsp?id=2477
  • TAS:  http://worksafe.tas.gov.au/laws/long_service_leave
  • WA:  http://www.commerce.wa.gov.au/labour-relations/long-service-leave-employer-obligations
  • ACT:  http://www.actleave.act.gov.au/
  • NT:  http://www.workplaceadvocate.nt.gov.au/pdf/NT_LSL_Act_FAQ.pdf

Tip of the Iceberg

There is much more to consider around the operation of Long Service Leave, including the managing public holidays, illness, transition of business and handling intrinsic elements like dangerous goods allowances.  These will be covered in next weeks HR Highlight.  In the mean time Members are reminded that, if you have any questions you can call through to the 1300 160 270 line or email employment@acapma.com.au for assistance.

Here to Help

ACAPMA Workplace Relations Professionals are available to assist members on 1300 160 270 or you can email elishar@acapma.com.au. ACAPMA members can access resources and can call on the advice and support of the ACAPMAlliance Workplace Relations Professionals on 1300 160 270.

HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by  calling 1300 160 270 and speaking to one of ACAPMA Workplace Relations Professionals it’s free for members. ACAPMA membership is affordable at only $770 per year for a single site, which represents great value with sites gaining HR advice support and representation as well as a raft of other benefits and discounts. Learn more about ACAPMA membership here.