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New Long Service Leave Legislation

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Earlier this year the Victorian Government passed the Long Service Leave Act 2018 (Vic), which has now come into effect as of 1 November 2018, and replaces the Long Service Leave Act 1992. The new Act has practical implications for all businesses operating in Victoria.

Here are some key points and differences in the new Long Service Leave Act 2018 (Vic). To see a full list of changes or to read the Act, please see the Long Service Leave Act 2018 (Vic).

Entitlement for Long Service Leave (LSL)

While under the old legislation an employee was able to take LSL after 10 years, now employees can take LSL at any time after completing 7 years of continuous employment with one employer. This Act has been implemented to establish more flexible, simplified and fairer provisions for those trying to access their LSL entitlements.

The entitlement remains the same at 1/60th of the employee’s continuous service. Business Victoria has a long service leave calculator if you would like to know how much leave you or your employees are entitled to.

Taking Long Service Leave

Previously, LSL had to be taken in one period, unless there was a prior agreement made to take it over three periods.

The new Act allows employees to take LSL in multiple periods of one day or more if agreed between the employee and employer. Employers may only refuse a request for LSL when there are reasonable business grounds to do so.

Continuous Employment

Under the 1992 Act if an employee took more than 12 months unpaid parental leave they lost continuity of service and any accrued long service leave entitlements. Now continuity of service will not be broken by any period of paid or unpaid parental leave and LSL will accrue on your employee’s first 52 weeks of unpaid or paid parental leave.

The following types of absences will not break “continuous service” under section 12 of the Act:

  • In the case of casual or seasonal employee, parental leave of up to 104 weeks
  • In the case of casual or seasonal employee, unpaid parental leave that is not longer than 104 weeks
  • All carer’s leave
  • All leave on account of illness or injury
  • Any other form of leave provided for and taken under the relevant employment agreement
  • If an employee is re-employed within 12 weeks of their dismissal or resignation
  • Any period of stand down

 

Penalties

New penalties are now in effect. Penalties for a body corporate for failing to pay LSL are increased from 20 penalty units ($3171.40) under the 1992 LSL Act to 60 penalty units ($9514.20) under the 2018 Act. Criminal penalties rather than civil penalties will now apply for taking adverse action against an employee because s/he is entitled to LSL.

It is also an offence to allow a payment in lieu of LSL (other than on termination of employment). Cashing out of LSL is now prohibited under the Act.

Key Messages to employers

  • Time to dust off any policies and procedures, and ensure all LSL entitlements are correct and are in accordance with the new Act. It is also important to ensure your employment contracts, practices and payroll systems are compliant.
  • Make sure to keep copies of all records that are relevant to an employee’s entitlement for LSL. This will ensure that entitlements are correctly calculated, and you can defend any claims if required.

 

We urge all businesses to ensure they are up to date on their obligations. There are a wide range of free resources available on the Fair Work website or chat to one of our Inspire HQ HR Experts today.

Caleb is a Human Resources Graduate who works with Inspire HQ to help deliver high quality and professional HR & Recruitment services. His friendly, helpful and approachable style tailored with his can-do attitude will help you and your business achieve the best outcomes possible. He holds a Bachelor of Business in Human Resources from Federation University Australia.

Disclaimer: The material contained in this publication is of a general nature only. It is not, nor is intended to be, legal advice. If you wish to act based on the content of this publication, we recommend that you seek professional advice.

 

Resources:

  1. http://www.business.vic.gov.au/calculatelongserviceleave
  2. http://www.legislation.vic.gov.au/Domino/Web_Notes/LDMS/PubStatbook.nsf/f932b66241ecf1b7ca256e92000e23be/04AC416C0C9CE8EBCA25828E000FECB2/$FILE/18-012aa%20authorised.pdf

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