New legislation regarding long service benefits for certain industries

Last month, the Victorian Parliament introduced new legislation which provides enhanced long service leave benefits for workers in the community services, contract cleaning and security industries.

The Long Service Benefits Portability Bill 2018 (Bill) establishes a scheme allowing long service leave (LSL) to be accrued for workers in these industries, after seven years of service, even if they have worked for different employers during this period.

Currently, the Long Service Leave Act 1992 (Vic) provides for the accrual of LSL benefits in the event of a business transfer. It does not address the situation where a contract is terminated and results in a worker commencing employment with a new employer, even though the worker is essentially in the same role. Practically, this means the worker will lose continuity of work and therefore not meet the minimum period of seven years with the ‘one’ employer to receive long service entitlements.

The proposed scheme establishes a new statutory authority, which will be responsible for managing the portable scheme. The Bill sets out detailed descriptions of the type of work covered in the community services, contract cleaning and security industries, where employers in a covered industry are then required to register themselves and their employees and contractors. The Bill imposes financial penalties for failing to register, where individuals face a fine of $1,260 and bodies corporate a fine of $6,300, for each day an offence is committed.

Further to this, the Bill does not allow for a contract of employment, or agreement of any kind, to ‘contract out’ any of its provisions. For a number of offences included in the Bill (eg failing to register, failing to provide quarterly reports, payment of levies, etc), the Bill includes an accessorial liability provision which imposes criminal liability on officers of a company if they authorise, permit or were involved in the commission of any of the offences.

Employers in the community services, contract cleaning and security industries should consider the possible application of the Bill, in the event it is passed, and its effect on their businesses. We will provide further updates as the Bill progresses.