The changes you need to know about long service leave in Victoria

All Victorian employers need to be aware of the significant changes to long service leave (LSL) entitlements to commence by 1 November 2018.

The Long Service Leave Act 2018 (Vic) (Act) which received Royal Assent on 15 May 2018, will repeal and replace the Long Service Leave Act 1992 (Vic) (1992 Act) and impact on the entitlements of all employees in Victoria, unless they are specifically excluded from the operation of the Act.

In announcing the Act, the Minister for Industrial Relations, Natalie Hutchins, stated:

“the new LSL laws are a huge win for women, parents and carers across Victoria. No one should be penalised for spending more time at home when their kids are born or for changing their working hours to look after a loved one.”

We have summarised the significant changes to the LSL entitlements below:

IssueCurrent lawChanges to the law
Taking of leave
Entitlement to LSLAn employee is entitled to take LSL after 10 years of continuous service with one employer.

If an employee’s employment ends after 7 years of continuous service with one employer, the employee is entitled to a pro rata payment of their LSL entitlement.
An employee is entitled to take LSL after 7 years of continuous service with one employer.
Flexibility in LSL periodsLSL must be taken in one period, except where there is an agreement between the employer and employee for separate periods. If an agreement is reached, the first 13 weeks of LSL must be taken in 2 or 3 separate periods, and any subsequent LSL may be taken in two separate periods. An employee is entitled to request LSL for a period of not less than 1 day, where an employer must grant an employee’s request to take LSL as soon as practicable after receiving the request unless there are reasonable business grounds to refuse.
Continuity of employment
Unpaid parental leaveAny period of unpaid parental leave will not count towards calculating an employee’s period of continuous service.Any period of unpaid parental leave up to 52 weeks will count as service, where any period beyond 52 weeks will not count as service but will not break continuity of employment.
Business transfersIf an employer’s business assets transfer to a new employer, an employee who performs duties in connection with the assets is treated as being employed by ‘one employer’.

However, this only applies to tangible assets such as land, plant and equipment.
The definition of ‘assets’ has been amended to include both tangible and intangible assets.
Employment ending by resignation or terminationThe employment is to be regarded as being continuous despite being dismissed at the initiative of the employer, but only if the employee is re-employed within a period not exceeding 12 weeks after the dismissal.The employment is taken to be continuous despite an absence from work caused by termination of the employment at the initiative of the employer or the employee (ie resignation), if the employee is re-employed by the employer within 12 weeks after cessation of employment.
Calculation of leave
Change of hoursIf an employee’s working hours have changed during the last 12 months immediately before taking LSL, the employee’s normal weekly number of hours is the greater of: the average weekly hours worked over the past 12 months or 5 years. If an employee’s working hours have changed during the last 104 weeks (2 years) immediately before taking LSL, the employee’s normal weekly number of hours is the greater of: the average weekly hours worked over the past 52 weeks (1 year), 260 weeks (5 years) or the last period of continuous employment.
Operation and enforcement
Ability to seek exemptionEmployer may apply to the Industrial Division of the Magistrates’ Court to be exempted from complying with the provisions in the 1992 Act.The employer’s right to apply for an exemption is abolished (although the existing exemptions remain in force).
Powers of authorised officersThere is currently no specific power for a departmental officer to request information or documents.The Secretary may appoint a person as an authorised officer and give them the power to request information or documents from persons (eg employers).
Penalties
Type of penaltyAn employer who:

  1. fails to notify an employee of any modifications or removal of an employee’s entitlements under the 1992 Act, or

  2. terminates an employee’s employment for the employee’s exercise of their rights under the 1992 Act,

    may be ordered to pay civil penalties.
The civil penalties have been abolished under the Act, where any offences will now attract a criminal penalty.
Criminal penaltiesFor a number of offences (eg payments in lieu of LSL), the penalty is 20 penalty units.

The exception to this is the offence relating to an employee working while on long service leave, which attracts a penalty of 5 penalty units for breach by an employee and/or an employer.
For these offences, the penalty has now been amended to:

  1. 12 penalty units in the case of a natural person and

  2. 60 penalty units in the case of a body corporate.

Taking adverse action against an employee due to the entitlement of LSL may result in a penalty of:

  1. 12 penalty units in the case of a natural person and

  2. 60 penalty units in the case of a body corporate,

    for each day during which the offence continues.

An employer found guilty of an offence may also receive a criminal record.

We note that long service leave regime in Victoria seems to be a focus for the Victorian government, as seen with the introduction of the Long Service Benefits Portability Bill 2018 (Vic) (Bill) which introduces portable long service leave for certain industries. We refer you to our update dated 10 April 2018 on the effects of the Bill.

The Bill has passed the Legislative Assembly and it is currently being debated in the Legislative Council. We will keep you updated on the progress of the Bill.


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