We have received many questions from Members about employees taking long service leave during the COVID-19 pandemic. Check out our answers to the most common enquiries.
The following content is based on information availableat the time of publishing.
Due to the COVID-19 pandemic many employers and employees are looking at methods to help the business endure the crisis. One approach is for a worker and the employer to agree to take a paid form of leave such as annual leave or long service leave (LSL).
Due to the COVID-19 pandemic many employers and employees are looking at methods to help the business endure the crisis. One approach is for a worker and the employer to agree to take a paid form of leave such as annual leave or long service leave (LSL).
The ability of LSL to be taken before it has been accrueddepends on the provisions of the relevant industrial instrument. In Victoria, for example, the Long Service Leave Act 2018allows for the employer and employee to agreeon taking LSL being taken before it is due. Please see the table below for all jurisdictions.
Where legislation permits the taking of LSL in advance there are provisions which allow the employer to recovermonies paid for leave taken in advance.
This means that if the LSLtaken in advance is greater than the employee's entitlement owed to them on termination, then the employer may deduct the difference from any monies owed.
The following table outlines thedifferent LSL provisions across Australia for:
| Taking of LSL before it is due and if excess amount can be deducted on termination | ||
|---|---|---|
|
Jurisdiction & Legislation |
Can LSL be taken in advance? | Deduct excess entitlement on termination? |
|
ACT Long Service Leave Act 1976 |
Not provided for |
Not provided for |
|
NSW Long Service Leave 1955 |
Yes, LSL canbe granted by agreement in advance. However, ‘Section 15A COVID-19 pandemic – special provisions’ allows for a period of leave in advance that is less than one month if the worker agrees. This section has effect for 6 months after commencement or not more than 12 months after the commencement if prescribed by regulations. |
Yes (Section 4(5)(c)). On termination, if the entitlement is less than the leave already taken in advance, the employer may take from any remuneration payable an amount to cover the excess leave granted. |
|
NT Long Service Act 1981 |
Not provided for |
Not provided for |
|
QLD Industrial Relations Act 2016 |
Not provided for |
Not provided for |
|
SA Long Service Leave Act 1987 |
Yes (s 7(6)). By agreement, LSL can be taken "in anticipation of the entitlement to leave accruing to the employee". |
Yes (s 7(6)(b)). If upon termination an employee has not accrued the leave granted in advance, an employer can deduct the shortfall from any remuneration payable. |
|
TAS Long Service Leave Act 1976 |
Not provided for |
Not provided for |
|
VIC Long Service Leave Act 2018 |
Yes (s 8), the employer and employee may agree on LSL being taken before it is due. |
Yes (s 8(3)). If an employee takes LSL before they are entitled to the leave, and their employment ends, the employer may deduct from any payment due to the employee on termination of employment, an amount equal to the LSL paid in advance. |
|
WA Long Service Leave Act 1958 |
Yes (s 10(1)). An employer may by agreement with an employee allow leave before it has accrued. Where leave is taken in such a case, the employee shall not become entitled to any further long service leave until the expiration of the leave taken has accrued. |
Yes (s 10(2)). Where leave has been granted in advance to an employee, and the employment is terminated, the employer may deduct from whatever remuneration is payable upon the termination of the employment such amounts owing which the employee has been granted long service leave. |
The Long Service Leave (LSL) Provisions Summary contains information about long service leave entitlements on termination across pre-modern awards and state and territory legislation. Some of this information has been extracted below:
No payment on termination prior to 10 years’ service. For 10-15 years’ completed service, payout is pro rata unless the employee is terminated for serious and wilful misconduct. After 15 years’ service, payout is based on completed years of service.
Pro rata payout after 5 years on termination by the employer for any reason other than serious and wilful misconduct or termination by the employee on account of illness, incapacity, domestic or other pressing necessity.
Victoria
Payout in full on termination for any reason with at least 7 years’ service.
Pro rata payout after 7 years’ service on termination by the employer for any reason other than conduct, capacity or performance, or where the employer unfairly dismisses the employee. Payout after 7 years’ service on termination by the employee on account of illness, incapacity, domestic or other pressing necessity.
Pro rata long service leave payout in full on term when at least 7 years’ service but less than 10 unless termination is due to serious or wilful misconduct.
Payout after 10 years’ service. Pro rata payout after 7 years’ service on termination by the employer for any reason other than serious and wilful misconduct or termination by the employee on account of retirement, illness, incapacity, domestic or other pressing necessity after at least 7 years’ completed service.
Pro rata leave after 7 years where employment is terminated for any reason other than serious misconduct.
Pro rata leave on termination between 5-7 years on termination by the employer for any reason other than serious and wilful misconduct or termination by the employee on account of illness, incapacity, domestic or other pressing necessity or on the employee attaining the age of 65. Payout on termination for any reason after at least 7 years’ service.
Pro rata leave after at least 7 years but less than 10 years’ service if terminated by the employer for any reason other than serious and wilful misconduct or if the employee reaches retirement age or if terminated by the employee on account of illness, incapacity, domestic or other pressing necessity. After 10 years’ service, payment limitations might apply where the termination was by the employer for serious misconduct.
NSW has been the only jurisdiction so far to amend their LSL legislation to address the COVID-19 pandemic. TheLong Service Leave Act 1955(NSW) (the Act) was amended on 25 March 2020 and 14 May 2020 to include special provisions that provide marginally more flexibility in the way LSL can be taken during the COVID-19 pandemic. These amendments are temporary, and will only apply for six months from the date of commencement, unless a later date is prescribed in the regulations.
The new special provisions modify the Act in four ways:
Normally where an employee has accrued a period of LSL, the Act states that the leave must be taken in one continuous period, unless the employer and employee agree to break the leave into a limited number of separate periods (for example where an employee has accrued two months’ LSL following 10 years of service, the Act states that the leave can be taken in a maximum of two separate periods).
The Act now provides where an employer and employee agree, the number of periods of leave that can be taken is not limited, and each separate period can be a minimum of one day.
Granting LSL in advance has been similarly amended. Previously when an employer and employee reached agreement to take a period of LSL before the employee was entitled to the leave, the period of LSL in advance was required to be of at least one month. The special provisions allow this period to be less than one month.
Anticipated expiry date: 13 November 2020.
Granting LSL in advance has been amended in a similar way to accrued leave.
Previously when an employer and employee reached agreement to take a period of LSL before the employee was entitled to the leave, the period of LSL in advance was required to be of at least one month. The special provisions allow this period to be less than one month.
Anticipated expiry date: 24 September 2020
Normally the Act requires that a period of LSL requires at least one month’s notice, even where there is agreement between the employer and employee. The special provisions now permit an employer, with the agreement of the employee, to give less than one month’s notice of taking LSL.
Note that the amendments do change the way that an employee make take already accrued leave. In other words, an employee that has 10 or more years’ service and has not taken their accrued entitlements is still required to take that LSL in a single continuous period unless an agreement is reached to take the leave in two periods (or where the employee has at least 15 years’ service up to three periods).
Anticipated expiry date: 24 September2020.
Under theFair Work Act 2009, entitlements such as annual leave and personal/carer’s leave already continue to accrue during a period of stand down without pay. TheLong Service Leave Act 1955has been amended to clarify that if an employee is stood down without pay, they will also continue to accrue LSL.
Anticipated expiry date: 12 September2020.
For assistance with LSL or any other workplace matter, Ai Group members cancontact usorcall the Workplace Advice Line on 1300 55 66 77.
More Coronavirus (COVID-19) advice and resources can also be found at Ai Group'sdedicated webpage. Specific COVID-19 HR Resource Centre and Health & Safety Resource Centre content to assist memberscan be foundhere.
OurLong Service Leave Handbook, in loose-leaf format, is here to help employers navigate and understand the various long service leave entitlements under modern awards and legislation across Australia.
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Clinton is the Publications Manager at Ai Group. He is responsible for a number of key services including Annotated Modern Awards, Workplace Relations Handbooks and the management of Ai Group’s HR and Health & Safety Resource Centres. Clinton has a Masters in Employment Relations and previously held advisory roles with the Workplace Authority and Fair Work Ombudsman.
