The amount of long service leave an employee can accrue has not changed and:
- after ten years of continuous employment with the same employer, eligible employees are entitled to 8.667 weeks leave (or payment in lieu);
- after the first ten years with the same employer, 4.333 weeks for every additional five years of service (or payment in lieu); and
- when employment ends after at least seven years of continuous employment, the employee is entitled to be paid pro-rata amount of LSL that they have accrued (provides that the employment was not ended due to the employee’s serious misconduct).
However, the classes of employees to whom long service leave entitlements apply has been clarified and now specifically includes casuals and seasonal workers and apprentices.
The method of calculating continuous service and for calculating ordinary pay for all classes of employees has been refined by the amendments.
Improved Flexibility for taking Long Service Leave
The amendments will permit employees to take their long service leave in separate periods of any length and will also permit employees to request to take long service leave at half pay for double the length of time.
Buy Out and Cashing Out of Long Service Leave
The rules around buying out and cashing out long service leave will be tightened.
The amendments will enable employers and employees to reach an agreement for long service leave to be cashed out, but that agreement cannot be reached until the long service leave entitlement has accrued.
Further, buying out long service leave by way of a loading or incremental payment is unlikely to be considered adequate compensation for forgoing long service leave under the amendments. The employee must be paid at least the amount they would have received, had they taken the long service leave and the amount must be separately identifiable.
Transfer of Business
The circumstances in which the long service leave liability for employees in sale of business transitions is transferred to the new employer have been brought into line with the transmission of business provisions in the Fair Work Act.
Record Keeping Requirements
Record keeping requirements have widened to include keeping details for each employee of:
- the employer’s name and ABN number;
- the date of any transfer of business;
- the weekly hours worked by each employee;
- details of any cashing out of long service leave.
Penalties Significantly Increased
The penalties for breaching the Long Service Leave Act have significantly increased. The penalties are:
- up to $13,000 (or up to $130,000 in the case of a serious contravention) for individuals; and
- up to $65,000 (or up to $650,000 in the case of a serious contravention) for bodies corporate.
These penalties can be levied contraventions of the record keeping requirements as well as for failure to pay long service leave.
Snapshot of Changes
This is just a snapshot of the changes. Please do not hesitate to contact us at Panetta McGrath if you would like further information.
