The importance of work/life balance is widely acknowledged by employers and employees alike.  Giving workers a chance to renew their energies through periodic leave entitlements encourages productivity and, often, an ongoing commitment to the workforce.  Most Australian States and Territories support this balance through legislative provisions in relation to long service leave (‘LSL’) entitlements. 

 The idea of long service leave derives from colonial civil service administration in South Australia and Victoria in the 1860s. After ten years of service to the colonies, British civil servants were legally permitted six to twelve months of paid leave to return home and visit their families. The idea stuck, with the other states later following suit and LSL entitlements progressively evolving to reflect the nature of the workforce that exists today.

 In Victoria, the Long Service Leave Act 1992 (Vic) was recently amended, with reforms taking effect on 1 January this year. The Long Service Leave (Amendment) Act 2005 (Vic) (‘the Act’) gives those Victorians whose long service leave entitlements are not covered by an award, certified agreement or AWA arguably more generous entitlements in relation to long service leave.  While the Act does not increase LSL entitlements, it does offer more generous provisions in relation to the accruing of leave by taking into account various factors and circumstances that, up until now, may have disadvantaged employees.  The stated purposes of the Act are to make the law relating to long service leave more consistent with modern working practices as well as other Australian jurisdictions, and to ensure that employees who take leave for family reasons are not disadvantaged (section 1 of the Act).

 The main provisions under the Act are as follows:

• Employees will be entitled to take long service leave after 10 years of continuous employment with one employer (to be phased in using a formula under the Act), calculated on a pro-rata basis
• The formula for LSL is one week per 60 weeks of employment, entitling an employee to approximately 8.66 weeks of long service leave after 10 years, or 13 weeks after 15 years of service
• Pro-rata LSL entitlements are available on termination of employment after 7 years (previously 10 years), regardless of the reason for termination
• Long term casuals and seasonal workers are included in the definition of employee
• All forms of paid and unpaid leave, except unpaid parental leave, will count as service for the purposes of calculating LSL
• Continuity of service is preserved while on unpaid parental leave (of up to 52 weeks)
• Public holidays falling within the leave period are now added to the leave period
• Where employee’s hours vary and there is no ‘ordinary pay’, the Act prescribes that LSL be paid on the higher rate of pay calculated on either the average pay over the last 12 months or the average over the last five years (section 11)
• Directors can be prosecuted for offences under the Act, such as cashing out long service leave

 The amendments arguably bring LSL entitlements more within reach of the modern employee, providing a fairer and more attainable entitlement for long term service.

More information

From the LIV Bookshop Work Choices Bill & Explanatory Memorandum, $66