New Long Service Leave Act 2018

Effective 1 November 2018 a new Long Service Leave Act will come into effect called the Long Service Leave Act 2018, replacing the 1992 Act.  Long Service Leave is an entitlement for all employees and a review of the 1992 Act found it no longer met the requirements of our diverse workforce and was often difficult to interpret.

What has changed?

• The new Act is more flexible for women, families and those transitioning into retirement.
• Previously, you could apply for Long Service Leave after 10 years of continuous service.  The 2018 Act now allows employees to apply for leave after 7 years.
• Employees can take leave in smaller increments i.e. a minimum of one day per occasion.
• Certain absences from work including unpaid parental leave will not break continuous employment.
• Larger penalties apply for employers who do not keep adequate records or do not produce them when requested.

**It is important to note the fundamentals of the entitlement have not changed.  

Who does this effect?

Most Victorian employees are entitled to Long Service Leave in agreement with the Long Service Leave Act.  However, some employees may have a different arrangement if covered by an Enterprise Bargaining Agreement for example.  If you are uncertain or would like further clarification, please call Key Business Advisors on 1300 4 ADVICE.

Casual and fixed term contract employees are also covered by the Long Service Leave Act.  The employee’s employment must be continuous as outlined in the new Long Service Leave Act 2018.

When and how do I take Long Service Leave?

An employee can now request to take long service leave after 7 years of continuous employment.  One of the biggest benefits for employees under the new Long Service Leave Act is they can access a minimum period of leave for a single day.

An employer can only refuse the request on reasonable business grounds – reasonable Business Grounds is defined in the Long Service Leave Act.

What do these changes mean for calculating Long Service Leave?

Currently, if the employee changes their hours of work immediately before taking Long Service Leave it would be calculated at the average over the previous 12 months or 5 years – whichever is greater.  The 2018 Act will have a third option available – averaging the hours over the full period of continuous employment.  The employee will be entitled to the greater of the 3 averages.

Within 12 weeks of termination.

If an employee is re-deployed by the employer within 12 weeks of termination, their employment will be viewed as continuous under the Long Service Leave Act 2018.

What do these changes mean for me as a business owner?

Under the 1992 Act, businesses could refuse to show employment records to departmental officers.  Under the new Act, a request or requirement to produce employment records must be complied with and failure to do so is a criminal offence.  The penalties for breaching the Long Service Leave Act has increased ranging from $1,934 up to $9,671.

Now is the time to update any systems, records and policies that are relevant to Long Service Leave to ensure your employee entitlements and calculations are correct for 1 November 2018.   This Act comes into effect from 1 November 2018 without a provisional period.  You will need a strategy on how to manage any requests from employees who can access Long Service Leave from this date.

Contact us on 1300 4 ADVICE to discuss the changes, how they effect your employees and what this means to your business.