On 1 November 2018, the Long Service Leave Act 2018 (2018 Act) comes into operation, replacing the current Long Service Leave Act 1992 (Vic) (1992 Act) which will be repealed.

The Long Service Leave Act 2018 (Vic) (2018 Act) will take effect on 1 November 2018. The 2018 Act will replace the Long Service Leave Act 1992 (Vic) (1992 Act) and will introduce a number of changes to the long service leave system in Victoria.

Some of the main changes are as follows.

Entitlement to take long service leave after 7 years

Under the 1992 Act, there was an entitlement to payment of accrued long service leave, where the employment ended after 7 years of continuous service.[1] However, an employee could only take accrued long service leave as a break from work, where they had completed 10 years of continuous service.[2]

Under the 2018 Act, employees are entitled to take accrued long service leave after completing 7 years of continuous employment with one employer, even if their employment hasn’t ended.[3]

Taking long service leave in more than one period

Under the 1992 Act, long service leave was required to be taken in one period, unless the employee and the employer agreed that the first 13 weeks of leave could be taken in 2 or 3 separate periods.[4]

Under the 2018 Act, leave may be taken in periods not less than one day.[5]

Continuity of employment

There are various provisions in the 2018 Act that will impact when employment is considered to be continuous, for the purposes of an employee’s entitlement to long service leave.

Under the 2018 Act, a period of unpaid parental leave will count towards the employee’s period of service (up to 52 weeks)[6]. Any period beyond 52 weeks will not count towards the period of service, however, it will not break the continuity of the employment.[7] Under the 1992 Act, any period of unpaid adoption, maternity or paternity leave was not counted as part of the period of an employee’s employment.[8]

Under the 1992 Act, an employee’s service was considered continuous where the employee was dismissed and re-employed within 3 months.[9] The 2018 Act will recognise continuous service where the employee is dismissed by the employer or where the employee resigns, and the employee is re-employed within 12 weeks.[10]

Like the 1992 Act, for the purpose of determining whether the employee’s service is considered to be with one employer, the 2018 Act makes reference to an employee performing duties in connection with an “asset” that is transferred to another employer. However, the definition of “asset” has expanded to include both tangible and intangible assets.[11]

Changes in hours of work

Under the 2018 Act, where an employee’s hours of work change during their employment, or where they do not have fixed hours of work, the rate of pay for their long service leave entitlement will be calculated at the highest average over the previous 52 weeks, 260 weeks or the entire period of the employee’s continuous employment.[12] Under the 1992 Act, the employee’s ordinary pay was the higher of the average weekly rate over the previous 12 months or 5 years only.[13]

Breaches and penalties

Criminal penalties apply under the 2018 Act.

The penalties which apply for certain offences are:

  • 12 penalty units (or $1,934.28) for a natural person; and
  • 60 penalty units (or $9,671.40) for a body corporate.

These penalties can be imposed for each day that an offence continues, in certain circumstances.

The 2018 Act also introduces certain new offences, including if an employer takes “adverse action” against an employee because the employee has, or seeks to exercise, an entitlement under the 2018 Act.[14]

Updates in portable long service leave in Victoria

The Long Service Benefits Portability Act 2018 (Vic) (Portability Act) has been passed by the Victorian Parliament, and will come into operation by 1 July 2019. The Portability Act will introduce portable long service leave for eligible workers in the contract cleaning, security and community services industries.

Under the Portability Act, an employee’s entitlement to long service leave will continue to accrue while the employee works in a covered industry, despite changing employers.[15] Businesses that employ workers covered by the Portability Act will be required to register with the Portable Long Service Benefits Authority,[16] and pay a levy which will fund the scheme.[17]