In what may come as a surprise to many employers, a WA court has ruled that a worker engaged by a company in the UK almost 30 years ago is entitled to 23 weeks' long service leave under state legislation because he was ultimately transferred to an associated entity in Australia.

Many employers presume that long service leave does not accrue in the case of overseas service as it is not a common employment condition in overseas jurisdictions. However, the decision in Martin Venier v Baker Hughes Australia Pty Ltd [2016] WAIRC clarifies that continuous service with related entities (as defined in section 50 of the Corporations Act 2001 (Cth)) will count as service for the purposes of calculating an employee's long service leave entitlements in Western Australia.

Mr Venier claimed he had been employed by Baker Hughes Australia Pty Ltd and its related entities from November 1988 until July 2015. Since commencing employment in the UK, he had worked for various divisions and related bodies corporate of Baker Hughes throughout the UK and China, until finally assuming a position in Western Australia.

Prior to commencing the position, Mr Venier entered into an employment contract with Baker Hughes, which provided that he was entitled to long service leave under the Long Service Leave Act 1958 (WA) (LSL Act).

The LSL Act provides for 8.66 weeks of long service leave after 10 years' continuous employment with one and the same employer, and 4.33 weeks for each five years' continuous service thereafter. It also provides pro-rata entitlements on termination of employment after seven years.

Mr Venier claimed he was entitled to 23 weeks' long service leave, based on his 26.64 years of continuous service with Baker Hughes and its related body corporates, as he had been employed by one and the same employer for the duration of his employment.

The company denied the entitlement, claiming Mr Venier failed to reach the requisite continuous service threshold in his employment with the Australian entity between November 2008 and July last year. Baker Hughes also argued that Mr Venier was seeking too broad an interpretation of the "related company" provisions in the LSL Act and that his previous service with various Baker Hughes entities prior to July 2008 did not count towards long service leave.

However, the Industrial Magistrate said the language of the key provisions of the LSL Act, having regard to the history and purpose of the Act, requires the phrase "one and the same employer" to be construed to contemplate employment with related body corporates.

He said that "denying long service leave to long serving employees of related entities is inconsistent with the historical application of the LSL Act and is inconsistent with the stated purpose of the amending legislation".

He found that Mr Venier had worked for "one and the same employer for the purposes of calculating long service leave entitlements under section 8(1) of the LSL Act" and was therefore entitled to the 26 weeks' long service leave. He ruled on the "one and the same employer" argument as a preliminary issue and is yet to finalise the case.

Given the nature of Australia's increasingly mobile workforce, with employees often transferring between related entities within Australia and internationally, this case shows it is important to understand in what circumstances continuity of employment will attach to transferring employees.

In particular, employers in Western Australia need to be aware that an employee's prior service with related body corporates both here and abroad may count as service for the purpose of calculating long service leave entitlements.