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Long Service Benefits Portability Regulations 2020

Libby Pallot, Walter MacCallum, Anthony Massaro, Ben Tallboys, Abbey Burns, Caitlin Walsh, Caitlin Meers, Natasha Sim, Morgan Smithe & Ellena Kouris

The average reading time for this Alert is 4 minutes.

As of 1 October 2020, the Victorian Portable Long Service Scheme will introduce new eligibility criteria for employers and their employees. The Scheme’s new regulations ensure greater certainty for employers within the community services sector, but they also expand the coverage of the scheme.

The Victorian Portable Long Service Scheme commenced on 1 July 2019, in accordance with the Long Service Benefits Portability Act 2018 and the Long Service Benefits Portability Regulations 2019 (Regulations). The Scheme is administered by the Portable Long Service Authority, and allows workers engaged in community services, contract cleaning and security to access long service leave benefits despite transferring between workplaces.

In November 2019, apparently in response to a range of concerns and inconsistencies raised by employers and employee groups, the regulations were replaced by the Long Service Benefits Interim Portability Regulations 2019 (Interim Regulations), with the promise that updated regulations would be provided by late 2020.

The Scheme’s updated regulations came nto operation on 1 October 2020. Most significantly, the Long Service Benefits Portability Regulations 2020 (2020 Regulations) do not import the ‘predominance test’ in relation to community services employees. The Regulations and the Interim Regulations provided that an individual was a community services employee if the predominant activity of their role was the personal delivery of services or the personal performance of community service activities. This included both employees who performed front-line work with clients, and employees who, at an organisational level, provided support to those who delivered front-line services.

The 2020 Regulations instead now provide that an individual will not be considered a community services employee unless they are engaged under:

  • the Social, Community, Home Care and Disability Services Industry Award 2010;
  • the Children's Services Award 2010;
  • the Educational Services (Teachers) Award 2020;
  • the Labour Market Assistance Industry Award 2020;
  • the Supported Employment Services Award 2020.

By replacing the predominance test, the 2020 Regulations expand the scope of the scheme, but provide a greater degree of certainty for employers. However, for some employers covered by different awards this may mean some of their employees are covered by the scheme and others are not. For example, for employers operating in aged care, employees who fall under the Aged Care Award 2010 will be excluded, however home care workers employed under the SCHDSI Award will be covered.

Importantly, an individual is taken to be employed under an award even if an enterprise agreement or an agreement based transitional instrument applies. Further, the 2020 Regulations ensure that individuals who, at an organisational level, support, supervise or manage front-line work remain included within the Scheme, as those workers are generally covered by the SCHDSI Award.

The Public Long Service Authority is yet to publish supplementary information to guide employers in complying with the new regulations, although the website has been updated. In particular, the Authority has not clarified what will happen to levies already paid to the Authority in respect of employees who will no longer be eligible under the 2020 Regulations. However, the Authority has indicated that the 2020 Regulations will not operate retrospectively. This means that employers will not need to provide backdated payments, and will not be considered non-compliant throughout the operation of the Interim Regulations unless they already fell within the scope of the Interim Regulations.

The 2020 Regulations will cause significant changes to the applicability of the Victorian Portable Long Service Scheme. In light of the significant penalties for non-compliant employers, we recommend that you seek tailored advice to clarify your obligations.

How we can help

For advice on the Victorian Portable Long Service Scheme or if your organisation wishes to review its leave accrual practices, please contact Libby PallotAnthony Massaro or Russell Kennedy’s Workplace Relations, Employment and Safety team.

If you would like to stay up-to-date with Alerts and Insights from our expert Workplace Relations, Employment and Safety team, you can subscribe to our mailing list here.

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