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Long service leave amendments in Victoria to target flexibility

Libby Pallot, Anthony Massaro, Ben Tallboys, Abbey Burns and Caitlin Walsh

The Victorian Government has introduced a Bill to amend the Long Service Leave Act 1992 (Vic), improving flexibility for employees and addressing some of the Act’s historical quirks.

When the amendments come into effect, the Act will:

  1. Allow employees to take leave one day at a time.
  2. Allow employees to take leave after seven years’ service (instead of after ten years’ service).
  3. Treat parental leave the same as other forms of leave, so that it counts toward the accrual of long service leave.
  4. Make it harder for employees to lose long service leave entitlements in a transfer of business scenario by including situations where the transfer involves the transfer of intangible assets.
  5. Change the rules surrounding the calculation of leave when employees changes their hours of work, by allowing hours to be averaged over the entire period of the employment.
  6. Allow casual and seasonal employees to be absent for up to two years on parental leave without breaking an employee’s period of service for the purpose of long service leave.
  7. Improve consistency and equity surrounding termination and rehiring of employees.
  8. Give authorised officers the power to demand employment records, aiding in the enforcement of the Act.
  9. Change penalties for contraventions of the Act.
  10. Remove the right of employers to seek exemptions from compliance with the Act.

The Bill amending the Act is unlikely to pass through Parliament in the remaining sitting days before the end of the year.  However once passed, the changes are scheduled to take effect from 1 June 2018 (unless specified otherwise).

What this means for employers

When the Fair Work Act 2009 (Cth) was introduced, it was anticipated that the Commonwealth Government would introduce a national long service leave scheme.  However, there is no indication that this will occur in the near future. 

While a Senate Committee recommended in February 2016 that a national scheme be implemented, the Coalition members of the Committee wrote a dissenting report to the effect that the State systems functioned well, and the cost of moving to a national system was not warranted.  Accordingly, we can assume that the Victorian system will remain in place for the foreseeable future.

While many of the proposed changes to the Long Service Leave Act 1992 (Vic) reflect common workplace practices, the changes around calculation and continuous service may mean that:

  • some employees will be entitled to long service leave when previously they were not; and
  • the value of an employee’s entitlement may increase.

On that basis, if Parliament passes the Bill to amend the Act then employers should promptly consider whether the changes have an impact on their long service leave obligations (and associated financial liabilities).

We will provide an update prior to the commencement of any amendments to the Long Service Leave Act 1992 (Vic).  In the meantime, if you have any questions in relation to long service leave, or any other terms and conditions of employment, please contact Russell Kennedy’s Workplace Relations, Employment and Safety Team.

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