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Introduction to the new Long Service Leave Act 2018 (Vic)

May 30, 2018
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By  Chao Ni, Senior Associate, MST Lawyers      

The Victorian parliament has passed the Long Service Leave Act 2018 (Vic) (LSL Act 2018), which will repeal the Long Service Leave Act 1992 (Vic) (LSL Act 1992).

 The following key changes to long service leave rules will take effect on 1 November 2018 (unless proclaimed earlier by the Victorian Government):

  • Employees will be entitled to take long service leave after completing 7 years’ continuous employment (section 6 of the LSL Act 2018) instead of 10 years.
  • If the ownership of a business employing an employee changes but the employment of the employee continues, the new owner must not refuse to provide the employee any long service leave to which the employee is entitled, including long service leave which is accrued before the change of ownership (section 11(3) of the LSL Act 2018).
  • Where employment is outsourced, the second employer must recognise the employee’s completed service with the first employer (section 11(9)-(10) of the LSL Act 2018).
  • The definition of “assets” has been expanded to capture all tangible and intangible assets and will accordingly capture all transfer of asset arrangements for the purpose of ensuring continuity of service for transferring employees (section 11(12) of the LSL Act 2018).
  • The following types of absences will not break “continuous service” (section 12 of the LSL Act 2018):
    • all periods of parental leave (other than in the case of a casual or seasonal employee)
    • in the case of a casual or seasonal employee, parental leave of up to 104 weeks
    • in the case of a casual or seasonal employee, unpaid parental leave that is not longer than 104 weeks
    • all carer’s leave
    • all leave on account of illness or injury
    • any other form of leave provided for and taken under the relevant employment agreement
    • if an employee is re-employed within 12 weeks of their dismissal or resignation
    • any period of stand down·                    
  • The following periods of absence referred to in section 12 of the LSL Act 2018 are taken to be periods of employment when calculating the length of an employee’s period of continuous employment (section 13 of the LSL Act 2018):
    • all paid leave periods
    • if a period of unpaid leave is less than or is 52 weeks, that period
    • if a period of unpaid leave is more than 52 weeks, the initial 52 weeks
    • if a period of unpaid leave is more than 52 weeks, the entire period of unpaid leave if the period of absence is taken to be a period of employment:
      • in accordance with the relevant employment agreement
      • by written agreement between the employee and the employer
      • if the leave is taken on account of illness or injury
    • All periods of absence arising from an interruption to, or termination of, employment caused by the employer with the intention of avoiding an obligation in relation to long service leave
    • All periods of absence arising from the transfer of assets from one employer to another, if the employee usually performs duties which are connected with those assets
  • If ordinary time rate of pay is not fixed for an employee’s work under the relevant employment agreement, the employee’s ordinary time rate of pay is taken to be the greater of the average weekly rate earned by the employee in the last 12 months, 5 years or the entire period of employment (section 15(2) of the LSL Act 2018).
  • If no normal weekly number of hours is fixed for an employee’s work under the relevant employment agreement, or if the fixed number of hours had changed in the prior 2 years, the employee’s normal weekly hours is taken to be the greater of the average number of weekly hours worked by the employee in the last 12 months, 5 years or the entire period of employment (section 16 of the LSL Act 2018).
  • Employees may apply to take single day periods of long service leave (section 18(1) of the LSL Act 2018).
  • Employers cannot refuse an employee’s request to take long service leave unless it is on reasonable business grounds (section 18(2) of the LSL Act 2018).
  • Employees may work for hire or reward on a day that they are taking long service leave provided that it is outside of the hours during which the employee takes long service leave (section 35 of the LSL Act 2018).
  • The adverse action prohibitions under the Fair Work Act 2009 (Cth) have been replicated in the LSL Act 2018, except that the definition of “adverse action” has been expanded to include where an employer takes adverse action against an employee if the employer knowingly or recklessly makes a false representation about the employee’s long service leave entitlements (section 36 of the LSL Act 2018).
  • Employers must not refuse a request by an employee (or their representative) to provide long service leave records (section 37(6) of the LSL Act 2018).
  • The limitation period for breaches of long service leave laws have been increased to 6 years from 5 years under the previous legislation (section 37(7) of the LSL Act 2018).

For a side by side comparison of the LSL Act 2018 against the LSL Act 1992, click here.

Employers should reassess their long service leave liabilities and obligations under the LSL Act 2018 and seek legal advice if necessary. You can contact our Employment Law  team who will be happy to assist you  by email or by telephone +613 8540 0200.



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