Long Service Leave Bill 2017 (Vic)

Long Service Leave Bill 2017 (Vic)

Please be advised that the Long Service Leave Bill 2017 (Vic) (the Bill) passed the Victorian Parliament on 8 May 2018 and is currently awaiting assent. The Bill is due to commence on 1 November 2018 (unless it comes into operation before that date), and will repeal the Long Service Leave Act 1992 (Vic) (the Act).

Organisations will be aware that at present, the Act provides that a minimum of 10 years continuous employment with an employer is required before an employer may take long service leave, (even though that long service leave entitlement crystallises at 7 years). Under the Bill, that entitlement to long service will change. More specifically, section 6 of the Bill provides that at any time after completing 7 years of continuous employment with an employer, an employee is entitled to an amount of long service leave on ordinary pay equal to 1/60th of the employee’s total period of continuous employment, (less any period of long service leave taken during that period).

It is important that organisations are aware that section 5 of the Bill provides that the Bill will not apply in relation to an employee who:

  • is entitled to long service leave under a Victorian Act other than the Bill, to the extent of any inconsistency with that other Victorian Act; or
  • is entitled to long service leave under an employment agreement (regardless of whether it was made before or after the commencement of the Bill), to the extent of any inconsistency with that employment agreement if, in the opinion of the Industrial Division of the Magistrates’ Court, the long service leave entitlements are more favourable under that agreement than those provided by the Bill; or
  • is employed by an employer who was exempted from complying with Division 6 of Part 5 of the Act under section 65 of the Act; or
  • is employed under Part 2.3 or 2.4 of the Education and Training Reform Act 2006 (Vic); or
  • is entitled under the Construction Industry Long Service Leave Act 1997 (Vic) to long service leave and to be paid benefits out of the fund within the meaning of that Act.

Organisations should also be aware that section 9(1) of the Bill provides that if employment ends before an employee has taken all of the long service leave they are entitled to, the employee is considered to have started long service leave on the day that the employment ended. Furthermore, section 9(2) of the Bill provides that on the day that the employment ends, the employer is required to pay the employee the full amount of the employee’s long service leave entitlement as of that date. If an employer breaches section 9 of the Bill, a sanction of 12 penalty units is incurred (in the case of an individual) or 60 penalty units (in the case of a body corporate). It is important to note that a breach of section 9 is a continuing offence, which means that the penalty applies for each day during which the offence continues.

Another important change brought about by the Bill are the periods of absence from work that are taken to be periods of employment when calculating the length of a period of continuous employment. By way of example at present under the Act, if an employee takes more than 12 months unpaid parental leave they lose continuity of employment, and any accrued long service leave entitlements. Under the Bill any period of paid parental leave and up to 12 months of unpaid parental leave, will count as continuous employment.

Organisations should also be aware the Bill will provide employees with more flexibility in terms of how their long service leave may be taken. At present, under the Act, long service leave may be taken in either 2 or 3 periods. Under section 18 of the Bill, an employee is empowered to make a request to their employer to take long service leave for a period of not less than 1 day. Section 18 also provides that an employer must grant the employee’s request to take long service leave as soon as practicable after receiving the request, unless the employer has reasonable business grounds for refusing the request.

Reasonable business grounds is defined in section 3 of the Bill and includes the following:

  • there is no capacity to change the working arrangements of other employees to accommodate the employee taking long service leave at the requested time;
  • it is impractical to change the working arrangements of other employees, or recruit new employees to accommodate the employee taking long service leave at the requested time;
  • the long service leave requested by the employee is likely to result in a significant loss in efficiency or productivity;
  • the long service leave requested by the employee is likely to have a significant negative impact on customer service.

Please click here to access the Act.

Contact

For further information please contact the Law Compliance team:

Phone: 1300 862 667

Email: info@lawcompliance.com.au

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