Australian employees who have completed a certain tenure of service are entitled to an extended paid time off. The leave can be for a specific reason or just to enjoy a vacation with friends or family. It is a part of NES, i.e. National Employment Standards in Australia.
However, certain rules and legislations decide if an individual is eligible for long service leave entitlements or not. The rules or legislation may vary according to the region where the employees work.
Long Service Leave for Employees Working in Northern Territory, Tasmania, and South Australia
Long Services Leave Act, 1976 covers employees who work in the Northern territory. However, construction workers and those employed in government departments are exempted from this act.
As per the Act, an employee working for the same organization for a minimum of 10 years is entitled to a long service leave of 13 weeks. Apart from this, the employee is eligible for an additional long service leave of 1.3 weeks for every year of service after the tenth year. However, this additional long service leave can only be taken after another five years of service.
Pro-Rata Long Service Leaves
This leave applies to casual, full-time, and part-time workers, provided that they fulfill the criteria of continuous service. If the employee has not worked for ten years but has completed a minimum of 7 years of service can get long service leave on a pro-rata basis.
However, the leave can be granted only to those who have retired or have been terminated due to illness, inability to work, or any major reason. The employees who had to leave the organization due to misconduct cannot avail this leave. The employees of the Northern Territory are also not allowed to cash out their long service leaves.
The employees who work in the southern part of Australia are covered by the Long Services Leave Act of 1987, but only if they do not come under any long service scheme, portable long service leave, or pre-modern long service team. The employees working in government departments and the construction industry are not covered under this act.
The leave is applicable for employees who have completed a minimum of 10 years of service. They are eligible for 13 weeks of long service leave and can get an additional leave of 1.3 weeks every year after completing the 10th year of service.
The individuals who have worked for a minimum of 7 years of continuous service with the same company will receive this leave on a prorated basis. It can only be availed if the employee is no longer working with the company due to sickness or other critical reasons. If the employee has been terminated due to misconduct or any other serious allegation, they will not be entitled to this leave.
Upon mutual agreement between the organization and the employee, an employer can allow the employee to cash out a part of the entire long service leave if they have completed ten years of continuous service. The employer and employee must sign a mutual agreement to receive this benefit.
The employees who work in Tasmania are covered by the Long Service Leave Act, 1976 if they aren’t covered under portable service leave, pre-modern long service leave, or any other particular legislation. Certain provisions of this Act apply to employees working in the mining industry. The employees working in the construction industry or public sector are not covered under this act.
According to this Act, if employees complete a minimum of 10 years of service, they are entitled to 13 weeks of long service leave. Additional four ⅓ weeks of long service leave is applicable for every five years of extra service after completing the ten years of initial service.
Pro-Rata Long Service Leave
The employees who have completed a minimum of 7 years of service leave but less than ten years will be eligible for a long service leave on a pro-rata basis. However, only the employees who are no longer with the employer due to retirement, illness, or any other genuine reason can avail of this leave. Employees who are terminated due to serious allegations of misconduct are not eligible for this leave.
The leave can be cashed out if it is not utilized till retirement. However, this is only possible if the employer and employee mutually agree. The agreement must be written and signed by both employer and the employee.
How is Long Service Leave Calculated?
Long service leave (in hours) = total hours worked during the entire employment tenure ÷ 52 x 8.6667 ÷ 10
The hourly rate is multiplied by the answer obtained from the above formula if the employee decides to cash out the long service leave.
For example, if an employee has worked for 15,000 hours during ten years of employment, his long service leave is calculated as:
15,000 ÷ 52 x 8.6667 ÷ 10 = 250 hours of long service leave.
Now, if they want to cash out the long service leave and have an hourly rate of $15, the payout of the long service leave would be:
250 x 15 = $3,750
Long Service Leave for States and Territories in Australia
The legislation and entitlement for long service leave can be different for different states and territories in Australia. The below table gives a gist of the legislation and entitlement as per the particular states and territories:
|New South Wales||Long Service Leave Act, 1955||Long Service Leave NSW (New South Wales) employees will get 8.667 weeks i.e. 2 months of long service leave if they have served one company for at least 10 years.. An additional 1 month of long service leave is provided on completing additional 5 years after the initial 10 years of service. |
Employees with a minimum of 5 years of service can avail the long service leave NSW on a prorata basis.
Cashing out the long service leave is not allowed in NSW.
|Victoria||Long Service Leave Act, 2018||Long Service Leave VIC (Victoria) of 6.1 weeks is applicable to employees who have completed a minimum of 7 years of service with one employer. |
Pro-rated leaves and the option of cashing out are not allowed as per this act.
|Queensland||Long Service Leave Act, 1999||Long Service Leave QLD (Queensland) of 8 weeks or two months is applicable to employees who complete 10 years of continuous employment with the same employer. |
Pro-rata long service leave entitlement is for those with a minimum of 7 years of service but not equal to or more than 10 years. The employee should have resigned due to sickness, inability to work, or any other critical reason.
Cashing out is permitted if both parties agree and sign a written mutual agreement.
|Australian Capital Territory||Long Service Leave, 1976||A 6-week Long Service Leave is provided to employees with a minimum of 7 years of employment with the same firm. An additional long service leave entitlement of ⅕ of a month is applicable for every year after the 7th year. |
Long service on the basis of pro-rata is applicable if the employee has completed a minimum of 5 years but less than 7 years of service.
The option of payout of long service leave is not provided to the employees.
|Western Australia||Long Leave Service Act, 1958||The employees who complete a minimum of 10 years of employment with the same organization are entitled to a long service leave WA (Western Australia) of over 8 weeks. An extra 4 ⅓ weeks of long service leave is provided after completing 5 years of additional service after the initial 10 years. |
Employees who have been terminated due to death or health reasons or any other reason other than misconduct are eligible for long service leave on a pro-rata basis if they have completed a minimum of 7 years but less than 10 years of service.
The option of cashing out is applicable under specific circumstances. However, both the employer and employee must agree to it and provide their consent in a duly signed written agreement.
Note: In the above sections, we have already covered long service leave entitlement and legislation for employees working in Tasmania, South Australia, and northern territory.
Qualifying Criteria for Long Service Leave
The leave entitlements are only based on continuous employment of up to certain years. However, employment is continuous even when it gets transferred to another branch or company that is a part of the same business group.
Employment is continuous if the company gets sold and the employees complete the minimum tenure while working under a new owner.
The qualifying tenure differs per the leave policy of a particular state or territory. However, the employee is eligible for the leave on a pro-rata basis if they retire before completing the tenure. In such cases, the long service leave is usually paid out in cash.
What is a Long Portable Service Leave?
Portable long-service leave is provided in some Australian territories and states. These states and territories have particular legislation allowing employees to accrue long service leave while working with companies that fall under the same industry. For example, mining, construction, community services, security, and cleaning employees are eligible for this type of long service leave.
FAQs about Australian Long Service Leave
How does an employee qualify for this leave?
An employee qualifies for a long service leave after working for a continuous period with the same employer. In most cases, the employee must complete a minimum of 10 years of service to avail of this leave. However, it may differ according to the legislation and territory where the employee works.
Who pays for the long service leave?
In some states and territories, employees are allowed to cash out the leave. The employer makes this payment. If an employee is covered under portable long service leave, the employer pays a part of the payment collected by the scheme administrator. The scheme administrator collects payment from all employers the employee has been working for and pays the final amount to the employee.
How many weeks of long service leave is provided to the employee?
The number of weeks of long service leave depends on the state or territory where the employee works. Depending on the initial employment period, the employees can get from 6 to 13 weeks of leave.
Can employees accrue long service leave if they are on leave?
If an employee has taken paid leave from the authorized person, they can continue to accrue long service leave.
Is an employee eligible for long service leave if they have resigned?
Yes, employers can provide a long service leave to an employee who has completed the qualifying period provided that they have unused leaves. If they do not meet the qualifying tenure, employers can provide them leave on a pro-rata basis, provided that the territory or state where the employee works allow it.
Can employees refuse a leave?
The employee’s consent is essential for granting them a long service leave. However, some Acts allow the employer to provide a long service leave to an employee if they cannot reach an agreement with mutual consent. The employee may refuse this leave only if their reasons for the same are justifiable.
Can casual employees avail of long service leaves?
Yes, most states and territories allow casual employees to take long service leave provided they meet the qualifying criteria.