When the Federal Labor Government drafted the Fair Work Bill in 2008, it contemplated a process of working with state and territory governments to develop nationally consistent long service leave entitlements. The legislation preserved in the National Employment Standards (NES) the long service leave entitlements that arose in pre-modernised awards, but barred the new modern awards from regulating long service leave. In effect, the legislation aimed to preserve the status quo, pending a harmonised system across all jurisdictions.

The NES preserves long service leave entitlements in pre-modernised awards (i.e. awards as they stood immediately before commencement of the NES on 1 January 2010) by designating these ‘applicable award-derived long service leave terms’. If applicable award-derived long service leave terms apply in relation to an employee, the employee is entitled to long service leave in accordance with those terms as an NES entitlement, and not under any state or territory legislation that would otherwise apply.

To determine whether there are applicable award-derived long service leave terms, it is necessary to consider whether the award would have:

• applied to the employee’s current employment if the employee had been in that employment immediately before 1 January 2010 – even if the employee did not commence employment until well after that date; and
• at that time entitled the employee to long service leave.

The effect of any pre-commencement workplace agreement, Australian workplace agreement or workplace determination that applies or applied to the employee is ignored in this assessment. However, the NES entitlement does not apply if the employee is subject to a workplace agreement, Australian Workplace Agreement or other pre-Fair Work Act industrial instruments with long service leave provisions.

The interaction between the NES long service leave entitlement and the operation of the South Australian long service leave statute was examined in Conroy's Smallgoods v Australasian Meat Industry Employees Union (2023). The issue in that case was that, unlike the SA long service leave legislation, the pre-modernised award long service leave entitlement that was preserved in the NES did not give that entitlement to casuals. Given the NES provision did not give the casual employee entitlement to long service leave, did the state legislation apply?

Two out of the three judges in the Court answered the question in the negative. They believed that it would be an absurd result if a casual, who had no entitlement to long service leave under their federal awards until 1 January 2010 and received a loading in lieu of that entitlement, suddenly became entitled to long service leave on 1 January 2010, based on service prior to 1 January 2010. They concluded the Government did not intend this result; rather it intended to preserve the current arrangements for long service leave in place at that time, pending the development of nationally consistent long service leave entitlements. Therefore, the casual’s long service leave entitlement was nil, despite most casuals in South Australia having that entitlement under the state Act.

The Rudd Government’s confidence that it might have negotiated harmonised long service leave laws in 2007 was no doubt bolstered by the Labor being in office in all nine of Australia’s jurisdictions. This wasn’t the case by the time the Fair Work Bill was introduced on 25 November 2008. It will be interesting to see if the current federal Labor Government has an appetite to revisit this issue.