Long service leave is paid leave available to employees who have worked continuously for the same employer over a long period of time.
How many years of continuous service an employee must have served with you in order to access the entitlement depends on your jurisdiction. In all jurisdictions except the ACT, an employee must have served 10 years of continuous service; in the ACT, they must have served 7 years’ service. In some circumstances, employees are entitled to a pro-rata long service leave payment after a shorter period of time – again, this will depend on your jurisdiction.
In general terms, an employee can take long service leave as soon as practicable after they have met the minimum period of continuous service, by agreement with you and taking into consideration the needs of your business (the exact wording differs slightly in each jurisdiction’s legislation).
These are the basics of long service leave, but it can be a confusing entitlement that raises a lot of questions.
In today’s bulletin, Charles Power answers some common questions about exactly when and how long service leave can be taken.
Answers to 3 common long service leave questions
Can you choose when an employee takes their long service leave?
You may wish to direct an employee to take long service leave at a certain time, but whether or not you can do so will depend on your jurisdiction:
- NSW and WA employers can direct an employee to take long service leave with 1 month’s written notice;
- NT employers can direct an employee to take long service leave with 2 months’ written notice;
- ACT and SA employers can direct an employee to take long service leave with 60 days’ written notice;
- Queensland and Victorian employers can direct an employee to take long service leave with 3 months’ written notice; and
- Tasmanian employers cannot direct an employee to take long service leave but can apply to the Department of Justice to request that the Secretary directs the employee to do so.
Can an employee take long service leave over, say, one day per week?
No. Long service leave must be taken as either a continuous period or in smaller blocks, usually by agreement between you and the employee. For example, the WA Long Service Leave Act 1958 allows employees to take long service leave in separate periods of not less than 1 week (by agreement) and the NT Long Service Leave Act 1981 allows for the leave to be taken in up to three separate periods of not less than 4 weeks. On the other hand, SA employees must take their long service leave in one continuous period.
Can you pay an employee’s long service leave entitlement without them actually taking the leave?
Legislation in some jurisdictions allows for alternative long service leave arrangements, such as:
- Cashing out long service leave, i.e. paying an employee the amount they would have received had they taken long service leave – this is not available in the ACT, NSW, NT or Victoria, and can only be done in Queensland, SA, Tasmania and WA by agreement with the employee (and Queensland legislation applies additional conditions);
- Buying out long service leave, i.e. providing a benefit to an employee instead of recognising their long service leave entitlement – this is not available in the ACT and Queensland, and certain conditions must be met to buy out long service leave in all other jurisdictions; and
- Making an advance payment for long service leave, which corresponds to the amount an employee would have received had they taken the leave (note that in contrast to cashing out and buying out, this does not extinguish the employee’s entitlement to take long service leave). Tasmanian employers cannot make advance payments, and employers in all other jurisdictions must do so by agreement with the employee.