You have an employee who is claiming an entitlement to long service leave under the legislation applicable in the state or territory where they work. The employee is claiming that the entitlement should be calculated on the entire period that he has been employed within the corporate group. This is correct because most long service laws require that, when calculating continuous employment of an employee of a corporate employer, employment with a related corporation is to be regarded as employment with the corporate employer.

However, at various times during the period the employee worked for the corporate group, the work was performed outside your state or territory, sometimes for a different group company than the one that currently employs them. Do you count that service?

The answer is yes, so long as it can be shown that the entire period of service can be characterised as service of your state or territory. This depends on whether it has a substantial connection with your state or territory. To resolve this, you look at the entire service, not just the service outside the jurisdiction.

3 cases in which service outside the jurisdiction was counted for long service leave

1. In Australian Timken Pty Ltd v Stone (No 2) (1971), the employee worked:

• 2 years in the US for a US company related to an NSW company, as an employee of a Victorian company related to the NSW company; and
• 5 years in NSW for the NSW company.

The entire service was treated as NSW service for purposes of NSW long service leave.

2. In International Computers (Australia) Pty Ltd v Weaving (1981), the employee worked:

• 4 years in Victoria for an NSW company;
• 1 year in NSW for the NSW company;
• 7 years in South Africa for a South African company related to the NSW company;
• 2 years in the UK for a UK company related to the NSW company; and
• 7 years in NSW for the NSW company.

The entire service was treated as NSW service for purposes of NSW long service leave.

3. In Cummins South Pacific Pty Ltd v Keenan (2020), the employee worked:

• 6 years in the UK for a UK company related to a Victorian company;
• 3 years in Victoria for the Victorian company;
• 5 years in the US seconded by the Victorian company to work for a US company related to the Victorian company; and
• 75 years in Victoria for the Victorian company.

The entire service was treated as Victorian service for purposes of Victorian long service leave.

These cases show that, for example, for an employee with service across different jurisdictions to claim a long service leave entitlement under Victorian law, they need to show the entire period has a substantial connection with Victoria. This would usually require that, at the time the employee is claiming the long service leave entitlement, they are working in Victoria and/or employed by a Victorian employer. They don’t have to show that the period or periods in which this circumstance applied was a substantial proportion of the overall service period.

If, during the overall period of service, the employee was seconded by the Victorian employer to work for a Japanese subsidiary, but either remained employed by the Victorian employer or had some right of return to the Victorian employer, this secondment period would be counted.

If the employee started the service period working in Victoria for a Victorian company, then transferred to other companies in the corporate group working outside Victoria, before later returning to Victoria, it will be easier for this employee to claim a connection with Victoria than if the employment started overseas. However, as the Timken case above shows, it is a question of degree.