We have a long-term employee converting from full-time to casual. I understand that because the employment relationship is continuing we do not pay out his accrued long service leave. Instead, he continues to accrue entitlements on a pro rata basis for the number of hours worked. Is this correct? We are in the ACT.
In the ACT, long service leave accrues at a rate of 1/5 of a month’s leave per year of service. This is the same whether the employee is full-time or casual. The long service leave payment is the employee’s ordinary remuneration. When the employee then seeks to take the long service leave (provided he has completed at least 7 years’ continuous service), the amount that is payable will be calculated by multiplying the average number of hours worked each week by the employee during the period of 12 months immediately preceding the day on which the employee became entitled to the leave, by the ordinary remuneration of the employee on that day.
If the employee ceases to be full-time and becomes casual within a period of 2 years immediately before the date on which he becomes entitled to long service leave, the ordinary remuneration is calculated by adding the previous 5 years’ salary and dividing the total by 5.