The Long Service Leave Act 2018 (Vic) (2018 Act) will repeal and replace the Long Service Leave Act 1992 (Vic) (1992 Act). It will come into operation on 1 November 2018 and will introduce several significant changes to long service leave arrangements in Victoria. These changes apply to all full time, part time, casual and seasonal employees who accrue long service leave (LSL).
What are the proposed changes?
Taking Leave
- Entitlements to LSL
Under the 1992 Act an employee is entitled to take LSL after 10 years of continuous service. However, if an employee’s employment ends between 7 and 10 years LSL is paid on a pro rata basis.
Under the 2018 Act and employee who has completed 7 years of service can take LSL to be calculated on a pro rata basis.
- Flexibility in LSL periods
Under the 1992 employees are entitled to take LSL one period at a time subject to whether there is an agreement between the employer and employee for separate periods.
Under the 2018 Act, an employee will be able to take LSL in periods as short as one day, unless an employer refuses on reasonable business grounds, with the onus of establishing reasonable business grounds on the employer. This means LSL takes on the character of an annual leave entitlement.
Continuity of Employment
- Unpaid Parental Leave
The 1992 Act states that continuity of service is broken if an employee takes over 12 months of parental leave. The 2018 Act removes the 12 months limit so that any parental leave does not break service. Further, unpaid leave was not counted as service under the 1992 Act but unpaid leave up to 12 months will be counted as service under the 2018 Act.
- More rights for casual and seasonal employees
Under the 2018 Act if a casual or seasonal employee takes more than 12 weeks break between their engagements with the employer, their continuity of service will be broken, with the following exceptions:- The employee takes up to two years paid or unpaid parental leave;
- The employer agrees in advance to employee’s absence;
- The employee had a reasonable expectation of re-employment; or
- The break is due to seasonal factors.
Calculation of Leave
- Change of hours
Under the 2018 Act, if an employee’s working hours have changed during the last 2 years immediately before taking LSL, the employee’s normal weekly number of hours is the greater of the average weekly hours worked over the past 12 months, 5 years or the last period of continuous employment. The 1992 Act only provided for calculation over the previous 12 months or 5 years which created an unfair scenario for longer term workers who had reduced their hours in the last 5 years after working full-time for many years.