Long service leave – state system employers
Long service leave (LSL) is leave granted with pay to employees after they complete a defined period of employment or service with their employer. Currently the Western Australian State LSL legislation comes from the Long Service Leave Act 1958 (LSL Act).
Which LSL conditions apply to employees employed in companies that are non-constitutional corporations?
Non-constitutional corporations are entities that are not incorporated who are still operating in the State system such as sole traders and partnerships.
Award-free employees are covered by the State LSL Act. Some employment contracts offer LSL entitlements at least equivalent to the State LSL Act, in which case the State LSL Act does not apply.
Employees bound by a state award are covered by the State LSL Act. Some state awards have more generous LSL entitlements than the State LSL Act and in these cases the more generous provisions will apply.
Employees bound by a federal award (now a transitional award), where the award is silent on LSL, the provisions of the State LSL Act will apply. However, where a transitional award contains its own LSL provisions these provisions must apply.
Construction industry employees employed by non-constitutional corporations will derive their LSL entitlements from the Construction Industry Portable Long Service Leave Act 1985, paid through the ‘MyLeave’ scheme.
Local government employees are covered by the Local Government (Long Service Leave) Regulations.
State government employees are covered by the Long Service Leave Order - State Government Wages Employees.
It should be noted that where the Act provides for a greater benefit, then such benefit should apply.
Service vs continuity
The key condition that qualifies an employee for LSL is a period of continuous service or continuous employment.
“Service” or “employment” is the time during a contract of employment that is counted for the purpose of determining an employee’s entitlement to LSL (i.e. time spent working or on paid leave or on military service or on jury duty).
“Continuity” refers to the unbroken period of service or employment for which the employee earns an entitlement to LSL.
Service or employment and continuity must be considered together to determine an employee’s entitlement to LSL. Some events will not be counted as service or employment for LSL calculations. For example, an employee could be continuously employed for an unbroken period of 11 years but have accrued only 10 years of LSL due to periods of time that did not count as employment in accordance with the LSL Act (e.g. the employee may have taken one year’s unpaid parental leave).
Transmission of business and LSL
Where a business is sold and some or all of the employees of the previous owner transmit to the new owner, for the purpose of LSL their service will not be broken.
In calculating the entitlement to LSL where transmission of business has occurred, the sum of the time served with the previous owner and the time served with the new owner will be deemed to be one continuous period with the service commencing from the day the employee began employment with the original owner of the business.
Casual and part-time employees
Casual and part-time employees are entitled to LSL, provided their service or employment with the employer has been continuous.
For casual employees, continuous service or employment does not necessarily mean an unbroken period of service. A series of employment periods (or employment contracts) could be deemed continuous service, provided the employee was available to work when rostered over the whole qualifying period.
Contracting out of LSL
Section 5 of the State LSL Act provides that an employer and an employee may agree for the employee to forego an entitlement to LSL on the condition the employee is given an adequate benefit in lieu of the entitlement and the agreement is in writing.
Unless there are specific provisions in the award or industrial agreement the ability to contract out of LSL only applies to entitlements accrued under the LSL Act.
Summary of entitlements
A summary of LSL entitlements under the State LSL Act is displayed on page four.
Employers are advised to seek further information when granting or making payments in lieu of LSL.
For further information please contact CCI’s Employee Relations Advice Centre on (08) 9365 7660, email email@example.com or visit CCI’s website at www.cciwa.com.
|Long Service Leave Act 1958|
|First entitlement||8 2/3 weeks after 10 years continuous service.|
|Subsequent entitlements||4 1/3 weeks after 5 years continuous service.|
|Rate of pay (waged/salaried etc)||At the ordinary rate applicable at the time leave commences. Excludes shift premiums, overtime, penalty rates, allowances or the like.|
|Rate of pay (where employee is employed on piece or bonus work or any other system of payment by results) Number of hours to be paid||The ordinary rate payable shall be determined by averaging the weekly rate earned in the previous 12 months. Normal weekly number of hours of work. Where weekly hours over the period of employment have varied, the “normal weekly hours” are determined by averaging the weekly hours worked during the entire period of employment.|
|Payment to be made||At the same time payment is made in the normal course of employment, unless the employee requested in writing to be paid before leave begins, in which case the employer must comply.|
|When leave must be taken||Subject to any agreement between employer and employee, as soon as “reasonably practicable” after it becomes due. If employer and employee can’t agree, where the employee has accrued LSL more than 12 months ago, the employer is not to refuse the employee taking the leave at any time suitable to the employee.|
|Separate periods||One continuous period of if by agreement, in separate periods of not less than one week.|
|Notice required Postponement of leave||By agreement or by the employee giving the employer at least two week’s notice. Where by agreement LSL is postponed to meet the employee’s convenience, the rate of pay for such leave shall be the rate applicable to the date of accrual (unless employer agrees to pay the rate applicable when the leave is taken).|
|Leave in advance||Is allowed by agreement. If sufficient leave is not subsequently accrued upon termination of employment, the employer may make a deduction equivalent to the LSL granted in advance, from monies owing to the employee on termination.|
|Payment in lieu on termination||Pro rata leave is paid upon death or termination after at least seven years continuous service (except for serious misconduct) in accordance with the following:
|Termination for serious misconduct||Forfeiture of accrued pro rata leave.|
|Public holidays||Here the conditions of employment provide an entitlement to public holidays and a public holiday falls during a period of LSL, the LSL shall be increased by one day for each public holiday falling within that period. Annual leave which may fall due during LSL is not absorbed.|
|Other work||Employee not permitted to engage in other employment while on LSL otherwise the right to the remaining leave is forfeited.|
|Contracting out||Employer and employee may agree (in writing) that the employee forego his or her entitlement to LSL if the employee is given an “adequate beneﬁt in lieu of entitlement”.|
|Exclusions||Where an award, enterprise or workplace agreement, state or federal laws or other agreement between employee and employer provides a LSL entitlement “at least equivalent” to the LSL Act, the LSL Act does not apply at all.|