Employer update on pending changes to Long Service Leave legislation in Victoria

On 23 August 2017, the Long Service Leave Bill 2017 was introduced to Victorian Parliament. If passed this Bill will repeal the current Long Service Leave Act 1992 and provide a number of changes to how Long Service Leave (LSL) is accrued and when and how it can be taken in Victoria.

UPDATE (19 June 2018): The Bill has been passed into law and changes will apply from 1 November 2018 unless effected before. Read our full article on what has been changed: Amendments passed on Long Service Leave legislation in Victoria with imminent effect.

The key changes proposed in the Bill are:

    1. Reduce number of years until eligible to take LSL. Employees would be able to take LSL after 7 years of continuous service instead of having to wait until 10 years of continuous service.
    2. Enable LSL to be taken over multiple periods. Employees could take LSL in multiple periods with a minimum of one day LSL per time, similar to how annual leave is taken, instead of having to take it in ‘bulk’. Where taken up by employees this could prove a plus for employers in not having to engage employees to cover for long absences.
    3. Include unpaid parental leave when calculating LSL entitlements. Periods of up to 52 weeks of unpaid parental leave would be included when determining the period of an employees continuous service. This means that employees who have taken parental leave are not penalised in terms of having to wait longer before they can take LSL.
    4. Increase the averaging of hours of work when calculating LSL entitlements. Where an employee’s standard weekly hours have changed in the 2 years prior to taking LSL, the normal weekly hours for the purpose of calculating LSL entitlements are worked out as the greatest of the hours averaged over the last 12 months, 5 years or ‘last period of continuous employment’, taking into account paid and unpaid leave. At the moment averaging of normal weekly hours is only considered when an employee has changed hours in the 12 months prior to taking LSL.

Note it is not suggested that the accrual rate of 0.86667 weeks per year for a full time employee should change.

Although the Bill is likely to be passed before the new year, employers should begin to consider how they will manage these changes:

    1. Will your current payroll system be able to accommodate these changes?
    2. What internal policy documents will need to be updated?
    3. How will these changes affect the provision I should be making to pay LSL?
    4. Which employees may be able to take LSL earlier than we were expecting and when should we discuss it?
    5. Do I need to get legal advice on how these changes will affect our business?

We will keep you posted as to the progress of the Bill but if you have any questions on how you should be preparing (these changes are likely to be passed) we would be happy to discuss – call 03 5339 3200 or contact us here.

Thanks for reading.

By Genna Kidd

This article was originally published in the October issue of our client newsletter. Missed your copy? Contact us here to ask for it to be resent.

The information contained on this website has been provided as general advice only.  The contents have been prepared without taking account of your personal objectives, financial situation or needs.  You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.

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