The Long Service Leave Bill 2017 introduced to Victorian Parliament on 23 August 2017 was passed into law on 8 May 2018 and received Royal Assent on 15 May 2018. This will replace the current Long Service Leave Act 1992 (Vic) with the Long Service Leave Act 2018 (Vic) from 1 November 2018, unless effected prior.

This means the following changes to how Long Service Leave (LSL) is accrued and when and how it can be taken are about to take effect for Victorian employees and employers:

• 1. Only 7 years continuous employment is required to be eligible to take LSL, instead of having to wait until 10 years of continuous service. Note that the accrual rate of 0.86667 weeks per year for a full time employee does not change.
  2. LSL can now be taken over multiple periods with a minimum of one day LSL per time, in the same way as annual leave is taken. This could prove a plus for employers in not having to engage extra employees to cover for long absences.
  3. Payments in lieu of LSL will be possible where available under an enterprise agreement or other relevant fair work instrument.
  4. Unpaid parental leave of up to 52 weeks is now to be included when calculating an employees continuous service to determine their LSL entitlements.
  5. Where an employee is re-employed within 12 weeks of being terminated (for either dismissal, resignation, expiry of a specific term contract or completion of apprenticeship) then their employment is considered to be continuous.
  6. 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 entire period of employment, taking into account paid and unpaid leave.
  7. The number of penalty units for failure to pay LSL increases from a maximum of 20 units ($3,171.40) to 60 units ($9,514.20).
  8. Criminal rather than civil penalties now to apply where:
     • 1. Adverse action is taken against an employee because they are entitled to LSL,
       2. An employer fails to disclose that an employment agreement may have an effect on LSL entitlements.

Employers should be working with their payroll officers or payroll provider to ensure that:

• 1. The changes are incorporated into their current payroll system
  2. Internal policy documents are updated
  3. Consideration is given to how the changes affect the provision made for paying LSL
  4. They are aware of any employees who may be able to take LSL earlier

If you have any questions about the changes to Victorian Long Service Leave legislation and how it may affect you we would be happy to discuss – call 03 5339 3200 or contact us here.

Thanks for reading.

By Genna Kidd

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.