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Upcoming Victorian Long Service Leave Changes

employee leave policy

A reminder that from 1 November 2018, changes to Victorian long service leave (LSL) entitlements will apply.

The Long Service Leave Act 2018 (Vic) will replace the current Long Service Leave Act 1992 (Vic) and will make LSL more flexible and accessible for employees.  

There are a number of changes that will affect all employers who engage employees in Victoria (unless they are specifically excluded from the operation of the Act) particularly around:

  • The entitlement for LSL
  • The calculation of LSL and
  • Potential penalties where LSL is not paid.

Entitlement to Long Service Leave

Currently, an employee cannot take LSL until they have reached ten (10) years.

From 1 November 2018 employees will be able to take LSL after seven (7) years of service.

Taking of Long Service Leave

From 1 November 2018, employees will be able to take LSL as single days of leave, rather than in larger blocks of time, which allows for increased flexibility for both employers and employees.

An employer is required to approve an employee’s request to take LSL as soon as practicable after receiving the request unless there are reasonable business grounds to refuse.

Continuity of service

From 1 November 2018, certain periods of unpaid leave, such as unpaid parental leave, will be counted when an  employer is calculating an employee’s continuity of service for the purposes of determining when LSL will take effect.

From this date, unpaid parental leave taken for a period of up to 52 weeks will count towards an employee’s period of continuous employment or service.

Any unpaid leave beyond 52 weeks will not count as service but will not break the continuity of service for the accrual of LSL.

Entitlements upon Termination

From 1 November 2018, employment will be taken as being continuous despite there having been an absence from work caused by termination of the employment at either the initiative of the employer or the employee (ie. resignation) if the employee is re-employed by the employer within 12 weeks after cessation of employment.

Applying for Long Service Leave

From 1 November 2018, if an employee’s working hours have changed in the last two years before taking leave, the employee’s normal weekly number of hours will be calculated as the greater of either:

  1. The average weekly hours worked in the last year, or
  2. Last five years, or
  3. The last period of continuous employment.

Penalties for Non-compliance

From 1 November 2018, any breach of the LSL Act may now attract criminal penalties.

What can you do to prepare?

In order to prepare your business for these pending changes, it is recommended that you take the time to:

  • Review and update your workplace leave policies to reflect the new LSL entitlements
  • Review and update payroll procedures and systems to ensure that LSL entitlements will be calculated and administered correctly once the new law takes effect.
  • If you currently show LSL leave balances on employee pay slips once the entitlement becomes due at 10 years, you will need to update your system to reflect this entitlement after 7 years continuous service.

Please note, while it's best practice to show an employee's leave balances on their pay slip, it is not a legal requirement. You do however need to tell employees their leave balances if they ask for it.

  • Ensure that your onboarding process includes a step which identifies periods of prior service for employees who are rehired within 3 months of having terminated their employment.
  • Keep copies of all records that may be relevant to an employee’s entitlement to LSL to ensure that entitlements are correctly calculated.

Should you have any questions regarding the pending changes to Victorian LSL provisions, please contact a member of our HR Advisory team on 1300 720 004 or via email at [email protected].

Information in HR Advice Online guides and blog posts is meant purely for educational discussion of human resources issues. It contains only general information about human resources matters and due to factors such as government legislation changes, may not be up-to-date at the time of reading. It is not legal advice and should not be treated as such.

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