Victorian Government Assents Long Service Leave Act 2018

Wednesday 16 May 2018 @ 9.28 a.m. | Industrial Law | Legal Research

Yesterday, 15 May 2018, the Long Service Leave Act 2018 (Vic) (the “Act”) was assented. The Act will repeal and replace the Long Service Leave Act 1992 (Vic) (the “1992 Act”) with the purpose of better suiting the legislation to the modern day workplace. In particular, the Act aims at making leave requirements fairer to those people whose working requirements change during their working life, such as  carers and working women who take a carer break to look after their children.  The Act is yet to be proclaimed, but has a default commencement date of 1 November 2018.

Minister for Industrial Relations Natalie Hutchins stated in the media release on 9 May 2018:

“The new Long Service Leave laws are a huge win for women, parents and carers across Victoria.”

“No one should be penalised for spending more time at home when their kids are born, or for changing their working hours to look after a loved one.”

Background

In Victoria, the regulation and administration of long service leave was previously legislated by the Long Service Leave Act 1992 (Vic). The 1992 Act was reviewed by the Victorian Government in 2016. The review found that the 1992 Act was outdated and provided harsh requirements for many people, in particular parents who undertake parental leave in the course of their employment.  The Long Service Leave Bill 2017 (Vic) (the “Bill) was therefore formulated to address the issues which were brought to light in the review.

The Bill was introduced into the Legislative Assembly on 22 August 2017 by Ms Natalie Hutchins, Minister for Industrial Relations. Ms Hutchins outlined the importance of the reform of the long service leave legislation in her second reading speech to the Legislative Assembly on 24 August 2017:

“Long service leave has been a workplace benefit for many years. The concept is well understood and accepted by workers and employers alike. Only about one in four workers, however, will ever qualify for long service leave.

There is general recognition that a worker deserves a break after providing long and faithful service to their employer. While this may seem like a straightforward concept, the realities of the modern workplace mean that the application of our long service leave laws is often not as simple as it seems.”

The Act

In repealing and replacing the 1992 Act, the Long Service Leave Act 2018 (Vic) purports to create a legislative framework for long service leave in Victoria that is more flexible, fair and beneficial for both employers and employees. The Act applies to all employees in Victoria except those specified in section 5:

This Act does not apply in relation to an employee who—

  1. is entitled to long service leave under a Victorian Act other than this Act, to the extent of any inconsistency with that other Victorian Act; or
  2. is entitled to long service leave under an employment agreement (regardless of whether it was made before or after the commencement of this Act), to the extent of any inconsistency with that employment agreement if, in the opinion of the Industrial Division of the Magistrates' Court, the long service leave entitlements are more favourable under that agreement than those provided by this Act; or
  3. is employed by an employer who was exempted from complying with Division 6 of Part 5 of the Long Service Leave Act 1992 under section 65 of that Act; or
  4. is employed under Part 2.3 or 2.4 of the Education and Training Reform Act 2006; or
  5. is entitled under the Construction Industry Long Service Leave Act 1997 to long service leave and to be paid benefits out of the fund within the meaning of that Act.

The Act is divided into 9 parts with Part 2 covering long service leave entitlements. Importantly, in section 6 of Part 2, the time that is required to be served by an employee before being entitled to long service leave has been reduced from 10 years in the 1992 Act, to 7 years.

“At any time after completing 7 years of continuous employment with one employer, an employee is entitled to an amount of long service leave on ordinary pay equal to 1/60th of the employee's total period of continuous employment less any period of long service leave taken during that period”: section 6.

Other important changes made by the Act include allowing paid parental leave and up to 12 months of unpaid parental leave to count as service when allocating long service leave. Prior to this, if an employee took more than 12 months unpaid parental leave they would lose any accrued long service leave entitlements.

Ms Hutchins further outlined the changes to be implemented by the Act in her second reading speech to the Legislative Assembly:

“The [Act] increases penalties to be comparable with current Victorian standards. The two existing civil penalties will also be changed into criminal offences. I am advised by my department that a limited number of prosecutions are commenced each year. Most complaints for non-payment of entitlements, or a refusal to allow an employee to take leave are successfully settled with the department's help before the need for court action.

Another change is to allow authorised departmental officers to require the production of records, when investigating alleged breaches. However, authorised officers will not have a right to enter premises.

The [Act] includes a new method of calculating leave where an employee's hours of work are not fixed, so that the average of the hours worked will be calculated as the greater of the average over the last 12 months, five years, or the entire period that the employee has been continuously employed. This method of calculating entitlements is fairer for some employees, notably those that have taken leave or reduced their hours of work to look after their dependents.

Similarly, the [Act] also includes a new method of calculating leave where an employee's hours of work have changed, so that hours worked will be calculated as the greater of the average over the last 12 months, five years, or the entire period of employment. The averaging will apply to where a change in hours has occurred in the 24 months prior to the long service leave being accessed. Again, this is fairer for the various scenarios that arise.

The [Act] provides an employee whose hours of work are about to change the right to request a statement from their employer outlining the old and new working arrangements. This statement would serve as evidence in any court proceeding. Employees often find it is difficult to pursue their entitlement because of a lack of adequate records, particularly where a business has been sold.”

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products. Nothing on this website should be construed as legal advice and does not substitute for the advice of competent legal counsel.

Sources:

Long Service Leave Act 2018, available on TimeBase's LawOne service.

Long Service Leave Bill 2018, and explanatory material available on TImeBase's LawOne service.

Media Release: Long Service Leave Now Fairer For Victorian Women (9 May 2018). Minister for Industrial Relations.

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