The Long Service Leave Act 2018 (Vic) (Act) received Royal Assent on 15 May 2018 and will repeal and replace the Long Service Leave Act 1992 (Vic).
The reforms to the statutory long service leave (LSL) regime in Victoria include:
All employers with a Victorian based workforce whose LSL entitlements are derived from this legislation will need to be aware of the significant changes to LSL entitlements which will come into effect on 1 November 2018 (unless proclaimed earlier by the Victorian Government).
Employees will now be entitled to take long service leave after completing 7 years’ continuous employment with the one employer. Previously, an employee was not entitled to LSL unless they had completed 10 years’ continuous service with one employer. The accrual rate of 1/60th of the period of continuous employment will not change under the new Act.
The Act also affords greater flexibility for employees and provides that an employee may make a request to take long service leave for a period of not less than 1 day. Employers cannot refuse an employee’s request to take long service leave unless the refusal is based on reasonable business grounds.
The concept of ‘continuous employment’ has been amended to provide that an employee’s employment is continuous despite an absence for:
The following absences will count towards the period of employment:
Any period of unpaid parental leave up to 52 weeks will count as service for the purpose of calculating LSL entitlements, where any period beyond 52 weeks will not count as service but will also not break continuity of employment. Previously, unpaid parental leave did not count towards calculating an employee’s period of continuous service.
The Act has also been amended to provide that employment is taken to be continuous despite an absence from work caused by termination of the employment at the initiative of the employer, the employee’s resignation or the expiry of a fixed term contract, if the employee is re-employed by the employer within 12 weeks after cessation of employment.
The Act introduces a new method for calculating LSL where an employee’s hours of work are not fixed or where they have changed over a period of employment. If an employee’s working hours are not fixed or have changed during the last 2 years immediately before taking LSL, the employee’s normal weekly number of hours is the greater of the average weekly hours worked over:
Employers are no longer able to apply for an exemption from the operation of the Act. Previously, employers could apply to the Industrial Division of the Magistrates’ Court to be exempt from complying with the Act in respect of all or any, or any class of, employees. As a result, all Victorian employers must be aware of, and will be required to abide by, their requirements under the Act, unless they have previously been granted an exemption.
There are increased powers under the Act for departmental officers and employees to require that LSL records be produced by employers. Employers must not refuse a request by an employee (or their representative) to provide long service leave records.
The civil penalty regime has been abolished under the Act. Criminal penalties will now apply to employers for:
If an employer is found guilty of any of the offences listed above, they may be liable to fines of up to:
Fines may be imposed for each day during which the offence continues and an employer found guilty of an offence may also receive a criminal record.
As a part of the amendments to the penalty regime, the limitation period for breaches of the Act has been increased to 6 years.
Employers should be aware of these amendments and should review and update any relevant policies, contracts and procedures (including payroll systems) to ensure LSL entitlements will be calculated, administered and recorded correctly.
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