Changes to Victoria’s long service leave entitlements 2018

On 8 May 2018, the Victorian Parliament successfully passed the Long Service Leave Act 2018 (Vic) (the Act) and introduced a number of changes to Victoria’s long service leave entitlements.

From 1 November 2018, the Act will bring into effect the following key changes:

  • Employees can take long service leave after 7 years of continuous service;
  • Unpaid parental leave will now count as continuous service;
  • Casual employees will have greater rights;
  • A sale of assets will include “tangible and intangible assets”;
  • Continuous service will be broadened;
  • Civil Liability will be considered Criminal liability; and
  • Calculation of long service leave will vary where an employee’s hours of work are not fixed.

Employees will be entitled to apply to take their long service leave after 7 years of continuous service

Under the current regime, employees cannot apply for long service leave until after 10 years of continuous service. From 1 November 2018 employees will be able to apply for long service leave after 7 years of continuous service on a pro-rata basis and at a minimum of one day’s leave at a time.

Unpaid parental leave will now count as continuous service

Currently, any period of unpaid parental leave does not contribute to continuous service. Under the Act paid parental leave and up to 12 months of unpaid parental leave will count as continuing service and will allow employees to accrue long service leave. Unpaid parental leave over 12 months, however, will not count as continuing service unless the employer and employee agree otherwise.

Casual employees will have greater rights

Under the Act casual employees will break their continuity of service if they have more than a 12-week break from their employment unless:

  1. a casual employee takes up to 2 years paid or unpaid parental leave;
  2. there is an agreement between the casual employee and employer; or
  3. there is a reasonable expectation that the employee will return to the employment.

Transfer of leave entitlements upon sale of business/assets

Unless otherwise agreed, an employee’s long service leave entitlements will generally become the responsibility of the new employer, if the employee continues to be employed by the new employer. Under the new Act, the same principal will apply but a sale of assets will expand to include “tangible and intangible assets”.

Continuous service

Currently, where an employee has been fired and re-employed by the same employer within 12 weeks, the employee is considered to have continuing service.

Under the new act, an employee will also be considered to serve continuous service where:

  1. an employee resigns and is re-hired within a 12-week period;
  2. there is an expiration of a specified term in an employment contract; and
  3. the employee’s apprenticeship is complete.

Expansion of Criminal liability

Under the new Act certain civil penalties will be identified as criminal penalties where:

  1. an employer fails to disclose that an employment agreement will modify or remove an employee’s long service leave entitlements; and
  2. an employer takes adverse action against an employee because the employee is entitled to apply for long service

Calculation of leave where an employee’s hours of work are not fixed

Where an employee’s hours are not fixed and have changed during the 12 months leading up to that employee taking long service leave, their entitlements are calculated by using either their average weekly hours worked over the previous 12 months or the previous five years.

Under the new Act, an employee’s entitlements may also be calculated on the average hours worked over the entire period of continuous service. From November 2018 an employee will be entitled to the greater of the three averages rather than the two averages.

In light of these changes, employers should take appropriate steps to understand the changes, ensure that long service leave entitlements are correctly calculated and that requests for long service leave are appropriately responded to. If you would like further information on the above changes and how they may affect your business or yourself, please contact Lanyon Partners Legal.


Disclaimer: The information contained herein is of a general nature only and is not intended to be relied upon nor is it a substitute for appropriate professional advice. Whilst all care has been taken in the preparation of the material, it is not guaranteed to be accurate. Individual circumstances are different and as such require specific examination. Lanyon Partners cannot accept liability for any loss or damage of any kind arising out of the use of or reliance upon all or any part of this material. Additional information may be made available upon request.