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Long service leave: Employment termination

Understand the rules and get Long Service Leave calculations right.

On this page

  • Understand employee entitlements
  • Know what is owed upon termination
  • Deal with long service leave during liquidation
If you need further assistance at any time, please contact Employment Information and Compliance on 1800 287 287

Employee entitlements

On the day that employment ends an employee with at least 7 years of continuous service with one employer is entitled to receive, in full, payment for any long service leave not taken. This will apply whether the employee has resigned, has had their employment terminated by the employer, has been made redundant, or has died.

If LSL has already been taken

Where an employee has already taken long service leave, the employer must pay any remaining accrued leave at termination.

If an employee dies before taking LSL

If an employee has accrued long service leave but dies before it is taken, a payment may be due to the employee’s personal representative.


Marina resigns from her employment after seven years and 6 months employment. Marina's long service leave entitlement is calculated by taking:

  • 7 years multiplied by 52 weeks = 364 weeks and
  • 6 months = 26 weeks and adding them together.
364 weeks plus 26 weeks = 390 weeks in total.

We then need to divide the total weeks by 60, as Marina will receive one week’s long service leave for each 60 weeks of service. 390 weeks divided by 60 equals 6.5 weeks Marina is therefore entitled to payment of 6.5 weeks long service leave on the day her employment ends.

When employees are not eligible

There is no entitlement to a payment of accrued long service leave unless there are at least seven years of continuous employment.

Note that before 1 January 2006, there was no entitlement to a payment of accrued long service leave unless the employee has reached at least 10 years of continuous employment.

If a company is liquidated

If a business is liquidated, it is essential to contact the liquidator urgently to make an application to the liquidator to be paid from the available assets as a creditor of the business. If these are insufficient to meet an employee's long service leave entitlement, the Fair Entitlements Guarantee may be available.

Employees who are owed certain employee entitlements after losing their job because their employer went bankrupt or into liquidation may be able to get financial help from the Australian Government.

This help is available through the Fair Entitlements Guarantee (FEG) if their employer went bankrupt or entered liquidation on or after 5 December 2012 or through the General Employee Entitlements and Redundancy Scheme (GEERS) if their employer went bankrupt or entered liquidation before 5 December 2012.

Find more information about FEG on the Department of Employment website.

Please contact Small Business Victoria on 1800 287 287 for further information.