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- Understand what 'one employer' means
- Know where it applies
One employer and LSL
The Long Service Leave (LSL) Act sets out several situations where an employee is regarded as having been employed by one employer, even though in the strict legal sense they have worked for more than one employer. Below are instances of instances that are considered as 'one employer' for the purposes of calculating LSL.
Change of hands
Where a business is sold, transferred or assigned, and an employee remains with the business, the new employer becomes responsible for the employee's long service leave entitlement. The period of employment with the old employer transfers to the new employer, who becomes liable for the long service leave accrued across the entire period of employment. It is common for the sale of business documents to reflect this liability, but such documents could not validly deny an employee's entitlement. Even if there are no documents setting out this liability, the employee still has an entitlement.
It is important to note that, where an employee will continue with the new owner of the business, the old employer should not pay out accrued long service leave to the employee. It is common for employees to be paid out any accrued annual leave at the time of a sale of a business and for their employment to be considered terminated with the old owner, however this does not break continuing employment for long service leave according to the LSL Act.
If an employee is dismissed by the old or new business owner but is re-hired by the new business owner within 3 months, employment is not broken for purposes of the LSL Act.
If an employee does not remain with a business that has changed hands, the employer who sold the business is responsible for calculating and paying out any long service leave entitlements to which the employee has become entitled.
Where an employee has worked first with one employer and later works with a related corporation, or a corporation with substantially the same directors and/or management, then employment will be continuous. In such a case, the related corporation will assume liability for the employee's long service leave entitlement from the time when the employee commenced with the previous employer(s).
If an employer has an apprentice who is employed by the same employer within 12 months after completion of that apprenticeship, then the time of their apprenticeship is counted for the period of employment with that employer.
Some apprentices are employed by a Group Training company which places the apprentice with a host employer. The apprentice may later become employed by the host employer directly. In this situation, the employment is likely to be with two employers (first the Group Training company, later the business) who are not related. The time the apprentice has spent employed with the Group Training Company will only be considered continuous employment, where the Group Training Company and the host employer are related in a way prescribed in the LSL Act.
Some employees may work in a variety of locations over a period of years. As long service leave entitlements vary between States, the question then arises as to which long service leave legislation applies to the continuous employment. The answer will always turn on the particular circumstances of the case. You should seek advice about your particular circumstances in this situation.
Overseas service is likely to be included for the purposes of accruing long service leave, if it is part of continuous employment with one employer.
ExampleRobyn has been continuously employed by John's Tyres for nine years. The owner of John's Tyres, John, sells John's Tyres to Terry. When the business is taken over, Terry continues to employ Robyn and there is no break in service. In this situation, Robyn's employment is continuous.
Terry becomes liable for Robyn's accrued long service leave over the past nine years, and for any long service leave that accrues in future. Employment may be considered continuous when the assets (for example, equipment), or part of a business, rather than the entire business itself, are transferred to another employer and the employee works for the new owner of the assets or part of a business.