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Long service leave: continuous employment

Understand the rules and get long service leave calculations right

On this page

  • Know how leave affects continuous employment
  • Understand what breaks continuous employment
  • Read our examples to help you understand the rules

Long Service Leave changes coming 1 November 2018

The Long Service Leave Act 2018 will come into effect on 1 November 2018 and supersede the 1992 Act. 

These changes include:

  • greater flexibility for women, families and people transitioning to retirement
  • access to long service leave after seven years, not ten
  • allowing employees to take long service leave in smaller increments (i.e. for any period of one day or more)
  • most absences from work do not break continuous employment
  • unpaid leave, including parental leave, counts towards long service leave
  • increased penalties for employers who do not keep records or do not produce them when requested. 

This website, including the Long Service Leave calculator, will be updated to reflect those changes on 1 November.

Read the Long Service Leave Act 2018 FAQs

If you own, are looking to purchase, or start a small business with under 20 employees, you may be eligible for our Long Service Leave Small Business Information Service (LSLSBIS).

LSLSBIS offers one-on-one information and advice regarding your responsibilities under the Victoria Long Service Leave Act.

To access this program, contact Wage Inspectorate Victoria by giving them a call on 1800 287 287 or send them an email.

Leave and continuous employment

For an employee to become entitled to long service leave, their employment with their employer must be continuous. This does not prevent the employee taking certain breaks from work, paid or unpaid including the following.

Parental leave

  • Any form of paid or unpaid parental leave – maternity, paternity or adoption leave – up to 52 weeks at a time or longer as per legal entitlement, will not break continuous employment. 
  • While unpaid parental leave will not break continuous employment, LSL will not accrue during this time.

Illness or injury

  • An absence of any length from work on account of illness or injury – which includes a WorkCover absence – annual leave, or LSL itself will not break employment.
  • Any absence from work of not more than 48 weeks in any year on account of illness or injury is to be counted as part of the period of employment. 
  • Any absence for that reason in excess of 48 weeks is not to be counted. Illness or injury leave includes a WorkCover absence.

Unpaid leave

  • Any other form of paid or unpaid leave –  for example study leave – will also not break employment.

Lack of work

  • If an employee is stood down by their employer because of a lack of work, their employment will remain unbroken.

Dismissed and re-employed

  • If an employee is dismissed by their employer but subsequently re-employed before three months have elapsed, then employment will be unbroken for purposes of long service leave – but that absence will not count as service.

Leave and LSL accrual

  • Most forms of paid and unpaid leave – except unpaid parental leave – will count toward the period of employment, and so LSL will continue to accrue during this time. 
  • Although unpaid parental leave will not count, any paid parental leave paid by the employer will count toward employment, and LSL will continue to accrue.

Breaks to continuous employment

Continuous employment will be broken where:

  • an employee resigns from employment – even if the employee is subsequently re-employed
  • an employee is dismissed by their employer and is subsequently re-employed after three months have elapsed.

Examples

Koby resigns – and then asks for his job back 

Koby has been a mechanic at S.B.A Auto Repairs for six and a half years. He gets offered a job by a new repair shop which opens for business down the road.

He accepts the offer and resigns from S.B.A. However, after just one month, Koby realises that he has made a mistake. He's required to work really long hours with minimum wages. He asks for his old job back at S.B.A. Auto Repairs – and they welcome him back.

  • In this case, although Koby was only gone for one month, the fact that he resigned means his continuous service is broken.  

Silvie is dismissed – and then re-employed

Silvie is employed as a dishwasher at the Happy Valley Coffee House. Her employment is terminated as the employer decides he no longer needs a dishwasher, because the kitchen-hand should be able to do those duties, as well as his own. 

After one and a half months, the employer realises that it just isn't working – and that in fact Silvie did a whole more than just dishwashing, and asks her to come back.

  • In this case, as Silvie is re-employed within 3 months, this break in the employment period will not break her continuity of employment.

Sarah took parental leave before she resigned

Sarah has resigned from her role at ABC Accounting. She commenced her employment 9 years ago. During that time, she took 12 months parental leave after the birth of her daughter.

ABC Accounting pays their employees 12 weeks of parental leave under their parental leave policy.

Sarah received 12 weeks of employer paid parental leave (EPPL) for the 12 weeks she was on EPPL. She also received the 18 weeks minimum wage payment under the government paid parental leave (GPPL) scheme.

Section 63(3)(b) of the LSL Act states that periods of unpaid adoption, maternity or paternity leave do not count towards an employee's period of employments for calculating long service leave.

  • In this example, the 12 weeks of EPPL Sarah took will count towards her period of employment. However, the 18 weeks GPPL will not count towards her period of employments as its not recognised as employer paid parental leave – and instead forms part of Sarah's period of unpaid maternity leave.

Sarah's total period of employment for long service leave purposes will be calculated as follows:

  • 9 years of employment minus 40 weeks unpaid parental leave (including 18 weeks GPPL) = 8 years, 12 weeks continuous employment.

Trish was on workers compensation before she resigned

Trish worked as a hairdresser with Hair Cutz Co. for 6 years before injuring herself at work. She was then on workers compensation for a further two years before she resigned from her role.

Under section 63(2) of the LSL Act, absences from work of not more than 48 weeks in any year on account of illness or injury count as part of the period of employment. 

This means that 48 weeks in each 52 week period of an employee's absence from work on account of illness or injury counts towards the period of employment – until such time as the employee either returns to work (in any capacity) or employment ends.

  • In calculating Trish's period of continuous employment, 48 weeks in each of the two years she was absent from work on account of illness or injury counts towards her period of employment for long service leave purposes.

Trish's employer therefore needs to calculate her long service leave entitlement as follows:

  • 8 years employment minus 8 weeks' absence due to illness/injury = 7 years, 44 weeks continuous employment.

On the day Trish resigns, she will have more than 7 years of employment, and is therefore entitled to long service leave under the LSL Act.

Need further assistance?

Looking for further assistance and advice about long service leave? Give Wage Inspectorate Victoria a call on 1800 287 287.

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