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Long service leave: employment termination

Work out how much leave is owing

On this page

  • Understand when an employee is, and isn't entitled to long service leave
  • Work out what long service leave is owed upon termination
  • Deal with long service leave during liquidation

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 the Employment Information and Compliance Unit by giving them a call on 1800 287 287 or send them an email.

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 LSL not taken. 

This will apply whether the employee has:

  • resigned – see our example below
  • had their employment terminated by the employer
  • been made redundant
  • died.

If LSL has already been taken

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

If an employee dies before taking LSL

  • If an employee has accrued LSL – but dies before it is taken – a payment will be due to the employee's personal representative.

Example – Marina resigns

Marina resigns from her employment after seven years and 6 months employment. 

Marina's LSL entitlement is calculated by taking:

  • 7 years multiplied by 52 weeks = 364 weeks
    • and
  • 6 months = 26 weeks
  • Add the two together; 364 weeks plus 26 weeks = 390 weeks in total.

The next step is to divide the total weeks by 60 – as Marina will receive one week's LSL for each 60 weeks of service. 

  • 390 weeks divided by 60 = 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 LSL unless there is at least 7 years of continuous employment.

Before 1 January 2006, there was no entitlement to a payment of accrued LSL unless the employee had reached at least 10 years of continuous employment.

If a company is liquidated

If a business is liquidated, it's 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 LSL 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 through:

Need further assistance?

Looking for further assistance and advice about long service leave? Give Employment Information and Compliance a call on 1800 287 287.

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