Long service leave is a period of paid leave for employees who have been working for the same business for a long period of time.
Long service leave:
- Is generally governed by state and territory laws;
- Can generally be taken after 10 years continuous service;
- Is generally paid at the employee’s ordinary rate of pay;
- Can‘t be cashed out;
- Is paid out to eligible employees upon termination of employment (minus any amount already taken); and;
- May apply to casual employees.
Long service leave and the National Employment Standards
Long service leave obligations are outlined in the National Employment Standards (the NES). At this stage, the NES preserves long service leave entitlements in awards and agreements as they were at 31 December 2009. If an employee did not have any entitlement in an award or agreement, their entitlement to long service leave will generally comes from State or Territory long service leave legislation. This is intended to be temporary and will be replaced by a national long service leave standard in the future.
Payment of long service leaves upon termination
Depending on the state in which a business operates, an employee may be eligible for a pro-rata payment of long service leave on termination. This is usually after a minimum period of 5 years continuous service but sometimes will be longer. Employers and employees will need to check with their relevant state authority to find out a particular employee’s long service leave entitlements.
If an employee is entitled to payment of long service leave on termination, they must be paid their accrued long service leave entitlements at their current ordinary rate of pay.
An employer is required to keep records of all leave taken by their employees. This includes all paid leave, such as long service leave.