Long Service Leave Entitlement in NSW

The Long Service Leave Act 1955

  • Applies to all employees in NSW – full time, part time and casual,
  • Entitlement – 2 months (8 2/3 weeks) after 10 years,
  • 1 month (4 1/3 weeks) after each additional 5 years,
  • Pro rata entitlement after 5 years service, under some circumstances,*
  • Must be taken as leave or paid on termination of employment.

*Pro-rata entitlement if employee:

  • Resigns as a result of illness, incapacity, domestic or other pressing necessity,
  • Is dismissed for any reason except serious and wilful misconduct, or
  • Dies.

Definition of workers:

  • Any person employed whether on salary or wages, piecework, outwork, salesman, canvasser, collector, commercial traveller, insurance agent,
  • Person paid wholly or partly by commission.

Continuous service not broken by:

  • Change in duties or position,
  • Transfer between companies within same group where employed by holding company or any one or more subsidiaries of that company and transfers to another company in group.

Interruptions that do not break continuity:

  • Employer approved absences from work,
  • Parental leave – but break does not count as service,
  • If caused by the employer and the employee returns to employment within 2 months – period of interruption does not count as service,
  • No break in continuity if business or part transferred as a going concern.
Type
of Leave
Break
in Continuity
Counts
as Service
Paid sick leave NO YES
Sick leave without pay NO YES
Paid annual leave NO YES
Employee requested leave without pay NO NO
Company directed leave without pay NO NO
Long service leave NO YES
Parental leave NO NO
Workers compensation NO YES

Payment of Leave

Rate of Payment – the higher rate between:

  • Ordinary time rate of pay in pay period prior to commencing leave, or
  • Average weekly rate of pay earned during the previous 5 years.
  • Shift allowances, penalty rates, overtime payments, fares, travelling time and other like payments not included

Bonuses and commissions:

  • Averaged over previous 12 months (or 5 years if 5 year average pay rate is used),
  • Is added to weekly rate to calculate leave payment,
  • If currently paid in excess of $144,000 per annum, bonuses are not included (this amount is indexed).

Payment during leave may be either:

  • Paid in full on commencement of leave,
  • Paid at ordinary rate of pay at normal pay intervals, or
  • In any other way agreed between the employer and employee.

If public holiday occurs during leave – additional day added if a normal working day for that employee.

Commencement of leave:

  • The employer may direct leave to be taken by giving at least one (1) month’s notice,
  • May be postponed by agreement – may agree leave will be paid at current rate when leave is taken in the future,
  • Leave may also be taken in advance on agreement between the employer and the employee – must be not less than one (1) month.

Taking the period of leave:

  • In one continuous period, or

If employer and employee agree:

  • 2 separate periods – if leave owing is 2 months,
  • 2 or 3 periods – if leave owing is between 2 months and 19 1/2 weeks,
  • 2, 3 or 4 periods – if leave exceeds 19 1/2 weeks.
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About Pendlebury Workplace Law

Brooke is a specialist workplace relations lawyer practising in the Sydney CBD. Brooke has developed a practice over many years that deals extensively with bullying, harassment, and discrimination issues within the workplace. Brooke also provides workplace training and is a trained workplace mediator, and conducts independent workplace investigations.
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