Long service leave entitlements and continuous service

The entitlement to long service leave is based on a qualifying period of continuous service.

Employees are entitled to take 8.6667 weeks of paid long service leave after a period of 10 years' continuous service.

When an employee has completed their first 10 years' of continuous service, they are entitled to take an additional 4.3333 weeks' paid long service leave once they have completed a further 5 years' continuous service. For continuous service beyond this point, access to further leave accrued is not subject to a qualifying period.

On termination of employment an employee may be entitled to receive a payment for the balance of any long service leave accrued. Refer to 'Proportionate payment (pro-rata) of long service leave on termination of employment' below.

Full-time employees

Employees are entitled to take 8.6667 weeks of paid long service leave after a period of 10 years' continuous service.

Long service leave is paid at the ordinary rate (i.e. excluding overtime payments) being paid to the employee at the time of taking the leave. If an employee is paid above the award rate, the long service leave is to be paid at the higher rate.

Mixed employment status

Long service leave entitlements for employees who have had a mixture of employment status (full-time, casual or regular part-time) during their continuous service are calculated using the method outlined below. The total ordinary hours used in the calculation will include both the hours while employed as a full-time employee as well as those while employed as a casual or regular part-time employee.

Casual and regular part-time employees

The qualifying period for long service leave entitlements for casual or regular part-time employees is the same as that for full-time employees (i.e. leave is due after 10 years' continuous service).

As long service leave entitlements are based on continuous service it is important that complete and accurate time and wages records are kept by the employer.

An employer is required to keep a record of the total number of ordinary hours worked by each casual employee from the start of the employee's service worked out to and including 30 June each year.

It is recommended that a similar record is also kept for part-time employees.

The entitlement to long service leave is calculated as the number of ordinary hours for the complete period of employment divided by 52, multiplied by 8.6667, then divided by 10, as shown below:

• total ordinary hours worked ÷ 52 x 8.6667 ÷ 10 = number of hours long service leave.

Note: Whilst the number of ordinary hours will vary depending on length of service, the remainder of the formula does not change.

Casual employees

As from 30 March 1994, all continuous service of a casual employee is taken into account when calculating long service leave entitlements. However, the continuous service may end if the employment is broken by more than 3 months between the end of one employment contract and the start of the next.

A casual employee is entitled to be paid at their 'loaded' casual hourly rate.

Continuous service

Continuous service refers to paid working time and paid leave.

Long service leave entitlements are based on continuous service with the same employer including instances where the Industrial Relations Act 2016 states that an employee's continuity of service is:

• taken to be with the same employer
• or
• not broken in certain circumstances.

Unpaid leave

A period of unpaid leave:

• may not break the continuity of service
• does not count as service
• includes the Australian Government Parental Leave Pay scheme.

Anniversary dates will need to be adjusted to reflect any period of unpaid leave.

Absences from work

Generally, the only absences from work which count as continuous service to determine a long service leave entitlement are periods of paid leave. Periods of absence on WorkCover may also count as continuous service to determine a long service leave entitlement.

Long service leave does not accumulate during unpaid parental leave but such leave does not break the continuity of service.

The long service leave entitlement is based on a period of continuous service. Continuity of service may be broken by certain absences from work which means time served prior to the absence will not be included when calculating future entitlements. However, an employee’s continuity of service is not broken for the following reasons:

• absence from work on leave (paid or unpaid and for any length of time) granted by the employer, including such absences through illness or injury
• termination of the employee's service because of illness or injury, provided the employee is re-employed by the same employer (after any length of time) and the employee has not engaged in other work during the absence
• termination of the employee's employment if the employee is re-employed by the same employer within 3 months
• interruption or termination of an employee's service by the employer due to an industrial dispute or slackness in business or trade if the employee is re-employed by the same employer (after any length of time).

Proportionate payment (pro-rata) of long service leave on termination of employment

Between 7 and 10 years' continuous service

Employees may have an entitlement to receive proportionate payment of long service leave on termination of employment after completing 7 years continuous service.

However, employees who have completed 7 but less than 10 years' continuous service are entitled to pro-rata long service leave only if the primary reason for the termination falls within the following criteria:

• the employee's service is terminated by their death
• the employee terminates their service because of their illness* or incapacity or because of a domestic or other pressing necessity
• the employer dismisses the employee because of the employees illness*
• the employer dismisses the employee for a reason other than the employee's conduct, capacity or performance
• the employer unfairly dismisses the employee.

*illness includes injury, incapacity or other medical condition (amendment operates from 22 June 2020).

More than 10 years' continuous service

An employee who has 10 or more years' continuous service, has an automatic entitlement to the payment of long service leave on termination of employment and this is not subject to the above listed criteria.

After the completion of 10 years' service, the entitlement for pro-rata long service leave is based on the employee's full period of continuous service. For example, an employee who had 12 years' service would be entitled to a payment of 10.4 weeks' long service leave (8.6667 + 1.73333 weeks).

Also consider...

• Entitlements for long service leave are provided for in the Industrial Relations Act 2016.