Five Long Service Leave FAQs for Victorian Employers

In Victoria, the Long Service Leave Act 2018 (Vic) (Act) sets out employee entitlements to long service leave. Victorian employees are entitled to take long service leave after a minimum of 7 years’ of continuous service with one employer. Here are some commonly asked questions of our Employment, Industrial Relations and OH&S team.

I am thinking about selling my business. What happens to my employees’ long service leave?  

If the employees will continue to work for the new owners of the business, their accrued long service leave will transfer over to the new employer and will continue to accrue. The new employer must recognise an employee’s previously accrued long service leave entitlements.    

If the employees will not work for the new owners of the business and their employment will be terminated, any accrued and untaken long service leave must be paid to the employees by the previous employer.

Do casuals accrue long service leave?  

As long as there is continuous employment with an employer, casual employees are entitled to long service leave.

Where there are absences from work, a casual employee may still be entitled to accrue long service leave in certain circumstances. It is important to know what these circumstances are as they include situations where there has been agreement on the absence between the employer and the casual employee, or where the absence from work is caused by seasonal factors. 

What is the rate of pay when an employee takes long service leave?  

An employee gets their ordinary rate of pay when they go on long service leave. Ordinary pay is defined as the pay that an employee receives for working their normal weekly hours. The ordinary rate of pay does not include overtime or penalty rates. For a casual employee ordinary pay includes the casual loading rate.

Where an employee has no fixed weekly hours that they work or where an employee does not have a fixed ordinary time of rate of pay, there are averaging rules under the Act that apply.

Can an employee cash out their long service leave?  

Long service leave cannot be cashed out and must be taken as paid leave during employment. The only time payment can be made for long service leave is when employment ends, in which case any accrued and untaken long service leave must be paid to the employee in their final pay.

Workers in certain industries such as construction, community services, contract cleaning and security can take their long service entitlement with them if they change jobs but stay in the industry.

Can I direct an employee to take long service leave?  

An employer can direct an employee to take their long service leave by giving the employee at least 12 weeks’ written notice.

These FAQs are brief to illustrate commonly asked questions and do not constitute legal advice. Our Employment, Industrial Relations and OH&S team can assist if you need to clarify your long service leave obligations to your employees.

For further information please contact:

Jim Babalis
Special Counsel
T: 03 5226 8579
M: 0409 258 512
E: jbabalis@ha.legal