Long Service Leave

By Justin Lillyman

Long service leave (LSL) is an entitlement unique to the Australian industrial relations system that has its origins in the colonial public services of Australia. LSL was awarded to long serving colony employees to enable them sufficient time to visit the United Kingdom.

Each State and Territory throughout Australia operates in accordance with its own unique LSL legislative provisions, and only have coverage in their respective State or Territory (as distinct from national coverage). In Western Australian LSL is governed by the Long Service Leave Act 1958 (WA) (LSL Act).

Where employees are covered by a modern award (I.e. Real Estate Industry Award 2020) or enterprise agreement that may contain specific provisions and/or entitlements to LSL, these terms apply subject to any terms contained in the LSL Act. This means that employers must consider the LSL entitlements in these industrial instruments in conjunction with those contained in the LSL Act and provide employees with the more beneficial entitlement. For example, an enterprise agreement may provide 13 weeks of LSL after a qualifying period of 7 years’ continuous service with the employer. The LSL Act, however, prescribes a LSL entitlement of 8 2/3 weeks after 10 years’ continuous service. As the former is more beneficial to the employee, they will receive the quantity of LSL prescribed in the enterprise agreement.

Where an employee is employed on a ‘commission only’ basis the employee’s ordinary time rate of pay for the purposes of LSL is the average weekly amount earned by the employee in the 12 months prior to the employee accessing their LSL entitlement. To calculate the average weekly rate of pay for a commission only employee, the commissions earned by the employee over the 12 months prior to the employee accessing their LSL entitlement are totalled and this figure is divided by 52 (as there are 52 weeks in a year). This rate should then be applied to the number of weeks LSL owing to the employee.

The REEFWA Contracts currently allow for the paying of long service leave in lieu of the entitlement being taken by mutual agreement between the Employee and Agent. This practice has been subject to contention as to whether LSL can be cashed out in advance of the entitlement coming due, however no definitive ruling by a tribunal or court has yet been made on the matter.  Please be aware that the McGowan State government has flagged possible legislative changes in the future banning the paying of LSL in advance of the entitlement coming due.

If you have any queries in relation to LSL, please contact REEFWA via email: ReefWA@cciwa.com or on (08) 9365 7510,  in addition, CCIWA has available a LSL Guide for $253.00.

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