Long Service Leave Act Amendment - FAQs

On 24 March 2022, NSW Parliament passed laws which will provide greater flexibility about how and when long service leave may be taken in NSW workplaces.

The following FAQs were written to assist employers and workers in managing leave arrangements.

The Long Service Leave Act 1955 has been amended to allow an employer to give less than one month’s notice to a worker to take their long service leave entitlement, if the worker agrees.

Prior to the amendment an employer was required to give the worker one month’s notice before the long service leave commencement date.

Yes. Long service leave may be taken in advance where there is agreement to do so between the employer and worker.

The Long Service Leave Act 1955 has been amended to allow an employer and a worker to agree to taking leave in advance in smaller blocks, of no less than one day.

There are several ways this may work in practice, for example by agreement the worker may decide to work three days and take two days long service leave in a particular week.

Please note that if an employee’s employment is terminated before they achieve 10 years continuous service, the money paid for long service leave taken in advance may be recouped by the employer from any remuneration due on the termination of the employee’s employment.

Where the employer and worker agree, the taking of leave may be postponed.

When this occurs, the employer and employee may also agree that the amount paid for the leave to be taken at a later date will be whatever rate of pay the worker is earning at the time of the agreement instead of the rate of pay when the postponed leave is taken.

For example, if an employer and worker agree to postpone the leave for one year and the ordinary rate of pay of a worker at the date of the agreement is $700.00 a week – that is the amount the worker will be paid for the portion of the leave postponed regardless of whether the worker is earning a higher or lower amount of pay at that later time.

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Under some circumstances a worker who has completed five years (but less than ten years) of service may be entitled to a long service pro-rata payment if they resign as a result of illness, incapacity, domestic or other pressing necessity.

While the Long Service Leave Act 1955 does not define “domestic or other pressing necessity”, all the circumstances of the resignation are to be considered in determining whether an entitlement exists. The worker may need to demonstrate that the COVID-19 circumstances leave them no option but to resign and that it is the real or motivating reason for the resignation.

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Yes. The Long Service Leave Act 1955 has been temporarily amended to ensure that a worker’s long service leave continued to accrue if you were stood down without pay between 11 March 2020 and 31 March 2022 as a direct or indirect result of the COVID-19 pandemic.

No. Irrespective of the JobKeeper payment, the amendments made to the Long Service Leave Act 1955 only enable the employer to provide a shorter notice period to the worker, if the worker agrees. If there is no agreement, then the one month’s notice period continues to apply.

Where agreement has been reached for a shorter notice period, it should be documented and both the employer and worker should retain a copy of the agreement.

 

Irrespective of the source of funding of their wages or salary, a worker must be paid by their employer their ordinary remuneration when they are on long service leave or the average of the last 5 years, whichever is the greater. 

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The amendments to the Long Service Leave Act 1955 enable the employer and the worker to reach a mutual agreement regarding the taking of Long Service Leave, both in terms of the period of notice, i.e. if less than one month, and the manner in which the leave is to be taken, i.e. in multiple periods.

The Act requires that leave is to be given by the employer and taken by the worker as soon as practicable, having regards to the needs of the employer’s establishment.

However, situations may arise where mutual agreement is unable to be reached and operational or other business circumstances require that the leave is taken by the worker at a particular time.

The employer must demonstrate they have followed all requirements of the Act in the first instance including their attempts to reach mutual agreement with the worker regarding the taking of long service leave.

Where no agreement is reached, and a worker is unable to demonstrate why the taking of leave at the time specified is not “practicable”, the employer may give the worker a direction regarding the taking of long service leave with at least one month’s notice.

No. The worker’s long service leave can only be used to cover an absence during COVID-19 where there is mutual agreement between the worker and the employer to do so.

Any unilateral action by an employer to compel a worker to take long service leave, without any adherence to the requirements of the Act, may amount to a breach of the Act and could lead to prosecution.

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Yes. The Long Service Leave Act 1955 has been amended to allow an employer and a worker to agree to taking long service leave in smaller blocks, such as one or two days a week.

There are several ways this may work in practice, for example by agreement the worker may decide to work three days and take two days long service leave in a particular week. Alternatively, the leave may be taken in multiple blocks of leave provided there is agreement to do so.

Long service leave can now be taken in blocks of no less than one day by agreement between the employer and the worker.