Long Service Leave

In Australia, long service leave is an employment entitlement encoded in both state and federal law. Under Australian law, most workers are entitled to additional paid leave when they have worked for the same employer for an extended period of time. In most cases, an employee is eligible for long service leave after they have been in their position for between seven and fifteen years.

History

The origins of long service leave lie in the arrangements for staffing of the public service in colonial Australia. Throughout the nineteenth century, most government personnel in the Australian colonies were British subjects who could not easily return home to Britain for a visit, as the trip took up to two months by sea. To compensate for this tyranny of distance, after ten years of service, public servants were granted a furlough of three months, sufficient time to reach Britain and enjoy a month of recreation before returning. This long service leave afforded the employee security knowing that their position would still be available when they returned to Australia. Under social pressure, this privilege was eventually extended to other Australian workers in the 1950s, even though by then both the availability of Australian workers and the popularity of air travel had largely eliminated the original rationale for the leave. As a result of this historical context, Australia is the only country where long service leave remains a common benefit provided to loyal workers.

Legislative framework

Entitlement to long service leave is recognised in the federal National Employment Standards (NES). The NES are 11 minimum entitlements for employees across all Australian workplace relations systems. Other workplace instruments, including agreements, contracts, and awards, cannot offer less than the minimum set out in the NES. However, the NES does not go so far as to guarantee all Australian workers the right to long service leave. Rather, the NES recognises that most workers will have entitlement to long service leave due to specific laws in each state or territory.

However, these state and territory laws do not apply if the employee is already covered by a federal pre-modern award entitlement. An award that dates from before 2010 will stipulate the terms under which an employee can accrue long service. For instance, an employee in Victoria working under a pre-modern award may be entitled to long service leave after 11 years of continuous part time service under an industry award. In that case, the pre-modern award regulations apply rather than state-legislated rules.

For most workers, however, their entitlement to long service leave varies according to the specific jurisdiction where they work. As such, employers must abide by the regulations of the state or territory where the company is located. Companies that operate across state and territory lines must provide compliant long service policies to cover all employees. The specific state and territory’s law mandates the minimum number of years before eligibility and the amount of recreational leave. Generally, if an employee stays with a company for the mandated period (between seven and 15 years), they are eligible for up to ninety days long service leave at their current ordinary pay rate. For example, in NSW, the Long Service Leave Act 1955 allows for two months after ten years of service, while in the ACT, the Long Service Leave Act 1976 allows for just over six weeks of leave after seven years of continuous service. In most states, including New South Wales and Victoria, long-term casual employees are also entitled to long service leave.

Portable entitlements

As long service leave is a reward for continuous service, it is not available to all workers. Some industries favour short-term contracts, with workers moving from employer to employer during their working life, so they would miss out. In some jurisdictions, workers in some of these industries – including security, community service, building and construction, coal mining, and contract cleaning industries – can now access “portable” long service leave. A worker in one of these fields can continue to build long service leave while transitioning to new employers and projects. For instance, an employee who works for several different employers in the Queensland construction industry can access 8.67 weeks of QLeave after 10 years in the scheme. Eligibility for this scheme applies even if the employee works for the same employer in the Queensland construction industry during that time. In that circumstance, the employer will pay for the leave, though QLeave may refund some of the outlays.

Termination, resignation and company insolvency

When a long-term employee exits a company before they qualify for long service leave, they are sometimes paid out accumulated entitlement on a pro-rata basis. This usually applies if an employee leaves for any reason other than willful or serious misconduct. If an employee would otherwise lose their accumulated entitlements because of company insolvency, the federal government does have a Fair Entitlements Guarantee to cover the right to long service leave.

Companies that fail to provide statutory entitlements are civilly liable. For example, in 2024, the Woolworths Group Limited and its subsidiary Woolstar Pty Limited pled guilty to failing to pay more than 1,000 employees their long service leave entitlements. The company contravened section 9(2) of Victoria’s Long Service Leave Act 2018 by failing to properly calculate long service leave so that staff were unaware of their full leave entitlement. Under the Act, a body corporate faces a maximum penalty for each offence of 60 penalty units per day while the offence continues. The Magistrates Court in Victoria fined the companies over $1.2 million for systemic and widespread payroll failures that led to underpayments.

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