The following blog will provide you with information on Long Service Leave (LSL), including what it means for both the employee and the employer, how to calculate it and the legislation and regulations surrounding it.

1. Long Service Leave
ADP Insider
Long Service Leave - wading through the
complexities.
January 20, 2014 - by Sue Warren
While LSL is included as one of the 10 National
Employment Standards, it is actually based
on State and Territory regulations (Acts). As a
result LSL entitlements vary based on where the
employee is working.
Unlike annual or personal leave which accrues
in hours, LSL accrues as a number of weeks
of leave. The weeks accrued are based on the
number of years worked. For example in NSW and
Victoria employees receive 0.8667 weeks of LSL
for each completed year. Therefore an employee
with 11.5 years of service would have accrued
9.967 weeks long service leave. (11.5 years X
0.8667 weeks).
When employees are entitled to be paid LSL you
have to calculate the amount to be paid based
on their normal weekly hours. This is easy for
permanent employees who have never changed
their hours, however where an employee’s hours
have varied, you have to calculate the weekly LSL
amount as:
• The greater of the average hours over the
preceding 12 months, or the preceding five
years (NSW and VIC)
• The average weekly hours over 3 years (SA)
• Total ordinary hours worked / 52 X 0.8667
(QLD)
• Average weekly hours over period of
employment (WA)
• Average weekly earnings over previous 12
months (TAS and NT).
In Queensland and Western Australia this means
you have to keep all your employment records
back to the hire dates of your oldest employee.
You also need to check the relevant LSL Act
for the requirements for employees paid
commissions and bonuses.
Untaken long service leave (and pro-rata) is
usually paid on termination, although this can
depend on the reason for the termination and the
applicable LSL Act.
Victoria is straightforward as you pay pro-rata
LSL to all employees at 7 years, regardless of
the termination reason. All other states are more
complex. For example in NSW you have to pay
it out at 5 years if the termination is initiated by
the employer for anything other than serious and
wilful misconduct. When the employee resigns
because of illness or incapacity, or for domestic
or pressing necessity it is also paid at 5 years. The
challenge is defining what constitutes domestic of
pressing necessity.
As rules vary in each LSL Act other points to
consider include:
• Is their rules about when the employee has
to take their LSL
• Over how many separate periods can you pay
the LSL
• Can LSL be cashed in – in NSW, VIC, ACT
and NT it can’t under any circumstances
(other than at termination)
• What hours, and how often does a casual
have to work, to maintain continuous
employment
• What constitutes a break in service
• Is LSL increased a day for each public
holiday
• Do employees forfeit their LSL if they worked
elsewhere while on leave
• Are employees working in the building &
construction/mining industries as the rules
differ.
For additional information on LSL refer to the LSL
Acts for each applicable state or territory at:
New South Wales - Long Service Leave Act 1955
Victoria - Long Service Leave Act 1992
Queensland - Industrial Relations Act 1999
South Australia - Long Service Leave Act 1987
Western Australia - Long Service Leave Act 1958
Tasmania - Long Service Leave Act 1976
Northern Territory - Long Service Leave Act
Australian Capital Territory - Long Service Leave
Act 1976
See more at: www.adppayroll.com.au/adpinsider
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"While LSL is included as one of the 10
National Employment Standards, it is
actually based on State and Territory
regulations (Acts). As a result LSL
entitlements vary based on where the
employee is working."
Sue Warren
Learning & Development Consultant
ADP Australia
Wading through the complexities