A holiday might be on the horizon. 

The Long Service Leave Bill 2017 was introduced late last year and if passed, it will change Victoria’s long service leave scheme in quite a few ways.

Business owners should be prepared for potential upcoming changes, and employees should also familiarise themselves with the Bill, so they know how and when they can use their LSL.

Some changes to expect (if the Bill is passed) include: 

Allowing LSL to be taken sooner

Employees, start bookmarking those cruise deals that have been popping up on your Facebook page – you might get a chance to use them sooner than you think!

Currently, you cannot access your long service leave until you reach ten years’ continuous service with your employer.

The LSL Bill will allow employees to access their long service leave after seven years’ continuous service. And luckily, the new rules will apply to leave that has accumulated before the bill is passed (if/when it passes).

Breaking up annual leave

The LSL Bill allows employees to take long service leave one day at a time if the employee and employer agree, rather than being forced to take it in one big chunk of time. Very good news for those who want to ease into retirement!

Transferring assets

Currently, when a business is sold or its assets are transferred to a different business and the second business continues the employment of an employee, the incoming business takes on responsibility for a transferring employee's long service leave entitlements. The employee's service with the old employer is counted when calculating the employee's long service leave entitlement with the new employer.

"Assets" is currently defined as including land, plant and equipment. The new Bill removes those specific examples, and replaces the definition with an inclusive definition of "tangible and intangible assets". As such, the situations where long service leave entitlements will carry across to a new employer because of a transfer of assets appears to be considerably wider under the proposed Bill.


Averaging hours of work

Under the current LSL Act, where employees change their hours of work during the 12 months immediately before taking long service leave, their normal weekly hours of work for calculating that leave are averaged over the previous 12 months or 5 years, whichever average number is the greater. However, the LSL Bill provides an additional third option whereby the hours worked are averaged over the full period of continuous employment, and the employee will be entitled to the greater of the three averages.

Currently, the average hours of work used when calculating the entitlement to long service leave is based on the greater of the average hours worked over the previous 12 months or the previous five years. The new Bill retains this, but also adds a further method, which is the average hours worked over the whole period of continuous service. Employees will then be entitled to the greater of the three methods of calculation provided by the Bill.


Casual employees

Casual employees are currently entitled to long service leave if they meet the continuous service eligibility requirements. Their continuity of service is currently broken if there is more than a three-month gap between assignations.

The new Bill adds an exemption to the break in continuity of service, where a casual employee can take up to two years of parental leave without losing their entitlement to LSL.

Parental Leave

Any period of paid parental leave, and up to 12 months of unpaid parental leave (or other forms of unpaid leave) will count as continuous service; and long service leave will continue to accrue during that time.

Any period of paid or unpaid parental leave more than 12 months long will not break the continuity of service, but will not count as service unless otherwise agreed on by the employer and employee.

Who can apply for LSL

The new scheme clarifies which employees are not covered by the requirements of the LSL Act, including those who are entitled to long service leave under a Victorian Act other than the LSL Act.

Employers, don’t forget to:

  1. Seek legal advice regarding how the changes will affect your business;
  2. Prepare to adjust your payroll system as required;
  3. Update relevant policies and procedures to reflect the changes.