Long service leave is an entitlement that rewards employees for their length of service with a business. It is a key incentive to retain employees but it is important that employers are clear on which long service leave (LSL) provisions apply to their employees.
All Northern Territory MTA members will have the Long Service Leave Act 1981 (NT) apply to their employees. In SA, most employees will fall under the Long Service Leave Act 1987 (SA) (State Act). However, in specific circumstances, some members will have the Vehicle Industry – Repair, Services and Retail – (Long Service Leave Award) 1977 (Federal Award) apply.
MTA members who began their membership with the MTA prior to the 26th of March 2006 will have retained the pre-modernised award long service leave terms. This means that members who joined prior to 26 March 2006 will have their employees who are employed under the Vehicle Repair, Services and Retail Award 2020 come under the Federal Award. Any other employees (for example, administrative staff) will fall under the State Act.
This has significant implications for the employer and employee as the entitlements are different to that of the State Act. Under the Federal Award, an employee who has completed 15 or more years’ continuous service with their employer is entitled to:
13 weeks’ LSL in respect of the first 15 years of service; and a further 0.8667 weeks per year of service thereafter, however they are not eligible to take it until another 10 years of service has been completed.
Under the Federal Award, where an employee has worked continuously for an employer for more than 10 years but less than 15 years, the employee is entitled to pro-rata LSL upon resignation or termination.
In contrast, under the State Act an employee who has completed 10 or more years’ continuous service with their employer is entitled to:
13 weeks’ LSL in respect of the first 10 years of service; and
a further 1.3 weeks per completed year of service thereafter.
Under the State Act, where an employee has worked continuously for an employer for more than 7 years but less than 10 years, the employee is entitled to pro-rata LSL.
It is important that employers know which provisions apply to their employees and to keep them informed. The Federal Award provisions are less favourable to the employee and requires them to work longer before being eligible for long service leave. As such, to avoid confusion and disappointment, it is crucial to inform your employees of their entitlements. We recommend including which long service leave legislation applies to your employees in their employment contracts.
If your employee disputes their entitlement, you can direct them to contact SafeWork SA, which is the body that regulates long service leave in South Australia. They can confirm with the employee as to whether the Federal Award applies to them.
If you have any question regarding this, or want to confirm which legislation applies to your business, please contact the MTA Workplace Relations Team on 8291 2000, or at wr@mtasant.com.au.