Most employees in NSW are entitled to two months (8.67 weeks) of paid long service leave after 10 years of service for one employer. Full time, part time and casual workers are all entitled to long service leave. The leave is paid at the employee’s ordinary gross weekly wage.
A person who has been employed by the same employer for five or more years is entitled to a pro-rata payment if they resign due to:
- Domestic or other necessity
The employee must notify the employer in writing at the time they give notice if they are resigning for one of these reasons.
An employee (or their representative or beneficiary) is also entitled to a pro rata long service payment if they have been working for the employer for five or more years and:
- Are terminated for a reason other than serious and wilful misconduct; or
- Pass away.
Pre-modern awards and registered agreements
New South Wales’ long service leave laws do not apply to employees who were previously covered by a federal pre-modern award prior to 1 January 2010. In this case, the long service leave provisions in the pre-modern award cover employees.
Similarly, employees who work under a registered agreement need to refer to the agreement for the long service leave provisions that apply to them.
Registered agreement terminated
If your workplace’s registered agreement is terminated, the provisions in either the pre-modern award or State and Territory legislation will dictate your long service leave.
However, employees can apply to Fair Work Australia before the agreement is terminated for an order that the long service leave provisions continue to apply after the agreement ends.
Portable long service leave
Employees who work in contract cleaning and building and construction are entitled to accumulate their long service leave over several projects and employers. The Long Service Corporation collects levies and payments to pay out workers in these industries.
The contract cleaning industry
The scheme covers workers employed under a contract to perform cleaning work. Full time, part time and casual workers are covered by the scheme. It applies to all work performed after 1 July 2011.
The scheme doesn’t cover someone who is:
- Employed and paid directly by the owner of the premises they clean,
- Contracted by a government authority including Commonwealth, State, Territory or Local,
- A supervisor who doesn’t spend most of their time also performing cleaning work,
- Employed to do mostly or solely managerial or clerical work,
- A partner in a partnership they work for,
- A director of the company they work for, or
- A trustee of the trust they work for.
The scheme covers cleaning work performed on commercial and domestic premises. It doesn’t include property maintenance.
How the scheme works
Employers are required to register workers with the Long Service Corporation. Additionally, every three months the employer must advise the Long Service Corporation of:
- The worker’s period of employment during that time, and
- The wages paid to the worker (excluding overtime and allowances).
The employer must pay the Long Service Corporation a levy of 1.7% of the wages the worker earned. This levy must not be deducted from the worker’s wage. It is an additional payment that the employer must make. The levy is paid into a shared fund that is used to pay contract cleaners when they make a claim for long service leave.
The Long Service Corporation records “service credits” for each period the worker is employed. This means that if you are employed for a year, one year (365 days) of service credits will be recorded for you. The service credits reflect the period of employment, not the actual number of days worked. The period includes any days that a worker does not work due to receiving worker’s compensation.
Any worker who signed up to the scheme by 31 December 2011 was given a bonus service credit of one year. Workers can leave the contract cleaning industry for up to four years before their long service leave entitlements will be affected.
When workers can claim their long service leave
Under this scheme, contract cleaners are entitled to two months (8.67 weeks) of long service leave after 10 years of service in the industry. Workers are entitled to a further month (4.33 weeks) of long service leave for each additional five years of service.
Workers are entitled to take their long service leave within six months of it accruing. The worker or employer may apply to the Long Service Corporation to extend this period. Alternatively, the worker and employer may come to a joint agreement to extend the period by up to five years. The employer must notify the Long Service Corporation of the agreement within seven days of it being finalised.
Payment in lieu of long service leave
A pro rata payment of long service leave can only be taken if the worker has at least five years of service credits and:
- Has permanently left the industry 20 or more weeks ago; and
- Service credits have not been recorded for that 20 (or more) week period; or
- The worker has passed away.
If a worker passes away, their long service leave payment will be made to a representative or beneficiary. The application for payment must be made within 2 years of whichever is the latter out of the worker’s suspension of registration or the date they passed away.
The building and construction industry
Portable long service has been available to workers in the building and construction industry in NSW since 1975. The scheme covers employees who spend most of their time performing eligible building and construction work. Supervisors who spend most their time performing eligible work are also covered by the scheme. Full time, part time, casual workers and sole traders are all covered by the scheme.
There are similar schemes in other states and territories in Australia. Each scheme has particular rules about who and what type of work is covered. However, all the schemes recognise eligible work performed in another state. This means that a building and construction worker can claim long service leave by accruing work in different states and territories.
Each state or territory scheme issues a registration number. It is essential that workers register in each state they work in so that their period of employment can be recognised.
Registering under the scheme
Workers in the construction industry can register with the Long Service Corporation. Alternatively, employers may lodge a ‘Start Notice’ on the employee’s behalf. Once the application or notice has been received and approved, the worker is sent a registration card with their registration number.
Workers must notify their employer of their registration number for each new job they start. Workers must notify the Long Service Corporation of a change in their address and if they move interstate, they must register with the relevant scheme in that state.
Service credits in the construction industry are different from credits in the contract cleaning industry. Building and construction workers accrue service credits for each day they work and the maximum number of days credited each year is 220. Therefore 220 days is equivalent to one year of service.
The Long Service Corporation updates the service credits of workers on a wage or salary based on the notifications from employers at the end of the financial year or when the worker’s employment is terminated. If a worker is self-employed, the Long Service Corporation updates their service credits based on notifications from their tax agent.
It is up to the worker to make sure that their service record is accurate and updated and that their registration is still current.
Generally, workers can only receive service credits for work performed after registration. However, registered workers can apply to the Corporation for special consideration to have their registration backdated. This would allow earlier work to be counted towards long service leave.
The Long Service Corporation must be satisfied that there are ‘special circumstances’ before they can backdate registration. ‘Special circumstances’ have to be significant and specific to the worker. Factors may include:
- geographical isolation,
- communication difficulties,
- personal crisis or trauma.
Simply not being aware of the portable long service leave scheme is not enough to receive special consideration.
Long service payment
After 10 years of service, building and construction workers are entitled to a long service payment rather than leave. The payment is two months (8.67 weeks) of pay at the award rate or the rate agreed to in a registered agreement. Workers are entitled to a further one month’s pay (4.33 weeks) for every additional five years they work in the industry.
Workers who are employed by one employer for 10 consecutive years have three options:
- Take a payment under the scheme with no entitlement to leave; or
- Take two months long service leave paid by their employer. (The employer can make a claim for the payment from the Long Service Corporation); or
- Do nothing and take a payment at a later date.
How payment is collected by the Long Service Corporation
Unlike the contract cleaning scheme, employers do not pay a levy for construction workers. Instead, the scheme is funded by a levy on building and construction work of $25,000 or more. The levy is paid by the person or organisation for whom the work is being done.