A Guide to Long Service Leave for Australian Businesses

As an HR manager or business owner in Australia, you need to understand long service leave entitlements and obligations, which are often outlined in the employment contract. 

The Long Service Leave Act 1955 governs these entitlements and obligations, making it a big across the country.

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This paid long service leave is a way to reward employees for their loyalty and commitment to the business over a long period.

Long service leave has existed since the early 20th Century when it was introduced to give workers a break and rest after many years of service. Today, it’s part of Australian employment law and ensures employees get fair pay for their long service.

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Here are some general guidelines:

• Ten years of continuous service with the same employer in most states and territories. Depending on the jurisdiction, eligibility periods can range from seven to fifteen years. For example, Victoria’s benchmark is seven years, not 10.
• Full-time and part-time employees accrue leave on a pro-rata basis.
• Casual employees may sometimes be eligible depending on the state or territory laws.
• Breaks in service due to approved leave (e.g. parental leave, sick leave) or temporary absences won’t affect continuity of service. Unpaid parental leave does not break the continuity of service for long service leave purposes.

Note: If an employee transfers between related companies or businesses, their service will be considered continuous for long service leave purposes.

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But it varies across jurisdictions, so check the laws in your state or territory.

It is important to calculate your accrued long service leave accurately. A calculator can help estimate the amount, but consulting with experts is advisable for a comprehensive calculation that considers all relevant circumstances.

Here’s a table of the standard long-service leave entitlements in some states and territories:

Here's a table summarising the long service leave entitlement periods after ten years of continuous service with the same employer across different states and territories in Australia:

*In Victoria and the Australian Capital Territory, the standard long service leave entitlement period is after seven years of continuous service, not ten years.

Notes:

• The entitlement is based on continuous service with the same employer.
• Part-time employees accrue long service leave on a pro-rata basis.
• Some awards, agreements, or employment contracts may provide additional entitlements beyond the statutory minimums.
• Casual employees may also be eligible in some cases, depending on the specific state or territory laws.

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1. Record-keeping: Keep accurate and up-to-date records of each employee’s service duration, leave accruals and any breaks in service. This will help you calculate long-service leave entitlements correctly.
2. Policies and procedures: Develop clear policies and procedures in your HR strategy for requesting, approving and managing long service leave. Communicate these policies to all employees so everyone is transparent and fair.
3. Staffing and workload management: When employees take extended long service leave, plan for staffing and workload management to ensure business continuity. Consider cross-training employees, hiring temporary staff or redistributing tasks.
4. Encouraging leave: Encourage employees to take their long service leave. Prolonged periods without leave can lead to burnout, decreased productivity and potential legal issues if leave accruals become excessive.
5. Dispute resolution: Establish a fair and transparent process for resolving disputes or disagreements related to long service leave entitlements or requests.
6. Unused long service leave: Effectively manage unused long service leave, as it may need to be paid to employees upon termination.

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• Long service leave is a statutory entitlement for employees in Australia who have been loyal and committed to their employer for a long period of time.
• Eligibility criteria and entitlements vary across states and territories but generally, employees are eligible after 10 years of continuous service.
• Managing long service leave involves record-keeping, policies and procedures, staffing and workload planning and encouraging employees to take their leave.
• Employers should prioritise communication, compliance, fairness and work-life balance with long service leave.
• Non-compliance with long service leave can result in legal consequences and damage your business.

Need help to keep up with all your HR needs and responsibilities? See how our HR Advisory service can help you.

For more information on long service leave regulations in Australia, visit the Fair Work Ombudsman website.