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CLAUSE NOTES
Long Service Leave Amendment Bill 2011
Clause 1: Short Title
This clause provides that the short title of the amending
legislation is the Long Service Leave Amendment Act 2011.
Clause 2: Commencement
Under this clause, the Bill is to commence on the 1 July 2012.
The proposed amendments will take effect on that day.
Clause 3: Principal Act
This clause provides that the Principal Act referred to in the Bill
is the Long Service Leave Act 1976. The Bill is making
amendments to that Act.
Clause 4: Section 8 amended (Period of long
service leave to which employees, other
than mining employees, are entitled)
This is the key clause in the Bill. This clause amends the long
service leave entitlements provided in section 8 of the Act.
The Act currently provides that employees are entitled to:
· 13 weeks of long service leave on completion of 15 years'
of continuous employment; and
· 8 weeks of long service leave in respect of each
additional 10 years of continuous employment.
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In general terms, "continuous employment" is uninterrupted
employment with the same employer. However, the Act does
allow for some interruptions without affecting continuity of
employment, for example, the taking of annual or long service
leave, maternity leave, standing down for a period not
exceeding 6 months on account of slackness of trade, jury duty
etc. The Act also deems continuous employment where there
has been a transmission of business and the employee has been
employed by the new employer within 2 months.
Under this clause, employees will be entitled to:
· 8 weeks of long service leave on completion of 10 years
of continuous employment; and
· 4 weeks of long service leave in respect of each
additional 5 years of continuous employment.
This means that employees will have an initial entitlement to
long service leave 5 years earlier than under the current
provisions of the Act. The subsequent entitlement to long
service leave is also brought forward from entitlement after
each additional 10 years to after each additional 5 years.
However, the rate of accrual of long service leave remains the
same. Under the existing provisions of section 8, 13 weeks
leave after 15 years works out as an accrual rate of 0.8667
weeks per year. The accrual rate under the proposed
entitlement of 8 weeks leave after 10 years is also 0.8667
weeks per year.
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All of the proposed amendments made by this clause relate to
section 8(2) of the Act. Paragraphs (a) (e) make the principal
amendments to section 8(2)(a)(i) and (ii) to enact the new long
service leave entitlements. The other proposed amendments
simply reflect the proposed new entitlements.
Note the proposed amendments do not apply to mining
employees. Long service leave entitlements for mining employees
(employees who are employed in, at or about metalliferous mines)
are set out in section 8A of the Act.
Clause 5: Section 9 amended (Payment in lieu of
long service leave on death of employee)
Section 9 of the Act provides for the situation where an
employee who is entitled to long service leave dies before or
whilst taking that leave. Under section 9, the employee's
employer is to make a payment to the employee's personal
representatives in lieu of long service leave.
Section 9(2) of the Act provides for pro rata payment for:
· any additional period of continuous employment since
the deceased employee's last accrual of entitlement or
· continuous employment of 7 or more years but less than
15 years (the first entitlement point).
This clause amends section 9(2) to change any references to 15
years to 10 years, reflecting the proposed new entitlement
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periods as per clause 4 (see clause note in respect of clause 4
above).
Clause 6: Section 12 amended (How and when
long service leave shall be taken)
This clause amends section 12(10) of the Act.
Section 12 sets out how long service leave is to be taken. It
provides that leave is to be granted by an employer as soon as
practicable after the employee becomes entitled to it having
regards to the needs of the employer's establishment.
Section 12(10) provides that an employer is not generally
required to grant leave to an employee unless the period of
leave the employee is entitled to is equal to or greater than 13
weeks for the first period of entitlement and 8 weeks for a
subsequent period of entitlement. This clause amends section
12(10) to reflect the change in entitlement made by the Bill (as
per clause 4 see clause note above), i.e., the period of leave for
the first period of entitlement will be 8 weeks and for
subsequent periods of entitlement will be 4 weeks.
Clause 7: Section 27 inserted (2011 transitional
arrangements)
This clause inserts a new provision section 27 in relation to
the transitional arrangements applying in respect of the Bill.
The proposed new section 27 refers to a new Schedule
(Schedule 3) which sets out the transitional arrangements in
detail (see the clause note in respect of clause 8 below).
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Clause 8: Schedule 3 inserted (2011 transitional
arrangements)
This clause inserts a new Schedule (Schedule 3) which sets out
the transitional arrangements relating to the Bill.
From the 1 July 2012 (the commencement date), the new
entitlements provided in the Bill of 8 weeks' long service
leave on completion of 10 years of continuous employment and
4 weeks' long service leave in respect of each additional 5
years of continuous employment will apply to all employees
covered by the Act. However, under the transitional
arrangements set out in the proposed new Schedule 3, there
are differences in when employees will be able to take long
service leave depending on their number of years of continuous
employment.
The new Schedule 3 includes a number of definitions (Schedule
3 clause 1). A key definition is the definition of "2011 transition
day" which means day on which the Bill commences 1 July
2012. This is the key date that the transitional arrangements
revolve around.
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The transitional arrangements set out in the Schedule have the
following effects:
Employees with less than 9 years of continuous
employment as at 1 July 2012 (referred to as "new continuing
employees" in Schedule 3)
Although not directly affected by the transitional arrangements,
these employees have been included in Schedule 3 to remove
any doubt or uncertainty.
Employees in this category will have to work the additional
years of continuous employment required to reach 10 years of
continuous employment (the new initial entitlement period).
For example, an employee who commenced employment with
his current employer on 1 June 2004 will have just over 8 years
of continuous employment on 1 July 2012. On completing an
additional 2 years of continuous employment, he will be eligible
for long service leave on 1 June 2014.
If an employee's employment is terminated prior to reaching 10
years, that employee may be entitled to a pro rata long service
leave if the requirements in the Act (section 8(3)) are met, that
is:
· 7 or more but less than 10 years of continuous
employment; and
· Employment terminated for one of the following reasons:
- termination by the employer for any reason other
than serious or wilful misconduct;
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- termination on account of the employee reaching
the age for retirement;
- termination on account of illness of the
employee;
- termination on account of incapacity or domestic
or other pressing necessity (of the employee).
Employees with 9 years or more but less than 12 years of
continuous employment as at 1 July 2012 (referred to as
"intermediate continuing employees" in Schedule 3)
These employees will not be able to take or be granted long
service leave before 1 July 2013 (Schedule 3 clause 2(2)) (note
the 12 month period between the 2011 transition date and 1 July
2013 is referred to as the "2011 transition period" in the Schedule).
For example, an employee with 11 years of continuous
employment as at 1 July 2012 will meet the qualification period
for an initial entitlement to long service leave (i.e., 8 weeks
after 10 years), however, under the transitional arrangements,
they will have to wait until on or after 1 July 2013 to take their
long service leave.
Employees in this category can make an application for long
service leave during the 2011 transition period for long service
leave that is to be taken after on or after 1 July 2013. For
example, an employee could put in an application on 1 May
2013 for long service leave to be taken from 1 July 2013
(Schedule 3 clause 2(3)).
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It is important to note that the transitional arrangements do
not prevent an employee in this category (an intermediate
continuing employee) from receiving their entitlements in the
event that the employee leaves their employment with the
employer for any reason before 1 July 2013 (for example, to go
to a better paid job with a different employer). Similarly, if the
employee dies whilst still in continuous employment with the
employer but prior to 1 July 2013, the employee's personal
representatives (estate) will be entitled to a payment in respect
of the employee's long service leave entitlement.
Employees with 12 years or more of continuous employment
as at 1 July 2012 (referred to as "long-term continuing
employees" in Schedule 3)
These employees will immediately be able to take long service
leave, subject to other provisions in the Act*, on and from 1
July 2012 (Schedule 3 clause 2(1)) (*Note under section 12 of the
Act, when an employee becomes entitled to long service leave, that
leave is to be granted by an employer as soon as practicable having
regard to the needs of the employer's establishment. Section 12 also
provides that long service leave may be postponed to such date as is
agreed upon between the employer and employee, or in default of
such agreement, as the Secretary directs).
The entitlement will be to 8 weeks' long service leave on
completion of the first 10 years of continuous employment.
There will then be an entitlement to 4 weeks' long service
leave in respect of every additional 5 years of continuous
employment, that is, at 15 years, 20 years, 25 years etc.
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Schedule 3 clause 2(4) prevents double dipping so that an
employee with 15 or more years of continuous employment
who has already taken long service leave under the existing
provisions of the Act (before the amendments commence)
cannot get another lot of long service leave under the new long
service leave entitlements for that same period of employment.
An employee in that situation will be entitled to another 4
weeks of long service leave on reaching the next qualification
period 20 years, 25 years etc.
Clause 9: Repeal of Act
This is a standard repeal provision to remove the empty shell of
the Bill after all its provisions have been transferred and come
into effect in the Principal Act.
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