Can Employers Refuse Long Service Leave?

Employees taking long service leave (LSL) can be disruptive to business operations. However, it is an essential entitlement which employers owe to most employees across Australia

This raises a crucial question: when can employers validly refuse LSL?

As this article will show, the answer varies between each State and Territory.

Table of Contents

What is Long Service Leave?

Long Service Leave is paid leave which employees use after working for their employer for a long period of time. Significantly, the types of employees entitled to it and the relevant definition of a ‘long time’ varies across Australia. 

This is because the laws vary between each State and Territory. As such, the location of employment impacts upon an employer’s LSL obligations and when they can refuse it.

Variations Across Australia

In NSW and most other Australian states and territories, most casual, part-time, and full-time employees are entitled to Long Service Leave after 10 years of continuous employment. Some variations to this include Victoria, which requires them to have been working for at least 7 years for their employer.

As for the refusal of LSL by an employer, this is permissible in few circumstances. In NSW and most other parts of Australia, if an eligible employee does not agree to postpone the taking of leave, employers must permit the use of LSL as soon as is practicable. That is, employers may only refuse the allowance of LSL during times when it is reasonably impractical for the business to do so. 

Victoria legislation offers some guidance as to what this means, stating that valid grounds for refusal include where:

  • There is no feasible way of adjusting other employees’ working arrangements to compensate for the employee taking Long Service Leave
  • It is impractical to alter other employees’ working arrangements
  • It is impractical to recruit new workers to compensate for the employee taking LSL
  • A significant loss in productivity or efficiency will occur, or
  • There would be a significantly bad impact on the business’ customer service

In addition, NSW and other employers in Australia typically have the discretion to refuse LSL in advance. That is, the use of Long Service Leave before the entitlement actually accrues to the employee. Employers may also prevent employees from taking LSL in a number of separate periods, rather than in one continuous period.

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Payment In Lieu

In a number of states including NSW, it’s not permissible to simply pay out LSL entitlements. Indeed, in NSW payment for Long Service Leave entitlements without leave being taken is only to be done upon termination of an employee.

Important to Note

The information above applies to most employees across Australia. However, Long Service Leave entitlements are different for those under federal award agreements from before 1 January 2010. Government employees, as well as those in the building, construction, mining, and cleaning industries also have different entitlements.

Conclusion

Most types of employees may receive Long Service Leave entitlements in Australia. The refusal of requests for Long Service Leave are generally not permissible unless there are reasonable business grounds to do so.

For further information on Long Service Leave, you may wish to speak with an experienced employment lawyer.

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