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Long Service Leave – lots of questions. We have the answers…

As the year’s end draws near, IEU staff are receiving many questions about Long Service Leave (LSL).

Many members are confused by, or unaware of, the ‘rules’ which govern LSL. Adding to this confusion, the legislation can be enhanced by conditions found in an Enterprise Agreement (EA) or Employer Policy.

That is why it is always important to seek the correct advice before making decisions related to LSL.

In this article, we provide a basic overview of how LSL works in South Australia and what to bear in mind when accessing the entitlement.

How LSL works in South Australia

LSL is legislated for via the South Australia Long Service Leave Act 1987 (the Act, as updated from time to time).

Our state’s LSL Act is quite unique, in how the entitlement accrues and it’s value determined. While other states have an accumulation model based upon the employee’s fraction of work; i.e. the greater the fraction of work the greater the quantum accrued, the South Australian model operates quite differently.

In South Australia, LSL accrues at the rate of 1.3 weeks (9.1 calendar days) for each completed year of service, irrespective your fraction of employment. After 10 completed years of service a full-time, part-time or casual worker is entitled to 13 weeks of leave (10 x 1.3 = 13wks)

To be clear, a part year of service does not accrue any LSL. For example if you work 10.8 years for an employer you still accrue 10 x 1.3 = 13 weeks of LSL.

The entitlement value (the salary paid during the leave) will depend on two things:

  1. your current ‘ordinary weekly rate of pay’; and,
  2. the average hours of work over the 3 years immediately prior to the taking of the leave.

It should be noted if your ordinary weekly rate of pay varies during the period the leave is taken the variation must be reflected in your LSL payments. For example, if a salary increase ‘kicks in’ during the leave it must be passed on at the point it takes effect including in LSL payments.

With respect to hours of work, if over the last 3 years an employee worked full time (for example), then the LSL is paid at their ordinary full time weekly rate of pay. If the employee worked at 0.5 for each of the last three years they will receive their ordinary 0.5 weekly rate of pay.

However, if over the last 3 years an employee had worked different fractions — for example one complete year of each of the following: 1.0, 0.6, 0.5, then the average across the three years is 0.7 (1.0 + 0.6 + 0.5 = 2.1/3 = 0.7). Therefore, the employee will be paid at 0.7 of the current weekly salary across the period of leave.

This system favours employees who have started employment as part time, and in the years before taking LSL, moved to full time work. However, the opposite is true for people who are:

  • transitioning from full time to part time work with retirement in mind or
  • those who have accessed parental leave and returned part time (even if retaining their substantive fraction of employment),

as the paid value of the LSL will be diminished.

On that basis it is always good practice to contact your IEU Organiser before you decide to change your fraction of employment or take this leave.

How many years until I can take long service leave?

Under the Act, entitlement to take long service leave arises once you have completed 10 years of service. However many EAs provide access to a pro-rata entitlement after 7 or 8 years, because the leave accrued equates to a school term and therefore assists schools deal with it on an operational level.

After 7 or more complete years of service the Act requires the accrued entitlement to be paid out if the employment contract is ended by either party.

It is important to note that paid out (or cashed out) LSL, normally does not attract superannuation payments and so many employers chose not to pay this. LSL that is taken, does, by law, attract superannuation payments AND counts as time worked toward another complete year of service.

Can I work elsewhere while on long service leave?

No. You cannot work on any day (or part day) where you would ordinarily be at work.

The Act states:

A worker must not, while on long service leave, engage in any other employment in place of the employment in relation to which the right to leave accrued. Maximum penalty: $1 000.

For part time workers you can work on any day that you do not usually work. So if you are, say, a teacher and normally work Monday, Tuesday, Wednesday, then while on LSL you cannot work on these days, but you could work on Thursdays or Fridays (or over the weekend).

A word of caution though – most agreements (or school policy) require notice to the employer of any paid work outside of the school so check this before committing to any other form of pemployment.

Can I take long service leave a couple of days per week and continue working the other days?

Yes, you may be able to negotiate this or some other fraction. If agreed it would allow you to work those other days, but your employer is under no obligation to allow this.

Do I continue to accrue long service leave while on long service leave?

Yes, LSL counts as service and so while you are on LSL if it takes you past your anniversary date (another completed year of service), then you automatically accrue another 1.3 weeks of LSL.

Does leave without pay count towards service for long service leave entitlements?

No, in most circumstances any form of unpaid leave does not count as service and your anniversary date at which a complete year of service arises will be adjusted accordingly.

Have more questions? Contact your Organisers – 8410 0122 or