• 16 Sep 2019

Make sure you are paid your correct Long Service Entitlement when you leave your employment (NSW)

The rules surrounding the entitlement to be paid out long service leave are complex.  They relate in part to what award and/or state and territory legislation you were employed under combined with the circumstances under which you are leaving your employment.

General Entitlements in NSW

Most employees in NSW are covered by the Long Service Leave Act 1955 (NSW) which provides in section 4 for the payment of long service leave in the following circumstances:

1. If you have been continuously employed for 10 years or more then you have an entitlement to be paid for any accrued but unpaid long service leave when your employment ceases for any reason.
2. If your employment is terminated by your employer after 5 years of service and before 10 years of service for any reason apart from serious or wilful misconduct, then you are entitled to be paid pro-rata for any accrued but unpaid long service leave.
3. If you resign from your employment between 5 and 10 years of continuous service, then you are entitled to be paid pro-rata for any accrued and unpaid long service leave but only if you resign due to illness, incapacity, domestic or other pressing necessity, which must have been advised to your employer at the time you resigned.

What is continuous service?

Continuous service means service "whether on a permanent, casual, part-time or any other basis, under one or more contracts of employment" (s11(a)), so if you have been a casual employee who transferred at some point to a more permanent basis, the whole period of your service may count towards your accrual of long service leave.  Even if your period of employment has been broken but you went back to work for the same employer, there are exceptions provided in the legislation which may mean that your employment is still deemed to be continuous (s11(a1)).  It is worth checking this out.

What happens if you have moved around within a Group of companies?

There is a little-known subsection of the Long Service Leave Act 1955 (NSW), s4(13)(d), which provides that where you have been continuously employed within a corporate group, albeit that your direct employer may have changed during that time, your long service leaves accrues for the whole period of your employment within the Group. This applies to subsidiaries and subsidiaries of subsidiaries.

There are some rules surrounding this, so if you have been employed by a multi-national company, or even with differing companies within in a Group throughout Australia (there must be a substantial connection with NSW for the provision to apply), you should seek legal advice as to whether this provision applies to you. 

If your employment has been terminated for any reason, it is worth seeking legal advice to ensure that you have been paid your full entitlements before signing any release requested by your employer. 

If you would like advice on any aspect of a termination of employment, please contact Fiona Henderson at fiona@acornlawyers.com.au or on (02) 4226 5711.

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