Long Service Leave Bill2017
Introduction Print
EXPLANATORY MEMORANDUM
581125
BILL LA INTRODUCTION 23/8/2017
Clause Notes
Part 1—Preliminary
Clause 1 outlines the purposes of the Bill, which is to make provision forthe long service leave entitlements of Victorian employees, torepeal the Long Service Leave Act 1992, and to make consequential amendments to other Acts.
Clause 2 provides that the Bill comes into operation on a day to be proclaimed. If the Bill is not proclaimed, the default commencement date is 1 June 2018.
Clause 3 subclause (1) defines various words and expressions used in the Bill, including—
· casual or seasonal employee, which means a person who is employed by the same employer more than once over a period during which a person may be absent from work under certain conditions;
· continuous employment that has the meaning given inclause 12. That clause sets out how various absences from work are to be treated for the purposes ofdetermining the employee's period of continuous service;
· employee, which means a person employed by an employer to work for hire or reward and includes an apprentice and a person learning or being taught an occupation and a casual or seasonal employee;
· employer has its normal meaning and includes certain other persons in specified situations such as when assets are transferred.
Subclause (2) states that for the purposes of defining what is a casual or seasonal employee in subclause (1), a casual or seasonal employee may be employed on a full time or part time basis, by the employer under more than one employment agreement, and by more than one employer during a defined period.
Clause 4 provides that the Bill binds the Crown in the right of Victoria, and the Crown in all its other capacities, so far as the legislative power of the Parliament permits.
Clause 5 sets out those employees to whom the Bill does not apply. Thisincludes an employee who receives long service leave under another Victorian Act, or under an employment agreement, if the Industrial Division of the Magistrates' Court is of the opinion that the alternative arrangement is more favourable to the employee than the Bill provides.
Part 2—Long service leave entitlements
Clause 6 sets out the entitlement to long service leave. On completing 7years' continuous employment with one employer, an employee is entitled to an amount of leave on ordinary pay. Long service leave is accrued at the rate of 1/60th of an employee's period of continuous service. Therefore, to calculate an employee's entitlement to long service leave at any time after the employee has worked for at least 7 years with one employer, the period ofcontinuous service is divided by 60, and any long service leavealready taken by the employee is then deducted. Thisarrangement differs from the 1992 Act in that an employee will be able to take accrued long service leave after 7 years of completed service. Under the current Act a minimum of 10years' service is required before an employee may take leave, although the entitlement crystallises at 7 years.
Clause 7 provides that any public holiday, or period of annual leave occurring during a period of long service leave is not included as part of that period of leave. A public holiday or period of annual leave will therefore be additional to any period of long service leave.
Clause 8 subclause (1) allows an employer and employee to agree to the employee taking long service leave even if the employee has not completed 7 years continuous service.
Subclause (2) provides that if the employee takes long service leave in advance, the employee is not entitled to any further long service leave entitlement in respect of the period for which the leave was taken in advance.
Subclause (3) enables an employer to deduct an amount equal to the amount paid to the employee from the employee's payment if leave is taken in advance and the employment ends before the completion of 7 years' continuous service.
Clause 9 subclause (1) provides that if employment ends before the employee has taken all the leave they are entitled to, the employee is considered to have started long service leave on theday that the employment ended. This does not apply to a situation where the employee has died.
Subclause (2) provides that on the day that the employment endsthe employer must pay the employee the full amount of the employee's long service leave entitlement as of that date.
A penalty of 12 penalty units (in the case of a natural person) or 60 penalty units (in the case of a body corporate) applies to this provision. As this is a "continuing offence" the penalty applies for each day during which the offence continues.
Clause 10 subclause (1) provides that if the employee dies before taking all the long service leave to which they are entitled, the employer must pay the full long service leave entitlement owed to that employee to the employee's personal representative.
Failure to do so is a continuing offence and the penalty applies for each day on which the offence continues.
Subclause (2) provides that in a prosecution for an offence against this clause, the employer bears the onus of proving that the length of the employee's service on the charge sheet is wrong.
Subclause (3) provides that when calculating the entitlement under this clause, the ordinary pay of the employee is the pay the employee was receiving at the time of their death for working their normal weekly hours at their ordinary rate of pay.
Clause 11 describes what is meant by the term one employer.
Subclause (1) provides that the clause describes a number of situations in which an employee is, for the purposes of the Bill, taken to have been employed by one employer. They include where the employer is employed by a related corporate entity, or where a business has been sold and the employee is employed by the new owner of the business. In these situations the new owner is liable for any accrued long service leave entitlement.
Subclause (2) states that if an employee is employed by a corporation, the employee is taken to have been employed by thatcorporation if at any time they were employed by a related body corporate, or by another corporation if the directors of thatcorporation and the employee's present employer are substantially the same, or the other corporation and the employee's present employer were under substantially the samemanagement.
Subclause (3) provides that employment of an employee employed at a business that changes hands continues, and the employee is considered to have started employment with the newowner on the date on which the employee first commenced employment with that business. The new owner must not refuse to provide long service leave to the employee, including any long service leave that accrued prior to the change of ownership.
Subclause (4) provides that subclause (3) applies to a change of ownership before or after the commencement of the Bill.
Subclause (5) provides that if an employee is dismissed by the owner of a business, but is then reemployed by the new owner within 12 weeks to perform the same, or similar work, the employee is taken to have finished employment with the former employer on the day before the ownership of the business changed, and to have started employment with the new employer on the day ownership was transferred, and to have been employed by the new employer from the day on which the employee first commenced employment in that business.
Subclause (6) provides that if an employee performs duties in connection with any assets used in carrying out the employer's business, and those assets are transferred to another employer who continues the employment of the employee, the employee is considered to have started employment with the new owner on the day on which the employee started employment in that business. Further, the new owner must not refuse to provide the employee their long service leave entitlement, including any entitlement that accrued before the transfer of the assets occurred. The term assets includes both a tangible and intangible asset. Under the 1992 Act assets only includes land, plant and equipment.
Subclause (7) provides that subclause (8) applies if an employee performs duties in connection with any assets used by the business, and the employee is dismissed by that employer, and those assets are transferred to another employer, and within 12weeks after the employee is dismissed, the other employer employs the employee to perform work in relation to those, or similar, assets.
Subclause (8) provides that an employee referred to in subclause (7) is considered to have finished employment with their former employer on the day before the assets were transferred, and to have started employment with the new employer on the day the assets were transferred, and to have been employed by the new employer on the day on which the employee first commenced employment in that business.
Subclause (9) describes a situation where the employee's employer enters into a contract with another employer provide work that is the same or much the same, and as a consequence, the employee ceases employment with their employer and commences employment with that second employer. This could be described as an "outsourcing" arrangement. In this situation the employee is taken to have started employment with the second employer on the day on which the employee commenced employment with the first employer. This situation would also apply where the second employer ceases to provide work, and the work, and the employee, returns to the first employer. In such a situation subclause (10) will apply.
Subclause (10) states that an employee referred to in subclause (9) is taken to have started employment with the second employer on the day on which they started work with the first employer.
Subclause (11) states that the second employer must not refuse toprovide any long service leave the employee accrued whilst working for the first employer.
Subclause (12) includes a number of definitions, for the purposes of this clause.
Clause 12 subclause (1) describes what is meant by the term continuous employment.
Subclause (2) states that an employee's employment is taken tobe continuous despite an absence from work caused by the employee taking various specified types of leave. In the case of a casual or seasonal employee, employment will also be continuous if the absence is caused by that employee taking paid or unpaid parental leave of up to 104 weeks. This provision clarifies the rights of casual and seasonal employees to take unpaid parental leave in accordance with the Commonwealth Fair Work Act2009, without affecting the employee's continuity of employment.
Subclause (3) states that a casual or seasonal employee's employment is also taken to be continuous despite the absence from work being greater than 12 weeks if certain other criteria are met.
Subclause (4) states that an employee's employment is taken to be continuous if the absence from work is caused by the employer terminating or interrupting the employment with the intent of avoiding a long service leave obligation.
Subclause (5) provides that an employee's employment is taken to be continuous if the absence arises solely from the transfer of assets from one employer to another and the employee usually performs work in relation to those assets.
Subclause (6) states that an employee's employment is taken to be continuous if the absence is caused by—
· the termination of employment, at the initiative of either the employer or the employee, and the employee is reemployed by the employer within 3 months of the termination. Under the 1992 Act, this provision only applied to situations where the termination of employment was at the initiative of the employer; or
· a contract term expiring, if the employee is reemployed by the employer within 3 months of the expiration; or
· the employee's apprenticeship ending, if the employee isreemployed by the employer within 12 months of the completion of the apprenticeship.
Subclause (7) provides that an employee's employment is taken to be continuous despite the standing down of the employee because of industrial action (defined in subclause (10)), in certain circumstances. This is similar to arrangements in section524 of the Commonwealth Fair Work Act 2009 which sets out situations where an employer may stand down an employee without pay during a period in which the employee cannot usefully be employed.
Subclause (8) provides that an employee's employment is taken to be continuous despite the standing down of the employee because of a breakdown in machinery or equipment for which theemployer cannot be reasonably held accountable, in certain circumstances.
Subclause (9) provides that an employee's employment is taken to be continuous despite the standing down of the employee because of a stoppage of work for any reason, for which the employer cannot be reasonably held accountable in certain circumstances.
Subclause (10) defines industrial action for the purposes of this clause.
Subclause (11) excludes certain actions from the definition.
Clause 13 subclause (1) describes those periods of absence that are included when calculating an employee's period of continuous service. The Bill provides that a period of unpaid parental leave up to 52weeks (or longer if agreed by the parties) will be included when calculating an employee's period of continuous service. This is a change from the 1992 Act, which does not include a period of unpaid parental leave when calculating the period of continuous service.