5 June 2015
Mr Teo Findlay
Policy Officer
Workplace Safety and Industrial Relations
Chief Minister, Treasury and Economic Development Directorate
ACT Government
Sent by email:
Dear Mr Findlay,
LASA NSW-ACT and ACS NSW & ACT represent the overwhelming majority of residential and community aged care providers in the ACT and provide the following comments on behalf of our members.
We are disappointed with the lack of consultation with age care employers. The substantial and costly outcomes that will be incurred by our members by the implementation of the legislation requires further review and discussion.
We oppose the inclusion of the aged care industry in the Long Service Leave (Portable Scheme) Act 2009 – Schedule 3 Long service leave payments – community sector industry (the Portable Scheme).
On our review and comparison of the Portable Scheme and the Long Service Leave (ACT) Act 1976 (the Act) we are unable to identify where and how the Portable Scheme creates better outcomes for age care providers. In fact, the Portable Scheme creates increased costs and administrative burden.
Age care providers operate in a highly regulated industry with significant financial constraints and legislative obligations. Unlike other industries covered by the Scheme, age care providers are unable to pass on increased costs to clients and residents.
We believe the Portable Scheme acts against the intent and purpose of long service leave which is to provide an incentive to employees to remain with their employer, and reward loyalty to those employees that stay with paid leave.
In respect of the Portable Scheme we highlight the following issues and concerns:
Increased Costs
The Portable Scheme requires employers to pay long service to employees who would otherwise not be entitled to long service leave at all.
For example, currently, employers only have an obligation to pay long service to an employee who has completed 7 years service with one employer. Where an employee resigns after less than 7 years service, no long service leave payment is required to be made. The Portable Scheme requires an employer to submit funds (a levy) from the commencement of employment of an employee.
The Portable Scheme removes access to funds and the interest on those funds that would otherwise be available to an employer under the current legislation.
An employer is required to pay a levy for registered employees’ from the commencement of their employment (or introduction of the Portable Scheme). Currently employers are not required to set these funds aside until the employee has the entitlement to take long service leave. The Portable Scheme therefore takes funds and investment savings out of the pockets of age care employers.
These changes represent new and substantial costs for age care employers.
Portable Scheme vs. LSL Act
The Portable Scheme provides access to long service leave after 5 years service, where it is currently 7 years under the Act.
The Portable Scheme provides for pro rata payment on termination, even if terminated for serious and wilful misconduct. The Portable Scheme does not include this exclusion.
The Portable Scheme defines the retirement age as 55 years of age, as opposed to the current legislation defining the retirement age as 65.
The Portable Scheme includes a requirement for an employee to take accrued long service leave 6 months after the date the leave has accrued, unless the governing board allows for leave to be varied. The Portable Scheme does not allow for an employee and employer to agree to postponing taking leave or for the needs of the business to be taken into account when determining when leave will be taken, which is currently provided for under the Act.
Retention
The Portable Scheme removes the requirement to remain with one employer in order to access long service leave.
In addition to the above, the Portable Scheme, by including age care in the broad ranging Community Care Schedule, removes the requirement for an employee to remain in the age care industry.
The Portable Scheme promotes movement of employees outside of the aged care industry and across a range of disparate community service activities.
We bring your attention to the NILs Aged Care Workforce Report 2012[1] outlining retention is an ongoing issue for age care providers.
Replacement Costs
The Portable Scheme creates the possibility of increased staff replacement costs to cover staff taking long service leave earlier.
Under the Portable Scheme, for example, an employee, employed for a number of years under the Community Sector Scheme and with an entitlement to take long service leave may commence employment with an aged care employer with an immediate right to request long service leave.
Increased Administration
The Portable Scheme creates new administration obligations.
The Portable Scheme requires an employer to:
⁃register
⁃register each employee covered by the scheme
⁃contribute levy payments for each registered employee
⁃submit quarterly returns as required by the authority
⁃maintain records and
⁃notify the authority of changes.
Non compliance with these administrative obligations results in penalties.
In light of the above, we request an opportunity to be engaged in any and all future discussions regarding the introduction of the Portable Scheme for the aged care industry.
We welcome opportunity to speak directly about our concerns.
Yours faithfully,
Illana Halliday Charles Wurf
Chief Executive Officer Chief Executive Officer
Aged & Community Services NSW & ACT Leading Age Services Australia NSW ACT
[1]"
This reinforces the findings from previous years that the issue for employers is not simply recruiting workers into aged care, but keeping them within a particular facility – page 31.