Long service leave entitlement on resignation
Just after some advice.
We are a small family business.
Recently one of our employees resigned giving 2 weeks notice. No problem. He believes that he is entitled to long service leave pro rata after being with us just under 7 years. He resigned to set up one our customers as our opposition. We don't have a problem with this.
He first tried to claim it was "pressing necessity" as stated in the act. He claimed he was unable to afford to buy a house on what we were paying him. He is a single man that lives with his mum and dad.
He gave up on that. We decided to ask him to leave in his notice period and we paid out his notice. (he gave us 2 weeks and he 3 days to go).
Two weeks after he left I received a letter from him that because we "terminated" him is his notice period he was entitled to the long service leave.
I have spoken to IR in NSW and they have said no entitlement. I have handed the matter to an employment lawyer and he said that there is no entitlement either and has sent him a letter asking him the reasons he thinks he's entitled.
Have any of you had this example come up? Do you think he is entitled?
Yes, I've had experience similar to this (albeit with a larger corporation). It's not uncommon in NSW for employees to claim pressing necessity, outright lies are also not uncommon and you should ask for proof to support their claims (within reason) if not entirely convinced.
I'd say you have done the right thing so far. End of the day it will be up to the employee to take action to receive the payments which in most states involves going to the magistrates court. He'll probably get scared off now there is a lawyer involved as he was probably just trying it on as a bluff.
I'd also be condifent there is no entitlement from what you have said. Electing to pay out the notice period does not constitute a termination of employment, and a employee instigated resignation will rule out pro-rata payment in 95% of cases in NSW.
thanks for you reply.
I will let you know happens.
He should receive the letter from the solicitor today.
OK so here is a quick update.
Ex employee advised our solicitor today he has gone to the Ombudsman as he didnt hear from us within the 7 days of him sending the letter.
He dated the letter on 23/2, he sent it via registered post on 28/2, I received it on 16/3 (registered post, I have the track and trace receipt).
So l my solicitor said to sit and wait.
Any advice on what happens with the fair work ombudsman?
Quite interesting how different the NSW LSL entitlements are from the WA one.
The WA LSL
Pro rata leave on termination
An employee who has completed 7 or more years of continuous employment is entitled to a prorata long service leave payment on termination, unless their employment is terminated for serious misconduct. The prorata long service leave payment must be paid for all qualifying employment (not just completed years).
So did this guy claimed he was resigning due to a "pressing necessity" because he couldn't afford to buy a house ?
I hope you told him that it is not an employers responsibility to keep wages pegged to house prices
As for his "employment period" - I would have thought it terminated at the end of his notice period, regardless of the fact that he was paid out (sometimes referred to as "gardening leave").
It's not uncommon for senior managers in some industries to have long notice periods in their contract, precisely so that the employer can pay them out and have them stay at home, but they cannot go and work from someone else (usually a competitor) until the end of the notice period. I'm fairly sure this has been tested in court and the individual was told that he could not in fact go and work for someone else until the notice period ended (because he had been paid for it).
Yes I noticed the LSL in WA and in the other states was 7 years, which he falls short by 1 week.
He claimed he was leaving to go work in the mines. However he told everyone else (other employees) that he was going to work at one of our major customers to set them in opposition to us. (which we don't have a problem with) we have a problem with the lying! This guy is a pathological lier. I'm so glad he is gooonnneeee.
Now, I await the fair work inspector.
OK so we heard from the ombudsman today.
He made sure we were paying him the correct amount. Which we were. and then went on to say that he is referring it to the NSW IR as the LSL act does not fall under his jurastiction. So we had a chat to him and he asked a few questions, stating if anything had changed and had tried to negotiate pay rates with him and we said he blind sided us with a resignation and did not give us that opportunity. He is Actually claiming "Domestic Necessity".
As I may have stated previously. He is single, loves at home, and chose to go to a job that is further away from his home (not much further). He actually signed the contract with them the day he resigned (we know this via another employee).
Surely he has no case? We will wait and see.
I heard from the fairwork inspector today. Looks like he has no claim to LSL. Now we are being investigated for underpayment of wages. The payrate was correct but there was an industry allowance we should have been paying for everyone. Anyhow, he goes on to say "why do you think you are under this award?" and I explaimed the IRNSW told us that we came under that award and he said "well I dont think you are". So I ask around to business chamber and other people in our industry and bingo...wrong award.
So there is probably no under payment but now I will have to go back six years to make sure, but I have been paying too much overtime....time and a half does not kick in till 3 hours under the diff award previously I thought it was 2. Meal allowance is different too. I love small business.
pays to have 'quality' IR consultants
Thanks for the updates. I keep tuning back in to follow the progress.
I guess 13 years ago when we emplyed out first person we asked NSW IR what award and they told us and we never questioned it. it looks like this was the correct award till 2010 when the award modernisation thing happened. Anyway I spoke to 6 more other businesses like us and they all said we are under the wrong award. Fair work guy reckons there is still coverage for us under our original award but it seems that the award my colleagues are under is a better fit for us. So I did the research and provided all the info to the inspector. He said he has to consult his supervisor etc. Guess we will wait and see.
This was the case at my workplace when I started the new job mid last year.
We were paying some of our apprentices below the minimum wage rates according to the modern award following recent changes that nobody had previously picked up on.
I guess we were lucky that I was new and came into the business with a fresh pair of eyes giving everything the once over... or else complaicancy can cause a bit of greif for the business.
I heard from FWO today. He told me what the underpayment will be for our exemployee. Thing is, the award he is using is definitely not our award. The award that does apply means that we are have been spot on with everything and have been paying more overtime than we needed to. Anyway I have forwarded the email to a solicitor now and get their opinion.
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