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  1. #1

    Default Long service leave and change of position

    the company has a full time employee who has been with the company 9 years. he recently returned to the office after 18 months off due to illness but found he wasn't coping with his old position so he resigned.
    In the mean time the director offered him another position casual as he didn't want lose a good employee and his medical certificate says he can't work more than 2 days a week which he started the next week.
    We are paying out all his entitlements annual leave, long service leave. etc as per his resignation.
    One of the director has said that he isn't allowed to return as a casual until he has had 3 months off as per his long service entitlements, he was advised by a HR expert.

    Anyone have experience or come across this situation?

    i thought if an employee resigned to start a new job after 7 years we would pro rata their long service leave surely it would be similar situation.

    any help appreciated.

    thanks

  2. #2
    Join Date
    Feb 2012
    Location
    Queensland
    Posts
    52

    Default

    Hi,

    Firstly, yes if an employee leaves the business for longer the 3 months and returns, the LSL entitlement resets.
    In other words, if they come back after 2 months you would commence the LSL entitlements from where they left off (providing you didn't pay them out).

    Sorry, but I have a few questions/points to better understand the scenario you are describing:
    * While the employee was away for 18 months was the employee just on approved leave without pay & still "on the books" - as this is a very long length of time and is a bit unorthodox?
    * If on approved LWOP, then the entitlements should not have accrued during the 18 months, in my opinion
    * You state that "We are paying out all his entitlements annual leave, long service leave. etc as per his resignation." If you are actually paying the LSL then it would start from zero again when the employee returns.
    * Could you clarify what state this employee works? As LSL laws are state specific.
    Last edited by bullswool; 08-08-2017 at 12:12 PM. Reason: typo - remove statement in brackets, first sentence

  3. #3

    Default

    Yes I know 18 months illness is a long time to hold his position but the directors decided to keep the position for his return.

    no he didn't accumulate long service leave entitlements while he was on unpaid leave.

    he actually resigned due to health reasons as he couldn't manage a full week at the same job so we paid out his entitlements but he was offered a different position in the firm as a casual for 2 days or less.
    One director has said that he can't work in the new position until he has taken the long service leave we paid out on resignation. approx 6 weeks

    I am not sure why he has to take the leave before starting a new casual position?

  4. #4
    Join Date
    Feb 2012
    Location
    Queensland
    Posts
    52

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    Hi, it sounds like strange advise from HR expert to your directors.

    I guess it stings the company & directors a bit, in that you have just paid over 6 weeks LSL in a lump sum and then the employee is back working the next day, but ce la vie. And I guess that's the prerogative of your directors, but honestly I can't think of any HR/payroll reason or requirement to do this (admitted i could be wrong ).

    If this was me in your situation: As you have paid out the LSL & AL entitlements, the employee could come back to work the very next day, although the LSL & AL entitlements would obviously reset to zero because you have just paid them out. Different story if you hadn't paid them out...

    You didn't mention what state you employed in, but if you google "LSL <your state>" (eg: LSL NSW) usually the top result is the link to the State government department that deals with LSL. And you should easily find a phone number.
    I have rung QLD, VIC and NSW over the years with all types of questions and have always found them helpful. That might also be a source of info.

  5. #5
    Join Date
    Aug 2007
    Location
    Melbourne, Australia
    Posts
    447

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    Fabsteel, you didn't say what State he is in - LSL rules vary between States.

    In some States "cashing out" LSL is only allowed in certain circumstances and may require Industrial Relations Commission approval.

    Your director may be concerned that if he leaves the company, gets paid out, then starts again in a casual job the following week, it could be viewed as "cashing out" LSL in circumstances where it is not allowed.

    Was he covered by an award or enterprise agreement that said anything about LSL?

  6. #6
    Join Date
    Jul 2007
    Location
    Canberra
    Posts
    51

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    I can see potentially 3 different scenarios here...

    Scenario 1 - the applicable Long Service Leave scheme covers casual employees as well as full time employees.
    If the worker will stay in the same LSL scheme under his new contract, then he could be regarded as moving from one form of eligible employment to another form of eligible employment. There may be a few days gap that won't count as service before he recommences as a casual employee, but that won't be sufficient to break his overall continuity of service for the purposes of the Long Service Leave scheme. In these circumstances, there's no event that "triggers" a payout of leave entitlements, so his leave accrued during his earlier FT service will stay "in the scheme" and be available to be taken as a later period of leave.

    Scenario 2 - his resignation from full time employment is a significant change in employment circumstances and triggers a payment in lieu of accrued entitlements.
    It doesn't sound as though anyone is arguing that the resignation from FT employment is "contrived". It was founded on a medical necessity, or a firm intention of the employee, and it seems that the later offer of casual employment was incidental. In these circumstances a payment for accrued entitlements would be legitimate and the normal outcome. Whether an employee would be entitled to LSL payout after 9 years (or 7 years effective service) would depend upon the circumstances and the particular LSL scheme.

    Scenario 3 (combination) - If the accrued LSL entitlements are in fact paid out but the employee is still covered by the LSL scheme as a casual employee.
    No major problem - the employee's running balances of LSL entitlements are adjusted and he continues to accrue new entitlements based on his further (casual) service. He'll have a zero LSL balance but he won't need to work the initial accrual period again.

    Please check the actual Long Service Leave scheme to see which scenario applies.

    However, I'm not aware of any reason for the employee to have to "sit out" for a period rather than being immediately re-employed.

    Greg

  7. #7
    Join Date
    Apr 2012
    Posts
    185

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    Excellent advice but respondents are basically in the dark. WHAT STATE OR TERRITORY IN AUSTRALIA does the employee work??
    LSL in Australia is governed by individual state/territory legislation, it is not uniform across the country.
    Tiger

  8. #8
    Join Date
    Feb 2012
    Location
    Queensland
    Posts
    52

    Default

    Good Advise Greg, I think option 3 would apply here....

  9. #9

    Default

    Sorry everyone had a family emergency so been away for a few days.

    We are situated in Western Australia.

    Thank you all for your input it is greatly appreciated.

  10. #10
    Join Date
    Apr 2012
    Posts
    185

    Default

    Thanks for that. In WA, an employee resigning who has at least 7 yrs of continuous service is paid out pro rata LSL. For an employee who is rehired within two months of termination date, then employment is considered not to have been broken. But if the period is longer than two months, then the clock is reset to zero when the EE is rehired. If I recall correctly, your employee had no time between resignation and rehire as a casual thus, employment is deemed to be continuous so the original date of hire will remain - this means that the employee will next be entitled to LSL after another five years service etc.
    LSL for casuals is calculated on the basis of averaging because casuals have irregular hours. In WA averaging is calculated either over the period of employment or the weekly rate averaged over the previous three months. FYI, the Employment Law Centre in WA is the body who 'owns' LSL in WA.
    Tiger

  11. #11
    Join Date
    Aug 2007
    Location
    Melbourne, Australia
    Posts
    447

    Default

    However, in WA (unlike most other states) an employee can cash out their LSL, in agreement (in writing) with the employer. Therefore there doesn't seem to be any real impediment to this person continuing straight away as a casual.

    " an employer and employee may agree to cash out an employee’s long service leave once the employee has completed the necessary service and the leave has accrued. This agreement must be in writing and the employee must be given an adequate benefit for the leave they have cashed out."


    https://www.commerce.wa.gov.au/sites..._july_2017.pdf

  12. #12

    Default

    Yes that is what I thought , but speaking to the director he states that because we are the same employer, he can't work for us for the period of the payout. I have asked for it all in writing from his HR source so I can read through it.

    thank you all for the insight really appreciate it.

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