Exploring the History of Long Service Leave in Australia

My recent research into paid leave entitlements around the world has led me to ponder about why Australia is the only country across the globe that offers Long Service Leave (LSL).

So, let’s embark on a voyage through the choppy waters of Australian labour history, to dust off the national treasure known as Long Service Leave (LSL). As I have learned that it’s not just a break from work; it’s a time-honoured tradition that has shaped the very fabric of employment down under.

Picture this: the year is 1860, and the Australian workforce is bustling with activity. And this is when Long Service Leave emerges from the depths of policy-making, offering a glimmer of respite to hardworking souls who were expected to toil away for years on end. Originally conceived to allow workers to sail back to their homeland once a decade, LSL was like a golden ticket for those who showed unwavering loyalty to their employers. Fun fact, initially this benefit was only available for public servants, but then became entrenched in Australian legislation years later. Honestly, this backstory literally blew my mind, because although I have worked in HR for over 20 years. I had no idea that Long Service Leave started way back in the 1800’s. And that the real reason was to allow workers time to sail back to their homelands whether they were in England or Europe.

So, what is Long Service Leave and how does it work?

An employee gets long service leave after a long period of working for the same employer.

Most employees’ entitlement to long service leave comes from long service leave laws in each state or territory. These laws set out:

  • how long an employee has to be working to get long service leave (for example, after 7 years)
  • how much long service leave the employee gets.

In some states and territories, long long-serving casuals are also eligible for long service leave.

To find out about long-service leave entitlements, you need to consult with the long-service leave agency in your state or territory.

Below is a table outlining basic entitlements across the different states and territories.

 Long service leave in pre-modern awards

The state and territory long service leave laws don’t apply when there are long service leave entitlements in a federal pre-modern award that would have covered an employer and their employees before 1 January 2010. (Just to make things even more confusing)

In this case the long service leave entitlement comes from the pre-modern award which will set out:

  • how long an employee has to be working to get long service leave (for example, after 7 years)
  • how much long service leave the employee gets.

The fact that this form of paid leave is different across all the states and territories in Australia is extremely confusing for employers and HR folk alike. It really is another symbol of our antiquated and complicated Federal and State based labour laws dating back to the 1800’s. There has been some discussion around a Federal LSL Act but we have never gotten there, despite much talk.

So let’s go back and look at the evolution of this entitlement and what has changed.

Let’s fast forward to the 1940s, as LSL spreads its wings beyond the public sector, making a grand entrance into the private sector. Thanks to a little thing called conciliation and arbitration, workers in private industries could now cash in on their years of service with some well-deserved time off. And thus, the legend of LSL continued to expand.

Now, here’s where things get interesting. Enter portability – this concept allows LSL to be transferable even when you change jobs, as long as you are still working in the same industry. In industries like construction, where workers hop from project to project like kangaroos in the outback, portability ensures that nobody misses out on their slice of the LSL pie. It is that cherry on top, that you can carry with you wherever you go. But portability has never extended to the heights that some unions would like. At present some Australian states and territories have legislation to provide employees in the security, community services, building and construction, coal mining, and contract cleaning industries with access to portable long service leave.

And there have been discussions around expanding portability further and the McKell Institute proposed – a national portable long-service scheme for EVERYONE. Imagine a world where every worker, from every single employer in every industry, could bask in the glory of portable long service leave. It would be a game-changer, a beacon of hope for tired souls longing for a well-deserved break. Equally, this would likely be an actual nightmare for employers (especially when you consider the massive amounts of paid leave that we get here in Australia in the first place.)

I am a massive advocate of LSL, and I clearly remember when my dad earned his long service leave when he was working at the Gas and Fuel way back in the early 1990’s. We took 3 months off school and work and travelled the whole way around Australia as a family. It is a memory I will never forget, and looking back I have started to appreciate what a privilege that was! A once in a lifetime trip that would not have been possible without the financial backdrop of LSL.

As I write this post, I have been doing quite a lot of pondering about whether LSL remains relevant in the world we live in today. For many employees, the thought of staying with one employer for 7 to 10 years is honestly mind-blowing. But I guess the whole purpose is to promote longevity and loyalty with one employer and reward that employee with a chance to recharge their batteries, and take that trip that they have been dreaming about their whole lives. In a world where work-life balance is more elusive than a drop bear in the bush, LSL still offers a ray of sunshine for tired workers everywhere.

So, as we sail into the sunset of this blog post, let’s raise a toast to good ole’ Long Service Leave – a cherished tradition that reminds us that sometimes, taking a break is the ultimate reward.

I think it’s also pertinent to remember that this is, yet another entitlement funded by businesses in Australia with no government support or input that is legislatively enforceable.

In fact, this must be accrued from day one of employment and stored as a liability on the balance sheet so as you can imagine it’s a huge expense for all businesses, whether big or small.

So if you need assistance navigating LSL in your business then reach out!

Written By Emily Jaksch

Founder and Head Guru

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