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Long service leave changes will cost employers

Submitted on Thursday, 31st August 2017

The Long Service Leave Bill 2017, currently before the Victorian Parliament, will disadvantage employers and create a significant administrative burden for businesses.

Following a review of current long service leave arrangements, the Victorian Government is proposing a number of changes to long service leave laws in Victoria.

Key changes that will disadvantage employers are:

  • Retrospectively allowing long service leave payments to be based on hours of work averaged over the period of continuous employment. This will create a significant administrative burden to calculate entitlements for workers with variable hours and a long period of employment.
  • Changes to the treatment of parental leave that will increase the cost to business.
  • Significantly increasing penalties for non-compliance and changing some penalties from civil to criminal penalties.

The Victorian Chamber is calling for Parliament to amend parts of this Bill because the changes will result in increased costs and additional obligations for employers.

If the legislation is passed, employers will face extra costs, increased penalties and be required to adhere to a new record keeping obligation with extra complexity when calculating entitlements.

Long service leave was invented in the mid-19th century to allow citizens to sail to and from England every decade, a journey that could take up to four months. This is clearly not a problem for today’s workers.

While it is reasonable to seek to bring long service leave legislation up to date and make it easier to administer, efforts to ‘modernise’ long service leave should not be used as an excuse to increase benefits to employees, without considering that employers will bear the cost.

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