Can casual employees receive long service leave?

Casual employment is often associated with flexibility and short-term arrangements. But one often overlooked benefit is LSL. In Victoria, casual employees can qualify for LSL under the Long Service Leave Act 2018 (VIC) even if they work irregular hours or take breaks between shifts – provided the employment relationship continues over time.

For a recap on understanding portable long service leave in Victoria, visit part one of our series. Part three explores continuous employment.

This article explains when and how casual employees accrue LSL, how continuity is determined, and what employers must do to remain compliant.

Casual employees and the Long Service Leave Act

The Long Service Leave Act 2018 (VIC) applies to all employees – full-time, part-time, seasonal and casual – who complete at least seven years of continuous employment with the same employer.

There is no requirement that casuals work regular or systematic hours. What matters is that the employment relationship continues, even if shifts are intermittent or infrequent.

What counts as continuous employment for casuals?

For a casual employee, the key factor is whether the employment relationship has been maintained over time. Under the Act, employment is generally considered continuous unless:

• The employment relationship is terminated (e.g. resignation or dismissal), and there is no re-employment within 12 weeks; or
• There is a break of more than 12 weeks between engagements without a mutual expectation of ongoing employment.

Breaks that do not stop continuity include:

• Seasonal or customary breaks (e.g. school holidays, snow season)
• Periods of unpaid parental leave (up to 104 weeks)
• Gaps between shifts where the employment relationship is ongoing
• Absences due to illness, injury or unpaid leave by agreement
• Re-employment within 12 weeks of termination (resignation or dismissal), unless it is proven that the employment was not intended to be continuous.

Examples of this include:

• A casual educator who works every school term for eight years – with gaps during school holidays – is likely to be considered continuously employed under the Act
• A snow resort worker who returns each winter season over several years may also qualify, as the extended breaks are considered customary and seasonal, not a break in service
• A casual worker who resigns and is re-employed within 12 weeks will generally retain LSL continuity. The Act presumes continuity in these circumstances – it is difficult for an employer to prove otherwise unless there is clear evidence that the original employment was intended to end permanently and not resume.

How LSL is calculated for casual employees

Casual employees accrue LSL at the same rate as others: approximately 1/60th of the time worked. Upon reaching seven years of continuous employment, they become entitled to take the leave.

When it comes to LSL payment, the Act requires employers to calculate the employee’s average weekly hours using three methods, and apply the highest result:

• The average weekly hours over the last 52 weeks (one year)
• The average weekly hours over the last 260 weeks (five years)
• The average weekly hours over the entire period of continuous employment.

This average is multiplied by the employee’s current ordinary rate of pay, which must include any applicable casual loading.

This three-method approach ensures fairness for employees whose hours fluctuate over time.

Employer responsibilities

To comply with the Act, employers must:

• Maintain accurate records of all shifts worked, hours, and pay rates – including casual loading
• Track employee service, even if shifts are irregular or infrequent
• Apply the most beneficial of the three LSL calculation methods when employees take leave
• Avoid an assumption that casual status or work gaps disqualify employees from LSL
• Review industrial instruments (e.g. awards or enterprise agreements) to ensure consistency with any benefits which exceed the Act’s minimum entitlements.

How the Victorian Chamber can help

In Victoria, casual employees can, and often do, qualify for long service leave. If the employment relationship is continuous and the employee has at least seven years of service, LSL must be provided. Importantly, payment must be based on the most generous averaging method available.

Accurate records, fair application of the law, and a proactive approach to compliance are essential, especially for employers with long-serving casuals.

Victorian Chamber members can contact the Workplace Relations Advice Line on 03 8662 5222 for guidance and support on managing long service leave and broader employment compliance.

The Victorian Chamber also has a collection of more than 100 expertly designed tools and templates, including leave policies, to help inform and keep businesses compliant with obligations.