In New South Wales, Australia, portable long service leave is revolutionising the way contract workers experience job security. This innovative scheme offers benefits and entitlements for workers who often move between employers, ensuring fairness and recognition in an ever-changing labor market. In this Business Kitz blog, we explore the significance and advantages of portable long service leave, shedding light on how it guarantees much-needed security and stability for contract workers while setting a precedent for other regions grappling with similar workforce challenges.
Long Service Leave vs Portable Long Service Leave
Long Service Leave and Portable Long Service Leave are both leave entitlements designed to compensate employees for their loyal service.
While they share a similar purpose, they do have distinct characteristics and operate differently. Consequently, if you are eligible to claim one type of service leave, you won’t be able to claim the other.
Discover the key differences between these two leave types below.
Long Service Leave
The traditional long service leave in NSW is an employment entitlement that provides workers with an extended period of leave after a certain period of service. It is typically granted to employees who have worked continuously for the same employer for a specified number of years. The minimum period of continuous service required to become eligible is usually 10 years, but this can vary based on specific employment agreements and industry awards.
Employees accrue long service leave based on the number of years of continuous service with the same employer. The standard accrual rate is 1 week of leave for every 10 years of service.
The long service leave is tied to a specific employer, which means that if a worker changes jobs, they lose their entitlement to their long service leave. This can be a significant disadvantage for workers who change jobs frequently or work in industries with high turnover rates.
Portable Long Service Leave
Portable long service leave, on the other hand, is designed for specific industries, such as construction and community services, where employees may frequently change employers. It aims to provide long service entitlements that are not tied to a single employer but are portable across employers within the eligible industry.
Instead of accruing leave based on years of service with a specific employer, employees accrue portable long service leave based on the number of years worked within the eligible industry.
Portable long service leave is designed to provide workers with greater job security and recognition for their service within an industry.
The Purpose of Portable Long Service Leave
The general entitlement to long service leave is outlined in the National Employment Standards (NES). According to the NES, all employees should be eligible for long service leave. However, in practice, this entitlement is not always accessible to everyone.
Certain industries, such as building and construction, as well as cleaning services, commonly experience employees changing employers frequently, making it rare for individuals to accumulate the required ten years of service with a single employer.
As a result, many workers in these industries rarely get the opportunity to claim their long service leave entitlements, even though it’s not their fault; it is merely a consequence of the nature of their respective industries.
Who is Eligible for Portable Long Service Leave?
As per the Long Service Act 1955, the following categories of industries are typically eligible to claim portable long service leave in NSW:
- Construction and Building Industry and,
- Cleaning Service Industry.
However, it is important to note that the leave entitlements are exclusively available to contract workers within the cleaning services industry.
If you are a contract cleaning business owner, an employee of a contract cleaning business, or a sole trader providing cleaning services domestically or commercially, you might be eligible to receive this entitlement. However, if you work as a cleaner within a larger non-contractor business, like a factory, you will not be eligible to claim this entitlement.
Unlike workers in the cleaning industry, construction and building workers do not need to be contractors to be eligible for portable long service leave. Whether you are a regular employee, working director, apprentice, or contractor performing eligible building and construction work, you can claim this entitlement.
Therefore, regardless of your position, if you work in the construction and building industry, you are likely to receive the benefit of this entitlement.
Does the State I Live in Affect Entitlements?
Entitlements for portable long service leave vary depending on the state or territory. Each state or territory has its own portable long service leave scheme, with different rules and entitlements. They are as follows:
- Australian Capital Territory (ACT): Long Service Act 1976.
- Northern Territory: Long Service Leave Act 1981.
- New South Wales (NSW): Long Service Leave Act 1955.
- Queensland: Industrial Relations Act 2016.
- South Australia (SA): Long Service Leave Act 1987.
- Tasmania: Long Service Leave Act 1976.
- Victoria: Long Service Leave Act 2018.
- Western Australia (WA): Long Service Leave Act 1958.
Portable long service leave is an important scheme for workers in industries that experience high levels of workforce mobility and contract work. It provides a safety net for workers who may not have the same job security as those in more stable industries, and allows them to accrue long service leave based on their length of service within the industry as a whole.
The scheme also promotes job mobility and career progression within industries, encouraging workers to take on new challenges and seek out new opportunities. If you work in an industry covered by the portable long service leave scheme, it is important to understand your entitlements and how the scheme works. Be sure to check the relevant state government websites and speak to your employer or union for more information.
If you have any questions regarding the legalities surrounding portable long service leave, please do not hesitate to contact our sister company, Legal Kitz. The Legal Kitz team are happy to assist you. Alternatively you can request to book a free 30-minute consultation with their experienced and highly qualified team via our website now. Additionally, you can also check out the Business Kitz subscription service today to access our full range of legal, commercial and employment documents to begin your business with a solid foundation that ensures compliance.