Can remote work impact long service leave entitlements in Victoria?
15 September 2021
With long-term remote work arrangements now the norm, workers have had the chance to work from interstate or even overseas. Could this impact their long service leave entitlements? A recent Court of Appeal decision in the Supreme Court of Victoria found that two employees who had worked at a Victorian-based organisation for more than seven years, did not meet the 'continuous employment' requirement in Victoria's Long Service Leave Act 2018 (the Act). This was on the basis that for a large part of their employment, the employees had worked overseas.
What were the circumstances?
The two people were long-term employees of the company. They were based in India and the UK before moving to Victoria. They had both completed more than seven years of employment with the company before their employment was terminated.
Their employer argued that it was not required to pay them long service leave as 'continuous employment' in the Act referred to employment in Victoria and the periods of work overseas could not be included in this definition.
The State of Victoria challenged the employer’s decision, arguing that period of employment overseas should be counted in the definition of 'continuous employment' as the connection between the employment and the state of Victoria could be met in different ways.
What did the Court decide?
The Court noted that the LSL Act was silent on whether employment outside Victoria for the same organisation could be counted towards "continuous employment" to determine long service leave entitlements in Victoria.
The Court came to the conclusion that 'seven years of continuous employment with one employer' had to be to be interpreted as meaning 'seven years of continuous employment with one employer in and of Victoria', and that 'in and of' Victoria means a 'close identification' between the continuous employment and Victoria. These circumstances might be different if an employee based in Victoria is seconded overseas or interstate for the same company.
What are the consequences for other Victorian organisations?
COVID-19 has had a significant impact on Australian employers. The closing of borders and remote work arrangements has meant that many people are working overseas or interstate. This case and its outcome could therefore be significant for Victorian employers who have staff in similar situations. Employers should give thought to whether periods of employment overseas or staff engaged from overseas fall under the definition of 'continuous employment' in Victoria.
Read the full case and decision.
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