Accruing and debiting leave

Purpose of this Guidance Note

This information aims to assist employees and employers to understand Coal LSL’s views as to how long service leave is accrued and how long service leave should be taken and debited under the long service leave scheme which applies to Australia’s black coal mining industry, and which is governed by the Coal Mining Industry (Long Service Leave) Administration Act 1992 (the Admin Act) and associated legislation.

Coal LSL acknowledges that there is not a direct correlation between the accruing and debiting of long service leave and the calculation of ‘eligible wages’ and the ‘amount reimbursed to employers’ following a payment of long service leave.

Coal LSL is responsible for administering the scheme and maintaining records of an employee's long service leave credit. While this information represents the opinion of Coal LSL, it is not intended as legal advice and is not determinative of legal rights or obligations.

The scheme applies to employees who are 'eligible employees' under the Admin Act, and to their employers.

The examples given in this information are indicative only and intended as illustrations of how, in the opinion of Coal LSL, the relevant concepts in the Admin Act are to be applied.

NOTE: Reference to a ‘mine’ or ‘coal mine’ in this information refers to a black coal mine.

The long service leave scheme

The scheme in the Admin Act reflects agreement between employees and employers in the Australian black coal mining industry about how long service leave should be accrued and recorded.

The approach to the taking, accruing and debiting of long service leave in this Guidance Note is based on the way such leave has customarily been taken in the black coal mining industry.

Coal LSL recognises that there have been variations in the way in which long service leave has been recorded by employers and has produced this Guidance Note to promote consistency and transparency across the black coal mining industry.

How is long service leave accrued?

Eligible employees are entitled to take long service leave after 8 years of qualifying service. Qualifying service is service as an eligible employee of one or more employers. It does not include certain absences.

For service since 1 January 2000, all service as an eligible employee counts towards qualifying service, unless the eligible employee stops being an eligible employee for 8 continuous years or more (a break period). In most cases, any service before a break period will stop being counted as qualifying service. For service prior to 1 January 2000 to count towards qualifying service, it must be ‘continuous service’. Where an employee was not an eligible employee at any time during 2012, special transitional provisions apply in respect of service prior to 1 January 2012.

Eligible employees accrue long service leave credit hours for each week during which they are employed as an eligible employee based on their working hours.

Employers are required to report to Coal LSL the details of the hours worked by part-time and casual employees as part of the employer monthly Levy Advice form.

Meaning of working hours for accrual purposes

• Full-time employee – 35 hours per week.

• Part-time employee – total number of ordinary working hours up to 35.

• Casual employee – hours worked during the week, up to 35 hours per week.

Long service leave accruals for full-time, part-time and casual employees

Full-time employee

Eligible employees who have 8 years’ qualifying service (continuous or in total) as a full-time employee are entitled 455 hours of long service leave, being the equivalent to 13 weeks at 35 hours per week.

Part-time and casual employees

• Part-time or casual employees are still entitled to long service leave after 8 years' qualifying service. However, the amount of leave is based on the long service leave credits they accrued over the 8 years of qualifying service (see below).

• Part-time employee – long service leave accrues at a rate which reflects the number of ordinary hours worked each week as a proportion of 35 hours. If the part-time employee worked half the hours a full-time employee worked over the same period, i.e. 17.5 hours per week, they will accrue half the long service leave credits, i.e. 6.5 weeks of 35 hours per week.

• Casual employee – long service leave accrues at a rate which reflects the number of hours they worked in the week, as a proportion of 35 hours, up to a maximum of 35.

How is long service leave to be taken?

Section 39AB of the Admin Act deals with the granting of long service leave to eligible employees. It sets out a statutory right for an employee to apply for long service leave, how that application should be made and how and when an employer should respond to the application.

39AB Grant of long service leave

(1) An eligible employee may apply, in writing, to his or her employer to take a period of long service leave.

(2) The employee may only apply to take a period of long service leave that:

(a) is a single continuous period of at least 14 days (being equivalent to a number of hours of long service leave as agreed with the employer); and

(b) does not exceed the employee’s LSL credit at the time the leave is to be taken.

Note: An employee is taken not to be on long service leave on public holidays and during certain other periods of absence (see section 39AE).

(3) As soon as practicable, but no later than 14 days after the application is made, the employer must give the employee a written response:

(a) stating whether or not the employer grants the long service leave; and

(b) if the employer refuses to grant the long service leave—giving details of the reasons for the refusal.

(4) The employer may refuse to grant long service leave only on reasonable business grounds.

Meaning of LSL credit

(5) For the purposes of this section, the long service leave credit (LSL credit) of an eligible employee on a day (the calculation day) is the number of hours worked out as follows:

(a) first, add together the number of hours of long service leave that the employee is entitled to under section 39AA for each week of qualifying service completed by the employee before the calculation day;

(b) then, subtract the number of hours of long service leave (if any) previously granted to the employee under this section.

Note: The number of hours of long service leave that an employee is entitled to in respect of certain qualifying service may be affected by section 39CE.

Civil penalty provisions

(6) Subsections (3) and (4) are civil penalty provisions.

Note 1: Part 7A provides for pecuniary penalties for contraventions of civil penalty provisions.

Note 2: Division 4 of this Part provides other remedies for contraventions of civil penalty provisions.

Employees and employers must ensure that applications for long service leave are for at least the minimum duration, being a single continuous period of at least 14 calendar days – this period excludes public holidays and certain other absences (see section 39AE).

At the time of approving an application for long service leave, the employer and employee should agree in respect of the number of hours to be debited for that leave. This agreement may be set out in the employee’s industrial instrument or obtained in some other way (such as through the long service leave application form). If there is no express agreement, the employee’s hours should be debited on the basis of 35 hours per week, depending of course on whether they are a full-time employee or not.

How should an employee's long service leave be debited?

When adjusting the record of an eligible employee's long service leave, Coal LSL will subtract from the employee's long service leave credit the number of hours of long service leave as agreed between the employee and the employer under section 39AB, as notified by the employer.

When coming to an agreement about the number of long service leave hours to be debited for the employee's period of absence from the workplace, the employee and employer should take the ordinary hours of work of the employee as a basis for calculating the equivalent number of long service leave hours to be debited by Coal LSL.

An employee's ordinary hours of work are those specified in an industrial instrument that covers the employee or, if there is no such instrument, the hours agreed between the employee and employer as being the ordinary hours of work, regardless of the number of hours actually worked by the employee.

Under the Black Coal Mining Industry Award 2010, the ordinary hours of work are an average of 35 hours per week.

In the usual case, for each week's absence from the workplace, the equivalent number of long service leave hours would be the employee's ordinary hours of work for a week.

However, it may be that the employee and employer agree on a different number of equivalent long service leave hours (see example 6 below). Such an arrangement must of course be consistent with any industrial agreements that apply to the employer and employee.

Examples of the calculation of long service leave hours to be debited

Example 1: A full-time employee working a regular roster Warren is a full-time employee of ABC Pty Ltd. He has worked in this role for 8 years and has accrued 455 hours of long service leave credit. Under the enterprise agreement made with his employer, Warren's ordinary working hours are 35 hours per week.

Warren currently works a regular roster (Monday to Friday) and has no rostered overtime. He applies to take all of his accrued long service leave credit and ABC Pty Ltd agrees.

Conclusion: On taking long service leave, Warren will be absent from the mine for 13 weeks and ABC Pty Ltd will notify Coal LSL that his long service leave credit should be debited a total of 455 hours (13 weeks x 35 ordinary hours per week).

Example 2: A full-time employee working a regular roster with rostered overtime Steve works for 123 Pty Ltd on full-time work at a coal mine. He has done this type of work for 8 years and has accrued 455 hours of leave credit. He is rostered to work Mondays to Fridays with 35 ordinary hours and an extra 5 hours of rostered overtime each week.

On the birth of his first child, he applies to take all of his accrued long service leave credit and 123 Pty Ltd agrees.

Conclusion:

• On taking long service leave, Steve will be absent from the workplace for 13 weeks and 123 Pty Ltd will notify Coal LSL that his long service leave credit should be debited a total of 455 hours (13 weeks x 35 ordinary hours per week).

• The 5 hours of rostered overtime per week is not included in the number of hours to be debited from his long service leave credit.

Example 3: A full time employee who works a shift roster with rostered overtime Carol has worked for DEF Pty Ltd as a full-time employee for 8 years and has accrued 455 hours of long service leave credit. She works a 7-day 12-hour roster, and the ordinary hours component of each shift is 10 hours with an overtime component of 2 hours.

Carol applies to take 14 days of long service leave where she was rostered on for 5 shifts.

Conclusion:

• Carol will be away for 2 weeks and DEF Pty Ltd should notify Coal LSL to debit her long service leave credit by the number of ordinary hours which, according to her roster, she would have worked during the period of her leave, had she not been on leave.

• Carol will be debited 50 hours long service leave; the rostered overtime per week is not included in the number of hours to be debited from her long service leave credit.

• DEF Pty Ltd agrees that Carol can re-join her shift on the first working period (a Tuesday night shift) occurring after the completion of her 2-week holiday.

Example 4: A full time employee who works a shift roster with rostered overtime Carol (from example 3) requests to take additional long service leave for a period of 14 consecutive days, where she was rostered on for 9 shifts.

Conclusion:

• Carol will be away for 2 weeks and DEF Pty Ltd should notify Coal LSL to debit her long service leave credit by the number of ordinary hours which, according to her roster, she would have worked during the period of her leave, had she not been on leave.

• Carol will be debited 90 hours long service leave; the rostered overtime per week is not included in the number of long service leave hours to be debited from her long service leave credit.

Example 5: A part time employee working a regular roster Dennis works for 456 Pty Ltd as a part time employee and works a regular roster (Monday to Friday) of 20 ordinary hours per week. Prior to working for 456 Pty Ltd, he worked for ABC Pty Ltd as a full-time employee for 8 years. He has qualified for long service leave and has 455 hours of long service leave credit accrued.

Dennis and 456 Pty Ltd have agreed that he can take most of his long service leave so that he can travel around Australia on his motorbike.

Conclusion: Dennis will be away from work for 22 weeks and 456 Pty Ltd will notify Coal LSL to debit 440 hours (22 weeks x 20 ordinary hours per week) from his record of long service leave credit held by Coal LSL.

Example 6: A part time employee working a shift roster Sandy works part time for GHI Pty Ltd and over a 4-week shift cycle, works an average of 12.5 hours a week. Sandy has worked as both a full-time and part-time employee of GHI Pty Ltd over the last 8 years and has accrued 350 hours of long service leave credit in that time.

Although GHI Pty Ltd has agreed Sandy could take her long service leave at her part-time hours (i.e. 28 weeks x 12.5 ordinary hours per week), Sandy would like to take them all early so she can attend an on-campus university course for a term. GHI Pty Ltd and Sandy agree to take this approach.

Conclusion:

• Sandy enrols in her course and is away from work for 10 weeks. GHI Pty Ltd notifies Coal LSL that Sandy's long service leave credit should be debited the whole 350 hours.

• Sandy is paid for the 10 weeks she is away, at a rate of 35 hours per week, in contrast to her usual 12.5 hours per week.

• Sandy returns to her part-time shift cycle at GHI Pty Ltd on completion of her term of study.

Example 7: A casual employee Ashleigh has been employed by a variety of employers and has accrued, over a total of 8 years of eligible service, 180 hours of long service leave credit and is therefore entitled to take, and be paid for, an amount of long service leave.

Ashleigh goes to her last employer (JKL Pty Ltd), 3 months after leaving their employ, and asks to be paid for her long service leave under section 39C of the Act.

Conclusion:

• JKL Pty Ltd notifies Coal LSL to debit Ashleigh's long service leave record for the whole 180 hours of long service leave credit.

• JKL Pty Ltd must pay Ashleigh no less than the amount that would have been payable to her under the Act had she taken the 180 hours long service leave immediately before ceasing her employment with JKL Pty Ltd.

Example 8: Long service leave and public holidays Lachlan works for MNO Pty Ltd in Queensland and has been a full-time eligible employee for 8 years and has 455 hours of long service leave credit. He plans to take 2 weeks of his long service leave (14 continuous days) and rebuild his patio.

MNO Pty Ltd and Lachlan have agreed that Lachlan will take his long service leave at 35 hours a week at the beginning of June. The period of leave will take in the King’s Birthday public holiday.

Conclusion:

• Lachlan starts his 2 weeks of long service leave on the Monday of the week before the public holiday. He returns to work on the Monday after his second week of long service leave.

• As the public holiday occurs during his break from work, Lachlan will not be considered to be on long service leave for that day and will only be debited for 63 hours of long service leave credit for his time away from work. Lachlan is paid for the public holiday as he would normally be had he not been on long service leave.

• Nonetheless, the occurrence of the public holiday does not break the minimum 14 continuous days of long service leave that Lachlan is required to take under the scheme.