What it does
The Long Service Leave Act 1955 (NSW) establishes a statutory minimum entitlement to paid long service leave for workers in New South Wales. At its heart, s 4(1) provides that every worker is entitled to long service leave on ordinary pay in respect of service with an employer, counting both pre- and post-commencement service. The quantum is set out in s 4(2)(a): after 10 years, a worker receives 2 months; each subsequent completed 5-year period attracts a further 1 month. On termination after 15 years, a proportionate amount is payable on the 2-months-per-10-years formula (s 4(2)(a)(i)(C)). For workers with 5–15 years whose employment ends for reasons other than serious and wilful misconduct, or who resign on account of illness, incapacity or pressing necessity, or who die, a pro-rata amount calculated on the 2-months-per-10-years (or 3-months-per-15-years for 10–15 year terminations) basis is available (s 4(2)(a)(ii)–(iii)).
The Act is prescriptive about when and how leave must be taken. Under s 4(3), once entitlement arises the employer must grant and the worker must take the leave “as soon as is practicable having regard to the needs of the employer’s establishment”, unless the parties agree to postpone it. Leave may be taken in one continuous period or, by agreement, in two, three or four separate periods depending on length (s 4(3)(b)). Since 2022, s 4(3AA) permits any number of separate periods of not less than one day. Advance taking of leave before entitlement is possible by agreement (s 4(3A)), although such advance leave does not itself trigger further accrual under the main formula.
“Ordinary pay” is defined at length in s 3(1). It is the sum of four components: (a) the greater of the worker’s ordinary time rate on the prescribed date or the 5-year average; (b) average weekly earnings (excluding shift, overtime and penalty rates) over the longer of the last 12 months or 5 years where the worker is not on a fixed ordinary time rate; (c) average weekly bonuses over the corresponding period; and (d) the cash value of board or lodging (fixed at $15/$5 per week or prescribed higher amounts if not otherwise set). The “prescribed date” is ordinarily the day before leave commences or death, but can be varied by agreement to postpone taking of leave (s 3(2B)). A regulatory cap now prevents inclusion of bonus or incentive amounts where ordinary pay already exceeds a prescribed threshold (s 3(2C)).