VIC - Resigning and long service leave eligibility

Poolprouk on 10/08/2020 - 16:21
Last edited 10/08/2020 - 16:45

Hi there,

I work in an industry badly affected by COVID-19 and am awaiting the chop at any time. It might not come but something has to give soon I think.

As i'm the sole income earner in my family I've decided not to wait for redundancy and pro actively look for another (COVID safe!) role. I have an interview this week. I'm not counting my chickens but I'm trying to work out what my options are should I receive an offer

I reach the 7 years service mark in mid September when I would qualify for Pro-rata long service leave (13 weeks for 10 years is the usual rate for my company) which I would expect to be about 9 weeks worth of salary.

My question is this, if I resign and give notice (4 weeks) that i wish to leave on the day after my 7 year anniversary will i still be eligible for a long service leave payment? Or are you generally only eligible if you reach 7 years and are not in a notice period.

I would think that it would still be payable as leaving benefits are calculated from the last day of service but wondered if anyone had a view or experience on this.

Thanks for any advice offered.

Education & Work

Comments

  • GG57 on 10/08/2020 - 16:33
    +7

    I'm not sure of your entitlements, but might it be worth talking to your current employer (when you have a new job offer) and ask if they would be interested in you taking a voluntary redundancy?
    It could be a win-win, as you would still get your redundancy benefits (with a job to go to) and they don't need to go through the process of deciding who to make redundant.

    <edit> Just had a look at: https://www.business.vic.gov.au/hiring-and-managing-staff/lo….
    The relevant part is "Employees are entitled to take LSL after a minimum of 7 years’ continuous employment." and you would still be employed during your resignation notice period (in my understanding).

    • Poolprouk on 10/08/2020 - 16:40

      Yes i'll give it a try, i suspect they'll call my bluff pretty quick though. In the current climate why would most people be asking for voluntary redundancy when there's less jobs out there (unless you're near retirement i guess).

      I think they'd take a punt at the chances that I have another job to go to.

      I had hoped to find something on a 6/12 month contract and was going to offer to do some form of 'career break' to allow me to rejoin (and keep my existing long service/sick leave entitlements) when things may have improved but this new role would be a 3 year fixed term contract.

    • Ginag on 11/08/2020 - 10:23

      Hi poolprouk, Long service leave legislation varies across Australia. You have to see what legislation your company follows. If it is 1) commonwealth legislation, that is your are entitled to Long service leave at 10 years. If you become REDUNDANT before 10 years and after 7 years service you get paid a pro-rata amount. If you resign before 10 years you get NOTHING as you haven't accrued 10 years yet and you are not entitled to Long service leave. If you resign after 10 years you get your Long service leave paid out, just like you would annual leave. You have to be very careful!!!! 2) if your employer follows state legislation, for example Victoria, then you get Long service leave at 7 years. So the above applies but at the 7 year mark. You have to know what legislation your employer follows first to then look at your entitlement.

  • pantsparty on 10/08/2020 - 16:39
    +2

    The 7 year requirement is based on the day that your employment ends, not on the day you resign. If you give 4 weeks notice anytime in September than by the time you finish up in October you should be fine.

    • Poolprouk on 10/08/2020 - 16:42

      I was thinking that i might have to accept this job mid to late this month but it should get me past that mid september anniversary date so as you say it should be fine. I hope! :-)

  • onetwothreefour on 10/08/2020 - 16:59

    Do you still get paid LSL if you resign?

    • AFOS on 10/08/2020 - 17:06

      Yes, provided you have served 7 years.

    • Ryanek on 10/08/2020 - 17:12

      Yes.

    • Ginag on 11/08/2020 - 10:28

      Only if you have accrued LSL, similar to annual leave. If you leave before you have accrued it, then you don't get paid. Example if your employer follows Commonwealth legislation you get LSL at 10 years. If you resign earlier you don't get it. If you are made redundant and haven't worked 10 years you get a pro-rata amount. If you worked 10 years and then resign you get it paid out like annual leave

    • shakman on 11/08/2020 - 13:32

      In Victoria, yes

  • Shadowsfury on 10/08/2020 - 17:05
    +6

    You should still be eligible - but also weigh up if your employer might be a d*ck and ask you to finish up early once you hand in your notice period - you might get paid out for the time they ask you to leave early but I don't know on its possible effects on LSL.

    Maybe worth reading through your company's LSL policy to see if there's anything that might catch you out - especially since you seem to get more than the standard which is 52/60 x years of service.

    • AFOS on 10/08/2020 - 17:21
      +2

      Totally agree. I would not play with fire here. If they have a practice of paying notice period instead of allowing to work it, your employment term may become a bit shorter than required 7 years. I am not sure if FWC will be hearing the case as it is different legislation. If that is the case you will need to go magistrate court to fight it which is not fun (not 100% sure though).

      Much easier to work 7 years and then explore possibilities of voluntary redundancy etc…

      Plus, it's worthwhile to check if you have been employed by the same entity for the whole term. I have seen employers trying to fight continuity of employment based on employee being employed by different entities.

      • Poolprouk on 10/08/2020 - 18:23

        Thanks. I’m pretty sure if they paid out early then they would have to pay out the amount due to me at the date of completion of my notice period. They can put me on gardening leave if they like but my termination date will not change. Either way I will not accept any shortening of my notice period whether I am required to work it or not.

        • Cheapskate Paul on 11/08/2020 - 02:45
          +3

          Be very careful here. There is a good chance that if they pay out your notice period then your termination date will likely be your last day at work, which may make you ineligible for LSL. I wouldn't give notice until I had completed 7 years.

          Don't forget to take any periods of leave without pay into account when calculating the 7 years.

  • sweefu on 10/08/2020 - 17:09
    +6

    If they decide to pay you out for your notice period and have you finish up immediately, I believe you are no longer an active employee?

    • Poolprouk on 10/08/2020 - 18:16

      They’re entitled to ask me not to work my notice period but they can’t bring forward my effective termination date I believe without paying me my entitlements that would have been due on the termination date given in my notice.

      I’d ask them to give me an indication of my annual/long service leave entitlements when I give my notice and wouldn’t accept any bring forward of the termination date.

      • Hardlyworkin on 10/08/2020 - 19:00
        +4

        Listen to sweefu!!!!!!!!! Or not at your own risk if you just want to hear what suits you.

        If you give notice then your employer doesn't have to keep you around. Your employment can end then and there as long as they pay your notice. If you're short of 7 years then it's bad luck. If your employer is in tough times then they may look to save money where they can. A notice period not worked is not service for the purposes of redundancy!

        • Poolprouk on 10/08/2020 - 20:39

          I do hear you. I appreciate the input. I’ll have to do some more digging on this point.

          Personally I would have thought that could only be done via mutual agreement as in theory when giving me notice, they are also in the boat of having to give 4 weeks notice before it can become effective.

          Perhaps I could make my notice conditional on it meaning I finish on a certain date or the notice is withdrawn.

          However I’ll look into this further. Thanks for your input.

          • taoz on 10/08/2020 - 21:10
            +2

            @Poolprouk: your safest bet is to wait till you hit 7 years.

            they can end you and you havent worked the 7 years. its will be cheaper for them, so if they are on the ball they will do this.

          • Hardlyworkin on 10/08/2020 - 22:21

            @Poolprouk: Your employer can end your employment whenever they want and pay out your notice. It just has to be fair, just and reasonable. If youve already given notice and your employer says ok finish up now and we will pay your notice it's not going to be an unfair dismissal.

            If you need to do some digging I'd suggest you speak with an industrial relations lawyer/professional opinions won't cut it.

            • Poolprouk on 10/08/2020 - 22:25
              +2

              @Hardlyworkin: Yes I've been reading the guidance on the act and it definitely suggests that i need to get to the 7 year mark before doing anything.

              Here's hoping that they don't pull the trigger before then.

              Thanks again for your input.

  • conan2000 on 10/08/2020 - 17:32
    +3

    Be careful that you give the notice you are required to give and not say an extra week to get the LSL paid out. An employer does not have to accept a notice period longer than you are required to give.

    I.e. You have a 4 week notice period and your LSL would only be paid out at the 5 week period, so you give 6 weeks notice to be safe. The employer can say no and only accept 4 weeks.

    Also note that there are other things that may impact your eligibility, such as periods of unpaid leave. I'm not an expert on this but it can impact things such as redundancy payment eligibility, so just something to bare in mind/investigate further.

    • Poolprouk on 10/08/2020 - 18:18

      Thanks, I would only give notice at a maximum of 4 weeks before my anniversary date. I haven’t taken any unpaid leave but a good call out.

  • [Deactivated] on 10/08/2020 - 17:52

    Got an offer today for $36 p/h job, plenty of fish in the sea

    • Poolprouk on 10/08/2020 - 18:27

      That’s great! More funds for ozbargains!

  • Austaurean on 10/08/2020 - 19:45

    There has been another post a while ago discussing this.

  • original15 on 10/08/2020 - 21:33

    Contract you’re on is definitely 4 weeks notice? Would want to be absolutely sure before rolling the dice

  • Poolprouk on 10/08/2020 - 21:41
    +6

    Thanks to all for your input.

    I think the safest bet is to wait for an offer from the prospective employer and then come clean that I’d like to delay my start date to mid October. If they want me then I would hope they’d be willing to wait. Given the COVID situation if I quit on 7 years + 1d then there’s a chance my current employer might be happy to pay me out on the spot in which case I could then tell my prospective employer that I could start earlier.

    I’ll wait till the clock ticks over 7 years.

  • Stewardo on 11/08/2020 - 00:14

    I’ve know people who quit just after anniversary only to find themselves ineligible because they didn’t factor in any unpaid leave, which pushes back the date.

  • pandabear on 11/08/2020 - 09:12

    If you do find a short term contract role, could you ask your current employer to take some leave without pay rather than resigning - therefore keeping your LSL entitlements?

  • OzHunterNSW on 11/08/2020 - 09:44

    Don't throw the baby out with the water.

    Don't chop your nose off.

    Don't burn your bridges.

    Go look for more secure work. Just keep it to yourself.

    If you are to be made redundant, the company will feel bad, and offer a much larger bonus than otherwise so.

    If you hand in your notice, that is a bonus for the company—— thanks, see ya….

  • Sanfrancisco on 11/08/2020 - 09:54

    Don't even mention notice or give notice before you have completed 7 years service.

    The employer has no obligation to pay LSL until the period of service has been met. The employer can pay out your notice period and still be ahead.

    Don't put 9 weeks wages in doubt by getting too cute on second guessing what might or might not work.

  • Robz on 11/08/2020 - 11:48
    +1

    Have you taken any extended sick leave ie, time off for a broken leg, operation etc . This does not include your normal sick leave of a day or 5 or 6 days. Otherwise your anniversary day period of accrual is extended by the sickleave

    • Cheapskate Paul on 11/08/2020 - 21:16

      All sick leave counts as service, even sick leave without pay.

  • Euphemistic on 11/08/2020 - 12:12

    If you do get paid out get some financial advice. I left a job and got paid out a significant amount of LSL and AL and lost a big chunk of it to tax because I started working straight away, was effectively getting double salary for quite a few weeks but paid in a lump.

  • Ginag on 12/08/2020 - 09:21

    Hi poolprouk, if your employer follows the Commonwealth legislation, you only get long service leave after TEN years. I'm in Victoria and my employer follows this. So if you resign at 7 years you get NOTHING as you are not entitled to it. If however you get retrenched, you get a pro rata amount. I would clarify what laws your employer follows. Don't assume it is the state legislation.

    • Poolprouk on 12/08/2020 - 09:38

      Interesting. I assume this only applies if you are employed by the commonwealth or one of their agencies?

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