This is an update to EMA Note Issue 19 2015. The Long Service Leave Act 1987 (SA) has been amended to close the loophole for averaging weekly hours for casual and part-time employees.
Old provisions created an ‘unfortunate result’
Section 3(2) of the Long Service Leave Act 1987 (SA) (“LSL Act”) provides that the payment for long service leave for casual or part-time employees is calculated by multiplying their average weekly hours worked by the hourly rate that applies immediately before taking long service leave or on termination. The average hours are to be calculated over the period of three (3) years immediately preceding either the termination date or the date on which the leave is to commence.1
In January 2015 the Full Court of the SA Supreme Court found that for a casual or part time employee who is absent from work on workers compensation for a significant portion of the three year period, the LSL Act at that time operated such that that period of absence must not be disregarded for the purpose of averaging.2 The consequence was that their average hours – and therefore long service leave entitlement – may be significantly decreased.
This was somewhat of a loophole. The Supreme Court said it produced an ‘unfortunate result’ and suggested that the legislation should be amended.
Parliament closes the loophole
The LSL Act has been amended such that any periods during which a casual or part-time employee was absent from work and receiving payments for a compensable injury will be disregarded. The relevant periods for the purpose of averaging will be the periods (which need not be consecutive) totalling three years after disregarding any weeks when the worker was not at work due to unpaid leave or an absence from work on account of a compensable injury.
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1 Long Service Leave Act 1987 (SA), s 3(2)(b).