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Ensure employees don’t double-dip on leave entitlements

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HC Online | 11 Sep 2013, 12:00 AM Agree 0
Ensuring the proper contractual arrangements are in place before an employee heads abroad on a secondment can be like navigating a minefield, and one of the most common pitfalls occurs when errors are made in the fine print of leave entitlements.
  • Karen Thomas | 24 Apr 2013, 03:51 PM Agree 0
    So is the topic of sick and annual leave one that is decided upon by each individual business rather than an 'across the board' determination? I am a bit confused.
  • Pat from Brisbane | 11 Sep 2013, 04:47 PM Agree 0
    Hi Karen, for what it's worth in my view if the international assignment agreement or a variation of the local employment contract doesn't spell out that the contract is frozen for the duration of the absence, then the meter keeps ticking on Long Service, Annual and Personal Leave. A variation of the employment agreement should be able to freeze the Annual and Personal Leave entitlements but I would think the Long Service Leave would still need to follow the state legislation.
  • Michael | 06 May 2014, 09:40 PM Agree 0
    Hi There

    What would your thoughts be on the following situation regarding Long Service Leave.

    I have worked with the same employer for 9 years now. 8 years of this service was in NZ, and then I accepted a promotion which involved a transfer to Australia. This meant signing a new employment contract, however my original start date was preserved for all service related benefits. Naturally I assumed this included Long Service leave, however our HR team have stated that my service period for the reason of LSL only started from the date I signed the new agreement in Australia, however, as my start date remains September 2005, I still feel that my service should be at 9 years, not only 1. Any input or information much appreciated, Fair Work site only refers to start date as the basis for calculation of LSL entitlements.

    Many thanks
  • Jenny | 29 Aug 2014, 01:09 PM Agree 0
    I would like to know what your thoughts were for Michael's request on the 6/5/2014
  • Pat from Brisbane | 29 Aug 2014, 01:47 PM Agree 0
    Long Service Leave is a hangover from colonial times: pretty much confined to Australia and parts of the New Zealand and Indian public service. I expect the New Zealand employment - including entitlement or otherwise to Long Service Leave - would have been governed by the New Zealand Employment Relations Act and other country legislation, and if an entitlement existed, it would be either cashed up or forfeited on exiting the New Zealand business. Provision by the Australian business for LSL in respect to previous service with an overseas entity would be a matter for that business to decide, at their discretion, but would not be a legal obligation, as the Australian legislation would not have effect outside of Australia. I hope this helps?


  • Michael | 29 Aug 2014, 02:36 PM Agree 0

    Thanks for the feedback, that is what I suspected in relation to LSL, where there is no provision in NZ Employment Law for this.

    What are thoughts on continuous service however, should I ever be made redundant.

    Should years of continuous service, for calculation of redundancy pay, be based off my NZ start date of Sept 2005, as this was preserved in the Australian contract for the purpose of "service related" benefits, or from the date I signed the new employment contract in Australia?

    Any feedback on this aspect would be much appreciated.

    Kind regards
  • Renie | 01 Sep 2014, 12:53 PM Agree 0
    Hi Michael, you would probably need to see a lawyer with experience in workplace relations, and have him/her peruse your actual contract.
  • Ryan from Sydney | 13 Sep 2014, 12:03 AM Agree 0
    Hi Michael,

    Pat from Brisbane is not entirely correct. Your 8 years in NZ and your 1 year in Australia may attract long service leave entitlements in your State or Territory. Every State/Territory provides that employment transfers with a related company/corporation does not break long service leave entitlements. What is required is a "sufficient nexus" or connection between the employment and the state in which you are currently.

    In Australian Timken Pty Ltd v Stone (1971) AR 246, an employee who worked for 2 years overseas and transferred to NSW and continued to work for 8 years prior to his employment ending had an entitlement of 10 years service recognised by the industrial court.

    The below is an excerpt from the workplaceinfo website:

    "It is possible for an employee to continue to be regarded as an employee for the purposes of long service leave even though a considerable period of time was spent outside Australia in the performance of the contract of employment. However, there is no fixed period or method of calculating how long an employee can remain outside the jurisdiction without losing the benefits of the legislation. Industrial tribunals have generally applied the following 'tests' when considering this issue:

    was the employee employed in Australia in the first place?
    was the employee sent interstate or overseas by the company at their request and at their expense to increase the knowledge of the employee which would ultimately benefit the company?
    did the employee return to Australia for a substantial period?
    was it the company's intention that the employee return to Australia for the major part of their employment with the company?
    was the employment terminated in Australia?

    If most of these questions are answered in the affirmative, the employee may have continuity of service for the purposes of calculating an entitlement to long service leave."

    Best with your enquiry with HR.

  • Matt | 16 Sep 2014, 10:56 AM Agree 0
    The LSL component is not just when people work overseas. All states in Aust have different LSL obligations.
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