Queensland resolves dispute on long service leave entitlements

Worker performed most of his work outside Australia. Is he entitled to long service leave?

Queensland resolves dispute on long service leave entitlements

The Queensland Industrial Relations Commission (QIRC) recently dealt with a long service leave dispute between a worker and his employer, a foreign company registered in Australia.

The worker claimed unpaid wages representing his alleged long service leave entitlements, while the employer challenged the worker's eligibility for such entitlements under Queensland law.

The case raised questions about the interpretation of "continuous service" provisions in the Industrial Relations Act 2016 (Qld) (IR Act) for the purposes of long service leave when an employee's service was primarily performed outside Queensland.

The Full Bench of the QIRC had to discuss unresolved issues from a previous case, making this decision a significant one in the realm of long service leave entitlements.

Service performed outside Australia

The dispute of this case revolves around the interpretation of long service leave provisions in the IR Act and their application to employees who have performed a significant portion of their service outside Queensland.

Long service leave is a unique entitlement in Australia, which rewards employees for their continuous service with an employer by granting them an extended period of paid leave.

In Queensland, the entitlement to long service leave arises under section 95 of the IR Act, which stipulates that an employee must have completed at least ten years of continuous service with their employer to qualify. The definition of "continuous service" is provided in section 93 of the IR Act, which states that it can be "wholly in the State or partly in and partly outside the State."

The worker, in this case, was an Indian national employed by a multinational company registered in Australia as a foreign company. He worked for the company for over ten years, primarily in India, with short periods of service in Melbourne and Brisbane towards the end of his employment.

Upon his resignation, the worker claimed unpaid wages representing his alleged long service leave entitlements under Queensland law. The employer challenged the worker's eligibility for long service leave, arguing that there was no substantial connection between his service and Queensland.

This argument was based on previous cases dealing with similar issues in other Australian states, where courts had implied a "substantial connection" requirement between an employee's service and the state where long service leave was claimed.

Interpretation of Queensland’s labour laws

The Full Bench delved into the interpretation of sections 93 and 95 of the IR Act, which deal with continuous service and long service leave entitlements. The Bench noted that a literal reading of these provisions would grant the worker long service leave, as he had completed ten years of continuous service, with part of it being in Queensland.

The employer relied on previous cases that implied a "substantial connection" requirement between the employee's service and the state where long service leave was claimed.

However, the Bench distinguished those cases, emphasising that the IR Act explicitly provided for service within and outside the state to be counted towards the entitlement.

"None of the authorities looking at interstate legislation are relevant to the construction of s 93(b) of the Industrial Relations Act. In the other States, the relevant provisions are silent as to whether service outside the State counts in the calculation. That necessarily leads to the consideration of provisions like s 35(1)(b) of the Acts Interpretation Act 1954 and consideration of the intention of the legislature as to the effect of acts and events occurring outside the State."

The Bench clarified that the IR Act's wording did not necessitate implying a broad geographical requirement beyond the statutorily prescribed "service ... partly in the State" trigger.

The worker’s Queensland service

The Full Bench rejected the employer's argument that section 131(2) of the IR Act excluded the worker's long service leave entitlement due to the benefits he received under Indian law. The Bench explained that section 131(2) only affected rights or entitlements arising under Chapter 2 of the IR Act, an industrial instrument, or a federal industrial instrument, which was not the case with the Indian law benefits.

Regarding the timing of the worker's Queensland service, the Bench emphasised that the IR Act did not require the calculation of continuous service to commence upon service in the state. Once the worker performed service in Queensland, his earlier service outside the state could be counted towards the entitlement.

Lastly, the Full Bench addressed the employer's argument that if the IR Act provisions were construed as submitted by the worker, they would be beyond the power of the Queensland legislature.

The Bench referred to the High Court's "real connection" test and concluded that the provisions were within the state's legislative competence, as they bestowed benefits upon workers performing work within Queensland's geographical boundaries.

The Full Bench’s conclusion

The Full Bench declared that the worker had an entitlement to long service leave, having served ten years of continuous service partly inside and partly outside Queensland. The Bench also clarified that the sums paid under Indian law should not have been offset against the worker's entitlement.

"It is therefore appropriate to declare that [the worker] has an entitlement to long service leave because he has served ten years continuous service partly in and partly outside the State."

It added that any dispute regarding the calculation of the entitlement was remitted to a Deputy President for determination, and the parties were given the opportunity to make submissions on costs.

The decision is a significant development in the interpretation of long service leave provisions in Queensland, particularly in cases involving employees with substantial service outside the state.

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