Australian Newsagency Blog

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Long service leave can be a challenge for newsagents

Mark Fletcher
December 11th, 2013 · 9 Comments

Newsagents need to make sure they are aware of their long service obligations, especially around the time of buying or selling a newsagency. From what I can see there are different rules in different states.  In NSW for example, it can kick in at five years whereas in Victoria obligations kick in at seven years.

I was talking with a newsagent yesterday who has discovered an obligation for two recently departed employees. They did not know they had the obligation. Ignorance does not eliminate the responsibility – this is what the authorities will say. Their accountant had not budgeted for the figure – that’s where the problem started in my view. Long service leave is an obligation that ought to be reflected in the financials of the business when you put it up for sale or at least dealt with in the paperwork reflecting obligations of the purchaser – even if there will be none.

10 likes

Category: Newsagency management

9 responses so far ↓

  • 1 carol // Dec 11, 2013 at 9:35 AM

    yes. I was made aware of this when a casual gave her notice after 12 years. I could not pay her out in a lump sum as I found she was owed 8.888 weeks long service for 10 years employment. I asked her to take her long service and I am paying that weekly. The fact she was owed long service made a difference to her and she is going to reconsider if she want to still retire after she has had a rest. Meanwhile I am working myself to death for 10 weeks with the help of juniors school kids over Christmas because I can’t afford to employ a replacement.

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  • 2 June // Dec 11, 2013 at 3:56 PM

    Carol, when buying a business you should remove all old employees and re-employ them. In other words the obligation for payment is on the incumbent not on the purchaser of the business.

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  • 3 Mark Fletcher // Dec 11, 2013 at 6:03 PM

    Carol, I was not aware that in QLD casual employees accrued long service leave. I just found this on the govt website:

    Prior to 23 June 1990, casual employees only gained an entitlement to long service leave in certain exceptional circumstances. As from 23 June 1990, an employee who is regularly employed by the same employer for at least 32 hours in each consecutive period of four weeks has an entitlement to long service leave.

    On 30 March 1994, the legislation was amended so that all continuous service after that date is taken into account in calculating long service leave entitlements. However, the continuous service ends if the employment is broken by more than 3 months between the end of 1 employment contract and the start of the next employment contract.
    In the case of casual employees who qualified for long service leave in accordance with any previous legislation, each period is totalled and taken into account.

    The casual entitlement to long service leave is calculated as the number of hours for the complete period of employment worked/52 x 8.6667/10.

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  • 4 carol // Dec 11, 2013 at 6:12 PM

    My advice is they are entitled to Long Service. Will do another check.

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  • 5 carol // Dec 11, 2013 at 6:49 PM

    Who is entitled to long service leave in accordance with the Act?

    Employees who work the prescribed period of continuous service with an employer, whether permanent, casual, part-time or any other basis, under one or more contracts of employment are eligible for long service leave. This is provided that, no other statute, agreement, pre-reform award or transitional award, that regulates long service leave, covers the worker.

    When does an employee become entitled to long service leave in accordance with the Act?

    During employment, an employee initially becomes entitled to an amount of long service leave once they have completed at least 10 years of continuous service with an employer. Once 10 years of continuous service has been completed, an employee must be engaged for an additional five years of continuous service with an employer to again be eligible for further leave.

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  • 6 Nathan // Dec 11, 2013 at 10:11 PM

    June that’s a horrible way to treat employees and a good way to lose experienced staff

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  • 7 Mark Fletcher // Dec 12, 2013 at 5:27 AM

    Nathan it’s actually good advice. Clean for everyone.

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  • 8 Shayne // Dec 12, 2013 at 7:12 AM

    Carol is right. I believe (in nsw at least) casual employees right to LSL continues even though they are re-employed under the new owner. We had an employee with 9 years service when we took over. The previous owner had to allow for the 5 year entitlement that the employee had. However when they quit 12 months later (with 10 years service) we had to wear the next 5 year entitlement to LSL even though we only got 12 months service from the employee.

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  • 9 David @ Angle Vale Newsagency // Dec 12, 2013 at 7:15 AM

    When buying, you should pro-rata the LSL, just as you do with rent, levies, etc.

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