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Sending employees overseas: does long service leave apply?

Release Date

16 September 2013

As more Australian employers ‘go global’, the issue of long service leave entitlement may arise where an employee has spent considerable time outside of Australia.
 
Some employers in this situation presume that, as the employee is performing work outside the Australian jurisdiction, long service leave would not accrue as this is not a common employment condition in overseas countries. However, this thinking may be incorrect.

It is possible for an employee to continue to accrue long service leave even though a considerable period of total service was performed outside of Australia. However, there is no fixed period for which an employee can remain outside of Australia without losing the benefits of the relevant long service leave entitlement.


The tests
 

Industrial tribunals have generally applied the following ‘tests’ when considering overseas service with respect to long service leave:

  • 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 long service leave.
 

Where the event occurs is important
 

Generally, where the event occurs is important, the ‘event’ being either a termination of employment, a request to take a period of paid long service leave or, in some jurisdictions, cashing out of leave.
 
If the event occurs in Australia, the employee may have an entitlement to long service leave, with the overseas service recognised as part of total service for the purpose of calculating long service leave.
 
Where the employee is participating in a relocation program, involving overseas service with the same employer or a related company, an employee would most likely be accruing long service leave under their contract of employment.
 
An employee who is terminated by the employer overseas and, coincidentally, obtains employment with the same or a related company in Australia, would not have continuity of service because it was not the intention of the employer to re-employ the person. Likewise, a resignation by the employee from their employment overseas and subsequent re-employment in Australia with the same or related company usually breaks the continuity of service for the purpose of calculating the entitlement to long service leave.
 
 
Source: Paul Munro, IR Consultant, writes regularly for the HR/IR news and information website WorkplaceInfo
www.workplaceinfo.com.au
 

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