Comprehensive Guide to the Victorian Long Service Leave Act 2018

Please see Comprehensive Guide to the Victorian Long Service Leave Act 2018.

What is a penalty unit?

A penalty unit is used instead of a dollar amount in most modern legislation. Not abiding by the Long Service Leave Act 2018 (LSL Act 2018) may subject employers to penalties.

An authorised departmental officer may prosecute for a breach of the LSL Act 2018.

These penalties can apply for each day during which the offence continues. If an employer is found guilty of this offence, a criminal conviction may also be recorded.

When do penalty units apply?

Penalties may apply where an employer:

  • fails to pay an employee while the employee is on Long Service Leave (LSL)
  • fails to pass on a pay increase that occurred while the employee was on LSL
  • fails to pay an accrued entitlement on termination of employment
  • fails to pay an accrued entitlement on the employee's death
  • pays an employee in lieu of allowing the employee to take LSL as a paid break from work – known as 'cashing out'
  • knowingly employs a person while that employee is on LSL from employment with that employer or another employer
  • fails to maintain correct records
  • makes a false or misleading statement in a record
  • fails to provide information or documents to an authorised officer
  • provides a false or misleading document to an authorised officer
  • refuses an employee’s request to be provided with a copy of an LSL record relating to the employee
  • takes adverse action against an employee because they have or exercise a right or entitlement under the LSL Act 2018.

Penalties may apply where an employee:

  • accepts payment instead of taking LSL as a paid break from work – known as 'cashing out'
  • works elsewhere while on LSL from another employer.

Who else is liable?

  • Under the LSL Act 2018, a director of a corporation, or a person who takes part in the management of a corporation, may also be liable for the conduct of the corporation where the director knew about the conduct, or was reckless as to whether the conduct engaged in was in breach of the LSL Act 2018.
  • If found guilty, the director or manager would then be liable for penalties and/or criminal conviction, in the same way as the corporation.
  • Conduct of a director, employee or agent acting with apparent authority, or of a person authorised by a director, employee or agent, is also conduct engaged by the corporation itself.

What if an employer doesn't pay long service leave?

  • An employee may seek recovery of their unpaid LSL entitlement
  • The application is heard in the Magistrates' Court. An order in the employee's favour  may also include interest.
  • The proceeding must commence within six years of the day that employment ended
  • Employees may ask an organisation registered under the federal Fair Work (Registered Organisations) Act 2009 to take an action to recover money on their behalf. They may make such a request if they're a member of the organisation, or eligible to be a member.
  • If an employer fails to pay an employee his or her long service leave entitlement, the employer may also be prosecuted in the Magistrates' Court.
  • Wage Inspectorate Victoria is able to investigate claims of unpaid or underpaid long service leave entitlements and can pursue a prosecution in the Magistrates' Court for an offence under the LSL Act 2018
  • If an employer is found guilty of failing to pay a LSL entitlement, the employer may be fined the appropriate penalty and may also have a criminal conviction recorded against them – there is also the possibility of an order being made that the employer be responsible for the legal costs of the prosecuting agency.
  • If the employer is found guilty, the Court may also order that the employer pay their employee the money due to the employee, possibly with interest – the penalty for this offence is 12 penalty units for a natural person and 60 penalty units for a body corporate. These penalties apply to each and every day during which the offence continues, which may result in a significant fine.

Prohibition on adverse action

The LSL Act 2018 prohibits an employer from subjecting an employee to some form of detriment, such as dismissing or demoting an employee, in relation to the employee’s LSL entitlements. This is known as adverse action and is a criminal offence.

  • As it is difficult for an employee to prove that the employer's reason for alleged adverse action are related to their LSL entitlements, the LSL Act 2018 provides a reverse onus of proof. Where the employee can establish that they were prejudiced in some way, in relation to their LSL rights, the employer must prove that the detriment was for some other lawful reason (unrelated to LSL).
  • Generally, the penalty for committing adverse action against an employee is 12 penalty units for individuals or 60 penalty units for a body corporate.
  • The Court can also order reinstatement and reimbursement of lost wages. Where reinstatement is not appropriate the Court may order compensation.
  • Where an offence involves adverse action, the Court may (in certain circumstances) order the employer to pay the employee reimbursement for lost remuneration and reinstatement to their former or similar position.
  • Where adverse action is the dismissal of the employee, the Court may order up to 52 weeks’ remuneration earned by the employee immediately before their employment ended. This is in addition to their LSL entitlement and other penalties.

You can find more information about penalties for breaching the LSL Act 2018 by viewing the:

Get help with long service leave

Wage Inspectorate Victoria is responsible for regulating long service leave in Victoria.

For further assistance and advice about long service leave, contact the Wage Inspectorate online or call 1800 287 287.  

We welcome any feedback, comments and suggestions you might like to share.

You also have the option to make an anonymous report if you suspect someone is breaking the rules relating to long service leave but you don’t want to provide personal information.

Handy tools