Intro
The purpose of this guideline is to provide local governments and their employees with guidance on the Local Government (Long Service Leave) Regulations 2024 (the regulations) and the long service leave entitlements of local government employees.
This guideline is intended to assist local government payroll officers and employers in understanding the regulations.
This guideline is applicable to all local governments in the state.
The entitlement to long service leave for local government employees in Western Australia (WA) is provided under regulations made under the Local Government Act 1995 (the Act).
Previously, these regulations were the Local Government (Long Service Leave) Regulations of 1977 (the 1977 Regulations). From 1 September 2024, these regulations are the Local Government (Long Service Leave) Regulations 2024.
A separate legislative instrument for local government long service leave exists for 2 key reasons:
The new regulations were made by the government to improve the operation of the local government long service leave portability scheme and align more closely with reforms that have occurred to the Long Service Leave Act 1958 since 1977.
As per regulation 26, the functions of the local government under the regulations are to be performed by the local government chief executive officer (CEO), except in respect to the CEO’s own employment, where decisions of the employer are made by the council. This is consistent with the separation of employment functions set out in the Act.
Regulation 11 provides that each local government employee is entitled to 13 weeks of long service leave for every 10 years of reckonable service they complete with an employer. This regulation must be read in conjunction with the definition of employee and employer and regulations 7, 8, 9 and 10 which provide for what counts towards the period of reckonable service.
As an overview of these regulations:
reckonable service means a period of continuous employment with one or more employers, subject to regulations 8 and 9, which set out what is reckonable continuous employment and events which do not break the continuity of employment.
Regulation 8 sets out a series of events that count towards the 10 years of reckonable service in addition to attendance at work on an ordinary working day.
An employee is suspended from duty while an allegation of misconduct is investigated. This period of suspension counts towards their 10 years’ service.
Regulation 9 then deals with situations that do not break the continuity of overall employment but are not counted towards 10-year reckonable service. This means that the accrual pauses during this period and resumes when they return to reckonable service.
An employee has worked for the local government for 3 years as a gym trainer and their employment is terminated due to a lack of work, consequently leading to 3 months of unemployment. They are rehired 3 months later as work picks up again.
A period, not exceeding 2 months, between the termination of the employment by the employer on any ground other than slackness of trade and the re-employment of the employee by the same employer (if no pro rata payout is made).
An employee has worked for the local government for 3 years as a casual staff member and their employment is terminated by the local government. They are then reemployed by the same local government a month later.
An employee leaves City A for City B and has a 3-week break in between.
An employee who’s employed on a fixed-term contract as a project officer has their contract expire. After a break of a month, they were reemployed in a new role in the local government.
A carpentry apprentice for City A at the conclusion of their apprenticeship, and after a 3-month break, commenced as a carpenter for City B.
4.3. Transfer of business
Where a local government acquires a business in which employees are transferred to the local government, regulation 10 provides for regulation 7 (term used: reckonable service), regulation 8 (Periods included in continuous period of employment) and regulation 9 (periods not included in continuous period of employment, but taken not to break it) to apply as though the transferring business was one of the employers. This means that the prior service of those employees for the acquired business is included and becomes portable within the local government sector.
Where a local government privatises a business to an employer outside the local government sector that includes the transfer of employees, the transfer of those employees’ long service leave is dealt with in part II, division 3 of the Long Service Leave Act 1958.
Local governments engaged in a transfer of business process may wish to seek legal advice in relation to the transfer of long service leave.
The regulations set out what employers are to pay their employees whilst they take long service leave. In general terms, this would be the ordinary pay the employee would receive each week (see regulations 6, 14 and 15).
During a period of long service leave — other than casual loading applicable for casual employees — no other allowance, shift premium, penalty rate, or overtime applies. However, if a pay rise occurs while an employee is on long service leave, the regulations provide that the employer must pay the pay rise (see regulation 14(4)).
The ordinary pay an employee would receive on long service leave is calculated by the employee’s weekly number of hours of work multiplied by the employee’s ordinary rate of pay. For a full-time employee, this would be their normal full-time pay. However, for a part-time or casual employee, employers are required to pay the average weekly hours the employee worked throughout the accrual period, subject to the transitional calculation.
The regulations allow for situations where the employee and employer agree in writing for the employee to be paid the entire value of their long service leave in full before they start their period of leave (see regulation 14(3)).
A different method of calculating an employee’s entitlement as a part-time or casual employee has been introduced in the 2024 Regulations which differs from the 1977 Regulations.
As a result of this change, a transitional provision has been applied to ensure that no employee is left worse off. For employees that accrue long service leave under both the 2024 Regulations and the 1977 Regulations, those employees receive the best entitlement of both options. Consequently, for the first 10 years of the 2024 Regulations there will be 2 methods of calculating an employee’s entitlement.
An outline of the 2 methods is given below:
You can find other explanations of the operation of the transitional provision in the table below:
For the purposes of determining an employee’s average weekly hours as a part-time or casual employee, the word 'ascertainable' is used.
A definition of what constitutes ascertainable hours worked is included in regulation 6.
In practice, where a local government’s records may no longer be available due to general record disposal requirements and changing record keeping requirements, the regulations require the available records to be extrapolated to cover the entire period.
Regulation 12 provides for the taking of long service leave and directs that the employee is to take the leave and the employer must allow that leave to be taken as soon as practicable. This typically occurs through informal discussions between the employee and employer recognising the need to potentially backfill the employee’s role during their absence and for the employee to book whatever leisure plans they may wish during their period of leave.
Additionally, regulation 12 allows long service leave to be taken in one continuous period or 2 or more periods. These two or more periods may be as short or as long as the employer and employer agree. The sole purpose of this regulation is to enable flexible use of long service leave. For example, an employee may wish to use their 65 days off work to work 4-day work weeks on 65 occasions.
Regulation 12(3) provides a mechanism to resolve instances where the employee and employer cannot agree on when to take the leave. Once 12 months since the accrual date have passed, it provides that an employee may give 2 weeks written notice of the leave, after which point the long service leave is taken. For employers, they may provide 2 months written notice directing the employee to take the long service leave at which point they shall be on leave.
The regulations provide that where a period of long service leave falls on a public holiday, which the employee would have ordinarily worked, the employees leave is extended by a day. In other words, instead of needing to break up periods of long service leave to capture public holidays, an employee can now take long service leave without consideration needing to be given to those public holidays. An employee would be credited with an additional day of long service leave for each public holiday day that fell during their period of leave.
Regulation 13 provides that an employee may take advanced long service leave by agreement if they have completed 7 years of reckonable service. Employers and employees are under no obligation to agree to advance long service leave.
For the purposes of determining the rate of an employee’s long service leave, the period for the purposes of calculating the employees average weekly hours worked is the accrual period up until the day of the commencement of the advanced leave. For example, if the employee had worked 8 years and sought to take their long service leave in advance, the 8-year period would be used for determining the rate of leave instead of the normal 10-year accrual period.
Where an employee leaves the sector before they complete their overall 10-year accrual period, the amount of advance long service leave paid to the employee may be taken from their final payout. Reflecting the portability scheme, any amount must be paid back to other employers based upon the proportion they contributed towards the cost of the long service leave.
Regulations 16 and 17 allow for employees and employers to agree to the taking of long service leave at half pay or double pay. In these circumstances, either the ordinary rate of pay is halved for double the time of leave, or the amount of leave is halved for double the ordinary rate of pay.
Regulation 18 directs that employees are not to work during a period of long service leave without their employer’s agreement. This reflects the secondary employment requirements local governments should have in place as a risk control. Failure of the employee to comply with this may be dealt with by the employer in accordance with normal industrial processes.
The new regulations allow an employee to apply to their employer to cash out their long service leave instead of taking it (see regulation 19). The employer cannot initiate the cashing out of long service leave; it must only come from the employee.
The amount the employee is to be paid is the equivalent of what the employee would be paid if employee had taken that leave at the moment it is cashed out. An employee can only apply to cash out long service leave once the employee has accrued that leave after 10 years reckonable service.
While cashing out of long service leave may be an efficient solution to a local government’s leave liability, it is recommended that proper consideration be given such an application.
Benefits of an employee taking leave include:
CEOs may wish to establish procedures for deciding on cashing out of long service leave.
Regulation 20 deals with the situation where an employee has accrued a full entitlement of long service leave and decides to leave the local government prior to taking all, or part of, their long service leave. In this event, the employer is to pay out all the remaining long service leave as part of the employee’s termination payment.
Long service leave, once accrued, is not portable to another local government and must either be taken or paid out. In this circumstance, it does not matter if a future employer is in the local government sector, the accrued balance must be paid out.
For example, an employee has worked in the local government sector for 10 years and 3 months and decides to resign and take up new employment. That employee has not yet taken their long service leave. In this example, the employee is entitled to be paid out the accrued 13 weeks long service leave as part of the termination payment (in addition to any other leave which is paid out on termination).
Regulation 21 deals with the situation where, after completing at least 7 of 10 years of reckonable service, an employee’s employment in the local government sector ends (other than for serious and wilful misconduct). In this circumstance, the employee is entitled to be paid a pro rata amount for the long service leave they had accrued. However, where the employee remains in the local government sector and does not break their continuity, the long service leave accrual transfers to their new employer.
Regulation 21 also provides that when a dismissal is overturned by WAIRC due to it being harsh, oppressive, or unfair — and the employer has paid out for expected long service leave — the employee may repay the amount they were paid if the employee is reinstated. The employee’s accrual of long service leave would then resume at the point they were unfairly dismissed.
Where an employee is entitled to a payment under regulation 20 or 21 and passes away, the entitlement must be paid to the personal representative of the deceased (in addition to other entitlements).
The personal representative will be determined through the process used to deal with the deceased estate, which may be the executor or administrator of the deceased estate, or the deceased person’s next of kin.
The table below provides examples of various periods of service and the termination payment or transfer of accrual, if any, that must be made to the employee:
The employee is paid out their remaining entitlement of long service leave, being 6 weeks.
Note: in terms of a local government employer, the above table also applies to portability of long service between regional local governments (see section 3.61 of the Act) and WALGA.
Long service leave in the local government sector is portable between local government employers, regional local governments and WALGA.
For employees this means that the cumulative service across local governments, regional local governments and WALGA adds up to form 10 years of reckonable service. As previously provided in the 1977 Regulations, to facilitate this scheme, previous employers have a duty to contribute towards cost of long service leave to the final employer at the end of the accrual period.
To facilitate this scheme, the regulations require the employer to keep a series of records regarding their employees for 10 years following the end of the employee’s employment (see regulation 24).
A local government is already obliged to keep many of these records under the Industrial Relations Act 1979. This includes records of the hours worked by the employee each week to ascertain the average weekly hours for the overall entitlement. These records must be available to the employee or persons they authorise to act on their behalf, such as their trade union or legal representative. The records must also be available to any other employer of the employee, or a State Government industrial inspector appointed under the Industrial Relations Act 1979.
In relation to the record keeping and portability process, the regulations provide for an approved form that simplifies the process for sharing of employment records (see regulation 25).
This form provides the information the current employer needs to calculate the long service leave benefit and contribution payable by former employers. The regulations provide that when an employee informs their employer of their prior service, the employer is to contact the former employer and request they provide the information required by the form. This enables the final employer to rely on the form to calculate the long service leave benefit and entitlement.
When an employee is entitled to long service leave, a contribution needs to be made to the final employer by any former employers of the employee during the accrual period.
Regulation 23 sets out the below formula for the contribution to be made by a prior employer to the next employer:
C = (L x S x P) / TS
This formula is the same as was provided in the 1977 Regulations.
As an example of this formula, an employee worked for 2 local governments – City A and City B. Overall, the employee completed 8 years in local government, with 2 of those years at City A.
At the conclusion of the employee’s time at City A, the employee was paid $1500 a week. At the time of leaving City B, the employee was paid $3000 a week. In this example, based upon a salary of $3000 a week and a leave entitlement of 10.4 weeks, the employee is entitled to a pro rata payout for long service leave of $31,200 before tax.
(10.4 x 104 x $1500) / 417 = $3890.65
As a result, City A is liable to pay City B $3890.65 of the $31,200 for the long service leave benefit which was paid out on termination. Due to wage increases by promotion, increments and general salary rises, the benefit payable by the previous employer will often be smaller than that payable by the final employer.
The portability scheme operates differently when an employee is employed by 2 local governments at the same time. This can occur across many roles in local government where a resource is shared, or in some cases with casual employees working for multiple local governments.
Where an employee employed jointly by several employers, those employers, unless they otherwise agree, are to equally contribute using the formula (which is modified as necessary).
Regulation 5 provides that where the specific words 'by agreement' are used in the regulations, the matter in question can be dealt with in:
It is noted that this cannot be used where it would contravene section 114 of the Industrial Relations Act 1979. In other words, where a matter is provided for in the award or the agreement, it cannot be overridden by a contract of employment or other agreement.
The below table sets out what matters can be addressed by agreement:
Where in other parts of the regulations there is a reference to 'agree in writing', this is to be dealt with on an individual basis between the employee and the employer.
The regulations provide a base entitlement for long service leave across the local government sector. However, many local government employees are covered by specific industrial instruments such as contracts or industrial agreements, which may provide for improved long service leave entitlements.
In the first instance, employees should seek to resolve queries about entitlements, calculations, and pay outs with their relevant employer.
If an employee is unable to resolve their query with their employer, they may wish to consider the following options:
An industrial instrument, such as an industrial agreement, may contain applicable dispute resolution procedures. In addition, individual employees and unions may have options to resolve disputes regarding entitlements through mechanisms established under the Industrial Relations Act 1979. Further information is available on the WAIRC website.
Employers may wish to consider the following options:
The Department of Local Government, Sport and Cultural Industries cannot provide advice to:
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