Managing Employee Long Service Leave For Working Holidays

Are you an employer with staff considering a year-long working holiday overseas? Here’s what you need to know about managing their Long Service Leave (LSL) entitlement according to Industrial Relations NSW.

RESIGNATION AND RE-EMPLOYMENT

When an employee resigns before embarking on their working holiday, it’s important to understand that their continuity of service will be broken. This means their previously accrued LSL will be lost, and if they return and are re-employed at a later date, their LSL accrual will restart from scratch. It's essential to communicate this clearly to employees to avoid any misunderstandings or false expectations regarding their LSL.

LEAVE WITHOUT PAY AGREEMENT

Alternatively, if you agree to an arrangement where the employee takes a year off on leave without pay with a fixed return date, the continuity of their service will remain intact. However, the period they are away will not count towards their LSL accrual. This arrangement benefits both parties by preserving the employee’s accrued LSL while allowing them the flexibility to take an extended break. Ensure that this agreement is well-documented and that both you and the employee keep a copy of the record. This documentation will serve as a reference and provide clarity on the terms agreed upon, thereby avoiding potential disputes in the future.

CONSIDERATIONS FOR OVERSEAS EMPLOYMENT

Before an employee starts their overseas employment, it is advisable for them to thoroughly review their employment contract and your company’s policies. This review should focus on understanding any potential impacts on their Australian employment status, including LSL entitlement. It’s also beneficial to discuss and clarify these points with the employee to ensure mutual understanding and agreement. Additionally, consider any legal or regulatory implications that might arise from the employee working overseas, as these could affect their employment terms and conditions back in Australia.