Leanne is employed in IT for an accounting company, Accounting Co Ltd.Īccounting Co decides to outsource its IT work to IT Contractors Pty Ltd.

In these circumstances an employee will be taken to have worked for one employer for the purposes of accruing LSL. Where work is contracted in and out over a period the same rule applies. In this circumstance a host employer must recognise continuous employment with the previously contracted employer. This rule also applies if work is insourced. If an employer (host employer) outsources work to another employer, such as an agency, and as a result of a contract between the two, an employee moves from the host employer to the contracted employer, the contracted employer must recognise the employee’s continuous employment with the host employer. If an employee does not remain with a business that has changed hands, the employer who sold the business is responsible for calculating and paying out any LSL entitlements to which the employee has become entitled. If an employee is dismissed by the old or new business owner but is re-employed by the new business owner within 12 weeks’, employment will remain continuous for LSL purposes. It is important to note that, where an employee will continue with the new owner of the business, the old employer should not pay out accrued LSL to the employee.Īlthough it is common for employees to be paid out any accrued annual leave at the time of a sale of a business, this does not break continuous employment for LSL purposes under the LSL Act 2018. It is common for the sale of business documents to reflect this liability – but such documents could not validly exclude an employee’s entitlement.Įven if the contract for the sale of business does not include contingencies to cover a transferring employee’s LSL, or even if the documents expressly say the new employer is not liable, the employee still has an entitlement with the new owner under the LSL Act 2018. The period of employment with the old employer transfers to the new employer, who becomes liable for the LSL accrued across the entire period of employment.

Where a business is sold, transferred or assigned, and an employee remains with the business, the new employer becomes responsible for the employee's LSL entitlement. Victoria's Long Service Leave Act 2018 (LSL Act 2018) sets out several situations where an employee is regarded as having been employed by one employer – even though in the strict legal sense they've worked for more than one employer.įor the purposes of calculating long service leave (LSL), we've listed the different scenarios below that are considered as 'one employer'. Please see Comprehensive Guide to the Victorian Long Service Leave Act 2018. Comprehensive Guide to the Victorian Long Service Leave Act 2018

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