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Are employees who work overseas entitled to Long Service Leave?

Jewlia Holt
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The recent case of Infosys Technologies Limited v State of Victoria [2021] VSCA 219 finally provides clarity for Victorian employers with employees, who have spent time working overseas, when seeking their entitlement to Long Service Leave (LSL).

In this case, two employees worked in India for over 7 years at Infosys, before being sent to work in Victoria. The employees worked in Victoria for approximately 2 years before resigning and claiming entitlement to LSL for the whole period they worked for Infosys.

The Court held the employees were not entitled to LSL for the reasons set out below:

  • As the Long Service Leave Act 2018 (Vic) (LSL Act) does not have an express provision stating if its provisions apply to Victoria, the Court turned to s 48(b) of the Interpretation of Legislation Act 1984 (Vic) (ILA) to see if it had extraterritorial application.
  • When s 6 of the LSL was read in light of s 48(b) of the ILA, there was no requirement that all of an employee’s service must be completed in Victoria, rather the continuous employment must be ‘in and of’ Victoria.
  • The Court found the meaning of ‘in and of Victoria’ meant continuous employment with one employer requiring a close identification between the continuous employment and the state of Victoria. Instances of close connection may be instances such as a secondment.
  • The employee’s employment in India lacked a sufficient connection with Victoria. As a result, the employees did not meet the continuous service threshold under s 6 of the LSL Act as they could not show seven years of continuous employment in Victoria, or for a Victorian company.

Whilst this decision has provided clarity for Victoria, other States and territories across Australia remain somewhat unclear and may be influenced by this decision.

The current status of the LSL application across the Australian States and Territories

NSW  Long Service Leave Act 1955 The current stance in NSW is demonstrated in International Computers (Australia) Pty Ltd v Weaving (1981).

In this case, the Court held it is not necessary that all services be substantially connected with NSW. However, at the time the employee wishes to take or be paid out their entitlement to long service leave their employment must be connected to NSW for them to be entitled to it.

WA Long Service Leave Act 1958 The current stance in WA on the entitlement to LSL is based on the decision of appeal in Baker Hughes Australia Pty Ltd v Venier [2016] WAIRC 00210.

The Court found continuous employment can only be demonstrated if the employment is within the meaning of “one and same employer”, which excludes entities or related entities.

Overseas service will not be counted as continuous service unless there is an express term in the employee’s employment contract which states the service with a related body corporate should be applied.

SA Long Service Leave Act 1987  Although there is no leading case law in SA, the LSL Act in SA contains a provision (section 4) explaining the territorial application of the Act, which is absent across all of the other State and Territories LSL Acts.

It is clear on the provision of s 4 an employee will only be entitled to LSL if their service is in SA, outside of SA where the worker is predominately employed in SA, or their service is outside SA in pursuance of a contract of employment of which SA law in the proper law.

On the basis of section 4(c) of the LSL Act (SA), overseas employment is likely to only apply to the extent the employee’s employment contract has a provision which states South Australian law applies.

QLD Industrial Relations Act 2016

 

 

Whilst there is no leading case law in QLD, the Industrial Relations Act 2016 seeks to suggest where an employer has a place of employment in QLD and seeks to engage an employee to perform their work outside of QLD, the service will count towards continuous service.

On the basis of the interpretation of the Industrial Relations Act, an employee’s overseas service may only count if their employment began in QLD and the employer has directed the employee to work outside of QLD.

ACT Long Service Leave Act 1976  Although there is no leading case law in the ACT, the interpretation of s 11 of the LSL Act may suggest overseas service will apply if the employment is with an associated company.

However, in the absence of any express territorial provision in the Act, it is unclear if the associated company can be located overseas and counted for the purposes of LSL.

On the basis of no express territorial provision, a court seeking to interpret the territorial effect may, similar to the Victorian approach, utilise their interpretation of the legislation act to consider its territorial application.

TAS Long Service Leave Act 1976 In Tasmania, there has been no leading case law that clarifies if overseas service should be counted for the purposes of Long Service Leave.

The issue in the Tasmanian LSL Act is similar to the Victorian LSL Act as it has no express territorial provision. On this basis, a Tasmanian court may find it useful to apply a similar approach to the Victorian Supreme Court and turn to their interpretation of the legislation act to assist with considering if overseas service counts.

If they apply a similar interpretive exercise it may result in a similar outcome, being it would only apply to periods of service within Tasmania.

What do employers need to do to comply?

  • Review your applicable State LSL legislation to determine if any periods of employment at related companies outside Australia are counted as “continuous service” for the purposes of LSL entitlements.
  • Ensure your long service leave policies and employment contracts state the application of LSL in accordance with the applicable LSL Act if you have overseas entities.
Jewlia Holt
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