Service for the purposes of long service leave means continuous service with the same employer or with related employers under a contract of service or a series of contracts of service.

Where a business transfers to another employer (owner) and a worker continues to be employed by the new employer, the worker’s service will not be broken and is deemed continuous.

A business is considered to be related if:

  • the business (or part of the business) is sold to, or acquired by, another business, or
  • they are related corporations, or
  • a series of relationships can be traced between them under either of the above points.

It is the new employer’s responsibility to negotiate with the outgoing employer regarding any long service leave liability of a worker.

A business cannot terminate or ask workers to resign their position with one business and re-employ them in the new business in order to avoid the business’ long service leave obligations.

Example

Arno has been working for Slicks Stationary Company (SSC) Pty Ltd for 9 years. SSC is a subsidiary of the multinational company Trans-Global. Grand Office Supplies Ltd is also a subsidiary of Trans-Global, which has decided to bring all SSC outlets in Australia under the Grand Office Supplies business and get rid of SSC in Australia. Arno’s employment continues unchanged when Grand Office Supplies takes over SSC.

Arno had been looking forward to taking long service leave next year when he reached 10 years’ service with SSC, and he is concerned that his period of service will have to start again now that the business has been taken over by Grand Office Supplies.

As Arno’s employment has continued with Grand Office Supplies, he will become entitled to take long service leave next year as his previous service with SSC counts towards his service with Grand Office Supplies as the corporations are related for the purposes of the Corporations Act 2001 (Cth).

Example

Elsa works for Romeo’s Party Favourites (RPF) as an entertainer at special events and children’s parties. Elsa has worked for RPF for 8 years when Romeo announces that he has sold the business to Juliet’s Party Tricks. Romeo confirms that the business will be re-branded as Juliet’s Party Tricks, however Elsa will not be losing her job and will continue to be employed by Juliet on the same basis as she was employed by Romeo.

Elsa continues to work for Juliet’s Party Tricks for 2 years.

Romeo and Juliet are related employers for the purpose of Elsa’s long service leave entitlements because Juliet acquired Romeo’s business. Elsa’s previous 8 years with RPF will count towards her service with Juliet’s Party Tricks, and therefore Elsa is entitled to take long service leave as she has reached 10 years’ continuous service.


Questions about your long service leave?

If you have read all of the long service leave information on our website and you still have questions or concerns about your entitlements, please complete our long service leave form and we will get back to you.

Page last updated: 22 April 2022