Long Service Leave Bill 2017

Ms HUTCHINS (Minister for Industrial Relations) — I move:

That this bill be now read a second time.

Speech as follows, except for statement under section 85(5) of the Constitution Act 1975, incorporated into Hansard under standing orders:


This bill seeks the repeal of the current Long Service Leave Act, and its replacement with a new act that is fairer, more flexible, and better suited to the modern workplace. As with the current act, it will serve as the default long service leave legislation applying to Victorian workers, in both the private and public sectors, unless specifically excluded. Our new long service leave arrangements will better meet the needs of employers and workers. Our new long service leave act will be fairer for people whose working arrangements change over the lifetime of their employment, particularly working women who take a career break to care for their children.

Although Victoria referred most of its workplace relations powers to the commonwealth in 1996, the Victorian government retained responsibility for regulating and administering long service leave.

Long service leave has been a workplace benefit for many years. The concept is well understood and accepted by workers and employers alike. Only about one in four workers, however, will ever qualify for long service leave.

There is general recognition that a worker deserves a break after providing long and faithful service to their employer. While this may seem like a straightforward concept, the realities of the modern workplace mean that the application of our long service leave laws is often not as simple as it seems.

Review of the current act

Labor’s 2014 election platform committed us to reviewing the Long Service Leave Act. It had become increasingly apparent that the current Long Service Leave Act is not well placed to cope with the realities of the modern workplace.

A review of the act conducted by my department in 2016 confirmed that the act needed updating. Consultation with unions, and employer and industry groups such as the Victorian Chamber of Commerce and Industry, Australian Industry Group, Victorian Farmers Federation, the Victorian Transport Association, the National Retailers Association and the Victorian Automobile Chamber of Commerce, amongst others, highlighted shortcomings with the current act.

To aid the review, my department produced a discussion paper, which posed a number of questions for parties to consider. These questions dealt with the issues of flexibility, consistency, equity, clarity, and compliance.

Based on submissions from stakeholders and feedback from members of the public, a number of important reforms have been encapsulated in the bill now before the house. The bill has also been informed by my department’s long service leave employment information and compliance unit. The unit works with employers and employees to understand their rights and responsibilities.

Detail of the proposals

The bill proposes a number of improvements to long service leave arrangements. However, the rate that leave accrues will not change. Currently, leave accrues at one-sixtieth of the period of continuous employment. This government believes that the improvements are fair and will have benefits for both employers and employees.

We are making the rules governing how leave is to be taken more flexible and easier to understand. Employees, with the approval of their employer, will be able to take long service leave at a minimum of one day’s leave at a time.

We are simplifying the rules governing when leave can be taken. Employees will be able to apply to take long service leave after seven years service, on a pro rata basis. This brings the qualification for taking of leave into line with the payment of leave when employment ends. This will not increase employee entitlements or employers’ costs as the long service leave entitlement has already crystallised at seven years.

The bill clarifies the definition of ‘asset’ in a transfer of business situation to include intangible assets. We have modelled the transfer of business arrangements on section 311 of the commonwealth Fair Work Act 2009 for consistency and ease of understanding.

We will remove the ability of employers to seek an exemption from the application of the act. My department advises me that the last time an exemption was granted was in the 1970s.

Detail of the proposals

The bill increases penalties to be comparable with current Victorian standards. The two existing civil penalties will also be changed into criminal offences. I am advised by my department that a limited number of prosecutions are commenced each year. Most complaints for non-payment of entitlements, or a refusal to allow an employee to take leave are successfully settled with the department’s help before the need for court action.

Another change is to allow authorised departmental officers to require the production of records, when investigating alleged breaches. However, authorised officers will not have a right to enter premises.

The bill includes a new method of calculating leave where an employee’s hours of work are not fixed, so that the average of the hours worked will be calculated as the greater of the average over the last 12 months, five years, or the entire period that the employee has been continuously employed. This method of calculating entitlements is fairer for some employees, notably those that have taken leave or reduced their hours of work to look after their dependents.

Similarly, the bill also includes a new method of calculating leave where an employee’s hours of work have changed, so that hours worked will be calculated as the greater of the average over the last 12 months, five years, or the entire period of employment. The averaging will apply to where a change in hours has occurred in the 24 months prior to the long service leave being accessed. Again, this is fairer for the various scenarios that arise.

The bill provides an employee whose hours of work are about to change the right to request a statement from their employer outlining the old and new working arrangements. This statement would serve as evidence in any court proceeding. Employees often find it is difficult to pursue their entitlement because of a lack of adequate records, particularly where a business has been sold.

Consistent with our 2014 election commitment, the review of the current act has included an assessment of how the taking of parental leave (and other forms of leave) affects entitlements. The bill, like the current act, treats interruptions to service in different ways. Some forms of leave count as service, whilst other forms of leave, whilst not counting as service, will not break the continuity of service.

Currently, a period of unpaid parental leave up to 12 months does not break continuity of service but does not count as service. Any period of unpaid parental leave greater than 12 months will break continuity of service, even though under the Fair Work Act, employees are entitled to take up to two years unpaid parental leave. Therefore parental leave is treated less favourably than other forms of leave under the current act.

Under our proposed new act parental leave will be treated the same as other forms of leave. The bill provides that:

any period of paid leave will count as service (and will not break continuity of service);

any period of unpaid leave up to 12 months will count as service;

any period of unpaid leave greater than 12 months will not count as service, unless agreed otherwise, but will not break service; and

the employer and employee will be able to agree, at the time that leave commences, that a period of unpaid leave beyond 12 months will count as service.

These changes will:

remove the anomalous treatment of parental leave compared to other forms of leave under the LSL act;

be fairer for primary caregivers (who are usually women); and

be simpler overall to apply as it makes the treatment of leave generally consistent under the act.

Casual and seasonal employees will be able to take up to 24 months parental leave without breaking their continuity of service. The Fair Work Act allows casual and seasonal employees to take up to 24 months unpaid parental leave.

Why a new act?

On the advice of parliamentary counsel, and in the interests of having legislation that is easy to read and comprehend, it is best to start again and enact fresh legislation.


The benefits of the proposed reforms include:

more flexible approaches to the taking of long service leave that will benefit both employees and employers;

making it easier for employers and employees to understand their rights and obligations;

ensuring casual and seasonal employees with the requisite continuous service have access to the same benefits as other employees; and

support for employees to enjoy their rights to take parental leave without adversely affecting their long service leave eligibility or accrual.

I commend the bill to the house.

Debate adjourned on motion of Mr GUY (Leader of the Opposition).

Debate adjourned until Thursday, 7 September.

Ms HUTCHINS (Minister for Industrial Relations) tabled following statement in accordance with Charter of Human Rights and Responsibilities Act 2006:

In accordance with section 28 of the Charter of Human Rights and Responsibilities Act 2006 (the charter), I make this statement of compatibility with respect to the Long Service Leave Bill 2017.

In my opinion, the Long Service Leave Bill 2017, as introduced to the Legislative Assembly, is compatible with the human rights protected by the charter. I base my opinion on the reasons outlined in this statement.

Overview of the bill

The Long Service Leave Bill 2017 (bill) replaces the Long Service Leave Act 1992 and provides for the long service leave entitlements of certain employees, including public and private sector employees and police officers.

The bill sets out a basic entitlement to long service leave after seven years of continuous employment with one employer. It defines how periods of employment and pay rates are to be calculated and provides for a range of circumstances, such as taking leave in advance and after employment has ended.

The bill introduces provisions regarding authorised officers, who may require a person to produce information or documents in order for the authorised officer to perform functions under the new act, including determining compliance with the act. The bill also establishes a number of offences concerning payment in lieu of leave, adverse action and long service leave records.

Human rights issues

Right to privacy

Section 13(a) of the charter provides that a person has the right not to have his or her privacy, family, home or correspondence unlawfully or arbitrarily interfered with. The bill contains provisions that may give rise to interferences with the right to privacy, as set out below, but in my view any such interferences will be neither unlawful nor arbitrary and so are compatible with the right.

Part 3 of the bill provides for the enforcement of long service leave entitlements. Under clause 29, the secretary may appoint a person as an authorised officer for the purpose of performing a function under the act. Authorised officers are given information-gathering powers to enable them to fulfil this function. Clause 31 provides that an authorised officer may, by written notice, require a person to produce a document in the person’s custody or control or give any information that the authorised officer requires, within a reasonable period specified in the notice. The authorised officer may inspect, make copies of or take extracts from any document produced. Failing to comply is an offence, unless the person has a reasonable excuse. The person required to provide documents or information may be the employee, employer or a third party. The information may include personal information that attracts the right to privacy as protected under the charter.

These powers of information gathering are subject to important constraints. The bill contains strict confidentiality obligations, making it an offence for an authorised officer to directly or indirectly give to another person any information acquired, except to the extent necessary to perform a function under the new act. The authorised officer is subject to the secretary’s directions in the performance of his or her functions and may only request information for the purpose of determining whether there has been compliance with the act. As a further safeguard, the authorised officer must have an identity card and must produce it for inspection before exercising a power under the act and at any time during the exercise of a power if asked to do so. Another protection is the privilege against self-incrimination — preserved in clause 39 with a limited abrogation — which enables a person to refuse or fail to produce documents (other than documents required to be kept under the act) or provide information if doing so would tend to incriminate the person.

The ability to have access to relevant information and documentation is a crucial part of the authorised officer’s function to ensure compliance. In my view, while the exercise of these powers may interfere with the privacy of an individual in some cases, any such interference will be lawful and not arbitrary.

Property rights

Section 20 of the charter provides that a person must not be deprived of his or her property other than in accordance with law. This right requires that powers which authorise the deprivation of property are conferred by legislation or common law, are confined and structured rather than unclear, are accessible to the public, and are formulated precisely.

Where a document is produced in response to a request under clause 31, discussed above, an authorised officer may take extracts from the document. Clause 32 also gives authorised officers the power to retain such documents for a limited time in certain circumstances. These powers engage the right to property in section 20, but do not limit it. In addition to the safeguards mentioned above in the context of the right to privacy, further limitations on the power apply. Documents may only be retained for the period necessary to perform a function under the act, and must be made accessible to the person otherwise entitled to possession to inspect, make copies of or take extracts from it.

In my view, the specific and confined circumstances in which an authorised officer can retain documents means that any interference with property occasioned by the bill is in accordance with law and therefore compatible with the charter.

Right to presumption of innocence

Section 25(1) of the charter provides that a person charged with a criminal offence has the right to be presumed innocent until proved guilty according to law. The right in section 25(1) is relevant where a statutory provision shifts the burden of proof onto an accused in a criminal proceeding, so that the accused is required to prove matters to establish, or raise evidence to suggest, that he or she is not guilty of an offence. For the reasons set out below, the bill is compatible with the right to the presumption of innocence.

Prosecutions of offences under the act

Clause 10 of the bill provides that if an employee dies before taking all the long service leave to which the employee is entitled, the employer must pay the amount still owed to the employee’s personal representative. Failing to do so is an offence. If, in the course of a prosecution for this offence, the employer alleges that the length of the period of the employee’s continuous employment with the employer is wrong in the charge sheet, the employer bears the onus of proving the allegation. While this operates to impose an evidential burden on the defendant employer by requiring the employer to produce evidence to establish the accuracy of the employee’s length of service, in my view it does not limit the right to be presumed innocent. The employer is under an obligation to keep detailed records of its employees’ service and their long service leave entitlements, and is therefore in a unique position to provide this evidence. An employee’s personal representative does not have access to this information. Further, once the correct length of service is established, it will still be a matter for the prosecution to demonstrate commission of the offence. To the extent that an evidential onus may nevertheless be considered to amount to a limit, any such limitation is reasonable and justified.

Under clause 36, it is an offence for an employer to take adverse action against an employee because the employee is entitled to long service leave, seeks to exercise his or her entitlement to long service leave, makes an enquiry as to his or her entitlement to long service leave or applies to the Magistrates Court for an order in relation to a direction to take long service leave. This reflects section 340 of the Fair Work Act 2009 (cth) (Fair Work Act), which prohibits a person from taking adverse action against another person because the other person has a workplace right, exercises a workplace right or proposes to exercise a workplace right.

In a proceeding for an alleged contravention of clause 36, the employer bears the onus of proving that the adverse action taken against an employee was not actuated by any of the four reasons above. This reflects the rebuttable presumption in section 361 of the Fair Work Act, which states that where an application is made alleging that a person took adverse action for a particular reason or with a particular intent, it is presumed that the action was taken for that reason or with that intent unless the person proves otherwise. This reversal of the onus of proof is a longstanding feature of the freedom of association and unlawful termination protections in the fair work regime and recognises that, in the absence of such a clause, it would often be extremely difficult, if not impossible, for a complainant to establish that a person acted for an unlawful reason. It is appropriate for the employer to bear the burden of proof in these circumstances because it relates to evidence which will be peculiarly within their knowledge.

‘Reasonable excuse’ exceptions

Two provisions in the bill create offences that contain a ‘reasonable excuse’ exception, which may be seen to place an evidential burden on the accused.

Under clause 37 of the bill, it is an offence for a person to make, without reasonable excuse, a false or misleading statement in, or material omission from, a long service leave record. A long service leave record includes any register, certificate, pay sheet or other document relating to an employee’s long service leave entitlement. Clause 38 of the bill makes it an offence for a person to fail to comply with a notice to produce or provide information without reasonable excuse.

By creating a ‘reasonable excuse’ exception, the offences in clauses 37 and 38 of the bill may be viewed as placing an evidential burden on the accused, in that they require the accused to raise evidence as to a reasonable excuse. However, in doing so, these offences do not transfer the legal burden of proof. Once the accused has pointed to evidence of a reasonable excuse, which will ordinarily be peculiarly within their knowledge, the burden shifts back to the prosecution who must prove the essential elements of the offence. I do not consider that an evidential onus such as that contained in these provisions limits the right to be presumed innocent, and courts in other jurisdictions have taken this approach.

For these reasons, in my opinion, clauses 37 and 38 do not limit the right to be presumed innocent.

Deemed criminal liability for officers of bodies corporate

Clause 43 provides that if a body corporate commits an offence against certain provisions, including clauses 10, 36, 37 and 38 referred to above, an officer of the body corporate also commits that offence if the officer authorised or permitted the commission of the offence, or was knowingly concerned in any way (by act or omission) in the commission of the offence. This is relevant to the presumption of innocence as the provision may operate to deem as ‘fact’ that an individual has committed an offence for the actions of the body corporate. Under clause 43, officers may rely on a defence that would be available to the body corporate if it were charged with the offence and bears the same burden of proof as the body corporate in doing so.

As discussed above, some of these offences contain reverse onus provisions. In my view, it is appropriate to extend these offences and reverse onus provisions to officers of bodies corporate. A person who elects to undertake a position as officer of a body corporate accepts that they will be subject to certain requirements and duties in relation to employees, including a duty to ensure that the body corporate does not commit offences. In my view, clause 43 does not limit the right to the presumption of innocence as the prosecution is still required to prove the main elements of the offence — that is, that the officer authorised or was knowingly concerned in the commission of the offence. Courts in other jurisdictions have held that protections on the presumption of innocence may be subject to limits particularly in the context of compliance offences. Further, any limits imposed by the relevant reverse onus provisions are justifiable for the reasons set out in relation to those provisions above. Accordingly, I am satisfied that this provision is compatible with the charter’s right to the presumption of innocence.

Right to protection against self-incrimination

Section 25(2)(k) of the charter provides that a person charged with a criminal offence is entitled not to be compelled to testify against himself or herself or to confess guilt. This right applies to protect a charged person against the admission in subsequent criminal proceedings of incriminatory material obtained under compulsion.

This right is relevant to clause 39 of the bill, which provides that it is a reasonable excuse for a natural person to refuse or fail to give information or documents if doing so would tend to incriminate the person. However, clause 39(2) specifies that this protection does not extend to the production of records or documents that the person is required to keep under clause 37 of the bill. The combined effect of clauses 37 and 39 therefore results in a limit on the right to protection against self-incrimination.

The privilege against self-incrimination generally covers the compulsion of documents or things which might incriminate a person. However, the application of the privilege to pre-existing documents is considerably weaker than that accorded to documents that are required to be brought into existence to comply with a request for information (and considerably weaker than that accorded to oral testimony).

The primary purpose of the abrogation of the privilege in relation to certain documents is to facilitate compliance with the long service leave scheme by assisting authorised officers to access information and evidence that is difficult or impossible to ascertain by alternative evidentiary means. Any limitation on the right in section 25(2)(k) that is occasioned by the limited abrogation of the privilege in respect of produced documents is directly related to this purpose. Importantly, the requirement to produce a document to an authorised officer does not extend to having to explain or account for the information contained in that document. If such an explanation would tend to incriminate, the privilege would still be available.

Furthermore, there are no less restrictive means available to achieve the purpose of enabling authorised officers to have access to relevant documents. To excuse the production of such documents where a contravention is suspected would allow persons to circumvent the record-keeping obligations in the bill and significantly impede authorised officers’ ability to investigate and enforce compliance with the scheme. Any limitation on the right against self-incrimination is therefore appropriately tailored and the least restrictive means to achieve the purpose.

For the above reasons, I consider that to the extent that clause 39 may impose a limitation on the right against self-incrimination, that limitation is reasonable and justified under s 7(2) of the charter.

The Hon. Natalie Hutchins, MP
Minister for Industrial Relations