Changes to legislation in Victoria is extending the application of the portable long service scheme in the community services sector.
What is “portable long service leave”?
A number of States and Territories have legislation that provides for “portable long service leave”, meaning that employees in certain sectors do not lose their accrued long service entitlements when they move from employer to employer in the same industry.
This was introduced to protect employees in industries where employees frequently move from employer to employer (and so might never be employed long enough to be entitled to take long service leave), even though their job might never really change. (Think of a cleaner in a shopping centre who keeps working there for several years, but whose employer keeps changing as the shopping centre changes cleaning contractors.)
How does this work in Victoria?
In Victoria, the industries that are covered by the Long Service Benefits Portability Act 2018 are the community service sector, the contract cleaning industry and the security industry.
If an employer falls within a covered industry, it must apply to the Portable Long Service Leave Authority for registration within 3 months of becoming covered by the portable long service leave scheme, and pay certain levies to the Authority (which funds employees’ future entitlement to long service leave). Given the scheme commenced on 1 July 2019, businesses employing relevant workers at that time in community services, contract cleaning and security industries were required to register by 30 September 2019.
Which community services businesses are covered by the portable long service scheme in Victoria?
The Victorian scheme initially covered prescribed community service sector employers including employers who were non-profit entities that employed one or more individuals to perform “community service work” was defined to include:
- social work, welfare work and youth work services;
- social and community development, education and advocacy;
- crisis counselling;
- assessment of individual or family needs;
- neighbourhood houses;
- family support services;
- youth services; and
- housing and homelessness services.
Since 1 January 2020, the scheme was extended to also cover:
- organisations funded by the National Disability Insurance Scheme (NDIS); and
- licensed children’s service organisations (except for entities that are schools).
Initially, employees in the health or aged care work, and employees whose role did not predominantly involve the personal performance of activities that were community service work, were not covered by the scheme. In other words, it was unlikely that administrative, marketing and other office-based staff in the community service sector were covered under the scheme. This has now changed.
What is changing?
On 1 October 2020, the Long Service Benefits Portability Regulations 2020 came into force and extend the reach of the scheme. The Regulations provide that:
- Health or aged care work is now included in the definition of community services work (meaning employers in these sectors must register under the scheme); engaged in health or aged care work may now be considered as part of the community service sector under the Scheme, which may enliven obligations on the employer to make long service contributions to the Authority.
- The exemption for employees working in the community services sector (but not performing community service activities personally) has also been removed. The effect of the Regulations is that any employee (including a casual employee) employed in the community sector will be now be covered by the scheme if they are covered by any one of the following awards (or an enterprise agreement underpinned by one of the awards):
- the Social, Community, Home Care and Disability Services Industry Award 2010;
- the Children’s Service Award 2010;
- the Educational Services (Teachers) Award 2020;
- the Labour Market Assistance Industry Award 2020;
- the Supported Employment Services Award 2020.
What should a business do if they are now covered by the scheme?
Businesses who were not previously registered with the Portable Long Service Leave Authority should register with the Authority and make appropriate levy payments for each of their employees in the community service sector.
Registration must occur by 1 January 2021 (being 3 months from the commencement of the Regulations) and thereafter commence quarterly reporting and payments.
If you require any assistance regarding this matter, please contact EI Legal.