Wednesday, 23 March 2011

Can my Boss Sack me to avoid paying Long Service Leave?

Q: I am an accountant in South Australia, and I'm 6 weeks away from being at my work for 7 years. My boss has only just started complaining about my output to me and hinting that my future there may be short. I'm worried that he may be building up a case to sack me before I reach my 7 years, and my entitlement to pro-rata long service leave. Is that legal?

A: The short answer is that the strategy described above would not work in South Australia.


Relevant references are:
  • Long Service Leave Act (SA) - "LSLA";
  • SafeWork SA - administer the Long Service Leave Act;
  • Fair Work Australia;
  • Fair Work Ombudsman.

Accountants are not covered by an award in South Australia, so you are subject to the terms in legislation. I assume that you have been treated as a 'permanent' employee.

Roughly speaking, an employee becomes entitled to paid Long Service Leave after 10 years of service to one employer at a rate of 1.3 weeks for each completed year of service. After 7 years' service however (but before they reach 10 years' service), a worker is entitled upon termination to be paid 1.3 weeks' salary  for each completed year of service.

Terminating an employee to avoid a Long Service Leave entitlement will not affect the entitlement. (LSLA s6(1)(b)). SafeWork SA administers the LSLA, and you can complain to them if your long service leave or pro-rata payment is denied because of termination.

Furthermore, it's arguable that unless there was serious or wilful misconduct on your part, your termination would constitute an unfair dismissal. You can make 1 of 2 different applications to Fair Work Australia:
  1. An Unfair Dismissals Application, or
  2. A General Protection Dismissals Application, to protect rights (such as long service leave) that are affected by your dismissal.
If your employer is a 'small business', the Small Business Dismissal Code applies. This introduces requirements such as giving you opportunity to rectify 'mistakes' you have been sacked for, or to include a support person in dispute resolution.

Your employer may pressure you to leave rather than sack you. Threats and 'performance management' may constitute mistreatment and bullying. You can apply to the Fair Work Ombudsman to investigate your work environment.

Although they have similar names, Fair Work Australia and the Fair Work Ombudsman have different functions. In short, for your situation, talk to Fair Work Australia about your dismissal (if it happens), and talk to the Fair Work Ombudsman regarding any complaints about your treatment at work.

Flippantly speaking, your employer has left it far too late. You really only have 2 weeks left to worry, as a 'reasonable' 4 week notice of termination would count towards your service period.

Hang in there.

(Other readers, please note that this advice has been edited for publication and may not fit your circumstances. Please seek independent advice.)

PostScript: as it turns out, the employee resigned soon after, and the employer did the right thing.

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