Employer Refunds for Direct Payments to Workers

Section 4A(4) of the LSL Act, excludes workers from the operation of that Act who have a separate entitlement that is ‘at least equivalent’ to the LSL Act as below:

“4A. Employees with equivalent separate LSL entitlements

(4)  This Act does not apply to an employee who has a separate LSL entitlement to take long service leave and to be paid on termination instead of long service leave that is at least equivalent to the entitlement to WA LSL to take long service leave and to be paid on termination instead of long service leave.”

Under the LSL Act, entitlement includes an eligibility to become entitled to long service leave or payment on termination.

Entitlements under the Construction Industry Portable Paid Long Service Leave Act 1985 WA (CLSL Act) are separate to the LSL Act and in MyLeave’s view are ‘at least equivalent’ to entitlements under the LSL Act, which means that the LSL Act does not apply to registered workers in eligible job roles.

Unless an industrial instrument or another Act applies, all long service leave claims for workers registered with MyLeave who have reached an entitlement (i.e. more than 1,540 days of service, equivalent to 7 years of service) under the CLSL Act must be lodged through MyLeave.

This means that employers who make direct payments to registered workers in eligible job roles cannot be reimbursed by MyLeave in those circumstances.

Further guidance or assistance with the provisions of the Long Service Leave Act 1958 is available through WageLine on 1300 655 266, or website at wa.gov.au/organisation/private-sector-labour-relations/long-service-leave-western-australia.

There are limited circumstances in which an employer may be entitled to a refund for long service leave paid directly to workers under section 51 of the CLSL Act which provides:

“51. Employee accumulating continuous service in more than one capacity

1. Where a person becomes entitled to paid long service leave under another Act or under an industrial instrument and a portion of that service is service in respect of which the employer has made contributions under this Act in respect of that person the employer is entitled to recover from the Board an amount that is proportionate to the ordinary pay that would have been payable to that person under this Act had that person continued to be employed by the employer as an employee at the time that he became entitled to long service leave.”

Section 51 of the CLSL Act applies only when a worker “becomes entitled to paid long service leave under another Act or under an industrial instrument”, not under the CLSL Act itself.

Whilst a worker is entitled to long service leave under the CLSL Act, the worker cannot also be entitled under the LSL Act due to the exclusion provision in section 4A(4) of the LSL Act. The LSL Act does not apply to:

• workers registered with MyLeave in eligible job roles, or
• workers who have reached an entitlement through MyLeave (i.e. more than 1,540 days of service, equivalent to 7 years of service).

Eligible Job Role

An eligible job role applies to workers that:

• are working on a site in the construction industry as defined in the CLSL Act; and
• are employed under a contract of service in a classification of work referred to in a prescribed industrial instrument, or is an apprentice/trainee.

Workers in administrative, clerical, or managerial roles, or those working off-site (e.g., in workshops or yards), are not eligible job roles.

Circumstances Where Refunds May Apply

Notwithstanding the above, employers may be entitled to a proportional refund amount equivalent to the ordinary pay that would have been payable under the CLSL Act in the following circumstances.

1.  Entitlement Under LSL Act

Employers are eligible for a refund of long service leave paid directly to a worker under the LSL Act if all of the following conditions are met:

• The worker accrued service while registered with MyLeave; and
• The worker has either been deregistered from MyLeave, or if an eligible worker transfers to a non-eligible role with the same employer, before becoming entitled to long service leave under the CLSL Act (after 1,540 days of service, equivalent to 7 years of service); and
• The worker later becomes entitled to long service leave under the LSL Act (after 10 years continuous service or after 7 years on termination of employment).

Example

Paul was employed for 5 years by ABC Construction as an eligible worker registered with MyLeave. If Paul then changes to an ineligible job role under the CLSL Act (such as office manager) with ABC Construction, then:

(a)   Paul would be entitled to LSL under the LSL Act after 10 years continuous service (or after 7 years on termination of employment); and

(b)   ABC Construction would be entitled to recover a proportional amount from MyLeave, in respect of contributions made while Paul was an eligible worker. This amount would reflect the proportion of ordinary pay that would have been payable to Paul under the CLSL Act.
 

2. Entitlement Under an Industrial Instrument or Another Act

The obligation on the employer to directly pay a registered worker long service leave comes from an industrial instrument (like an award or enterprise agreement) or another Act.

Section 3 (1) of the CLSL Act defines an industrial instrument as:

“3. Terms used

(1) In this Act —

industrial instrument means —

(a)  an award, industrial agreement or order made under the Industrial Relations Act 1979; or

(b)  an award, determination, enterprise agreement or order made under the Fair Work Act 2009 (Commonwealth); or

(c)  an award, determination or agreement given continuing effect under the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Commonwealth),

irrespective of whether or not the instrument has, since it was made or given continuing effect, ceased to be in force;”

Where a refund is applicable in the above circumstances, the employer is entitled to a proportional amount equivalent to the ordinary pay that would have been payable under the CLSL Act.

Q1.    Can employers claim a refund from MyLeave for long service leave paid directly to workers?

Generally, no. Employers who make direct payments to registered workers cannot be reimbursed by MyLeave, except in limited circumstances.

Q2.    What are the limited circumstances where refunds are available?

Refunds may be available if:

• The worker has been deregistered from MyLeave or if an eligible worker transitions to a non-eligible role with the same employer, before becoming entitled to long service leave under the CLSL Act and later becomes entitled to long service leave under the Long Service Leave Act 1958 (LSL Act).
• The obligation on the employer to directly pay a registered worker long service leave comes from an industrial instrument (like an award or enterprise agreement) or another Act.

The employer may claim a proportional refund from MyLeave for contributions made during the worker’s eligible registered period.

Q3.    When must long service leave claims be lodged through MyLeave?

All claims for registered workers who have reached an entitlement under the Construction Industry Portable Paid Long Service Leave Act 1985 (WA) (CLSL Act) (after 1,540 days or 7 years of service) must be lodged through MyLeave.

Q4.    Why doesn’t the Long Service Leave Act 1958 apply to registered workers in eligible job roles?

Section 4A(4) of the LSL Act excludes employees who have a separate entitlement that is at least equivalent to the LSL Act. MyLeave considers CLSL Act entitlements to be equivalent, so the LSL Act does not apply to registered workers in eligible roles.

Whilst a worker is entitled to long service leave under the CLSL Act, the worker cannot also be entitled under the LSL Act.

Q5.    What is an eligible job role under the CLSL Act?

Roles that:

• Involve work on a site in the construction industry as defined in the CLSL Act, and
• Are covered by a prescribed industrial instrument or are apprentices/trainees.

Administrative, clerical, managerial, or off-site roles are not eligible.

Q6.    What qualifies as an “industrial instrument” for refund eligibility?

An industrial instrument includes:

• Awards or agreements under the Industrial Relations Act 1979,
• Enterprise agreements or orders under the Fair Work Act 2009,
• Instruments continued under the Fair Work Transitional Provisions Act 2009.

Q7.    How is the refund amount calculated?

The refund is proportional to the ordinary pay that would have been payable under the CLSL Act, based on the service period for which contributions were made.

Q8.    Where can employers get further guidance on the provisions of the Long Service Leave Act 1958?

Employers can contact WageLine at 1300 655 266 or visit the WA Government Long Service Leave page at wa.gov.au/organisation/private-sector-labour-relations/long-service-leave-western-australia.

The above detail is for information purposes only. The information does not constitute legal advice and should not be relied upon as legal advice. You should seek your own independent legal advice based on your particular circumstances before taking any action based on the information set out above.