Northern Territory legislation reignites “portable” long service leave debate in ECEC

The Northern Territory has become the latest Government to seek feedback on new Legislation designed to change the way long service leave entitlements in the community services sector, which includes early childhood education and care, are recognised and managed.

 

At the moment, the Long Service Leave Act 1981 covers employees within the community services sector in which employees qualify for thirteen weeks of long service leave after completing ten years of service with the same employer.

 

The Territory is seeking to change the criteria by which long service leave becomes entitled away from it being received after ten years working with the same employer to it being received after ten years working in the sector, regardless of employer. 

 

This essentially means that long service leave entitlements will become portable ie: move with the employee from employer to employer. 

 

Advocates of the move highlight that the community sector is dominated by term, contract and casual workers who have historically not been able to secure long service leave due to their short term tenures and that making long service leave portable enables these workers to enjoy the same benefit their full time peers may receive. 

 

In addition, policymakers hope the additional benefit would support attraction and retention objectives in a sector suffering from workforce shortages. 

 

However, a growing chorus of employers are questioning the appropriateness of this type of framework in a sector where the vast majority of employees are already on full time contracts and whether the additional cost burden the new scheme would require, a 2.05 per cent levy, is proportionate. 

 

Notably, similar schemes currently operating in Victoria and the ACT have yet to meet expectations with Victoria in its first two years having collected $205 million in levies but only paying out $2.2 million in employees and costing a substantial $7.7 million to run. 

 

With regards the ACT, their Portable Long Service Leave community sector scheme which has been in operation for twelve years, has collected $86.6 million in levies from employers and paid out just $23 million in benefits to employees.

 

Other states have sidestepped the issue by excluding ECEC and only focusing on sectors where term employment is a dominant issue. This includes Queensland currently and potentially South Australia whose draft Bill excludes ECEC. New South Wales is also consulting on the issue and has been explicit on solving for term contract related concerns. 

 

The Northern Territory Office of the Commissioner for Public Employment is seeking feedback on the proposed timing for implementation of the scheme and additional issues that may need to be addressed.