Understanding long service leave across Australia: A guide for ECEC providers

Long service leave (LSL) is one of Australia's oldest employment entitlements, yet it remains one of the most misunderstood, particularly within the early childhood education and care (ECEC) sector.

For approved providers, nominated supervisors and service leaders, understanding long service leave extends well beyond payroll. It is a compliance obligation, a workforce planning consideration and an important part of supporting and retaining experienced educators.

Unlike annual leave and personal leave, long service leave is not subject to a single national entitlement. Instead, eligibility is largely determined by state and territory legislation, with some employees covered by pre-modern industrial instruments or enterprise agreements.

As Australia's ECEC workforce becomes increasingly mobile, understanding these differences has become more important than ever.

Although the Fair Work Act 2009 recognises long service leave as a workplace entitlement, the rules governing eligibility are primarily determined by state and territory legislation.

These laws establish how long an employee must work before becoming entitled to leave, how leave accrues, when pro-rata payments may apply, how continuity of service is assessed, and how business transfers are treated. Some jurisdictions also operate portable long service leave schemes for particular industries.

As a result, providers cannot assume that long service leave operates consistently across Australia. Two educators performing similar roles may have different entitlements depending on where they work, the legislation that applies and the circumstances in which their employment ends.

One of the most significant differences between jurisdictions is the qualifying period required before long service leave becomes available.

In New South Wales, employees generally become entitled to two months (8.67 weeks) of paid long service leave after completing 10 years of continuous service, with an additional month (4.33 weeks) accruing after every further five years.

Victoria and the Australian Capital Territory provide full long service leave entitlements after seven years of continuous service.

Queensland, South Australia, Western Australia, Tasmania and the Northern Territory generally provide full long service leave after 10 years. However, employees in these jurisdictions may become entitled to a pro-rata payment after seven years, depending on the relevant legislation and the circumstances in which their employment ends.

These differences highlight why providers operating across multiple jurisdictions should ensure the correct legislation is applied to each employee.

In New South Wales, one of the most commonly misunderstood aspects of long service leave is access to pro-rata entitlements.

Employees who leave between five and 10 years of continuous service are not automatically entitled to receive a pro-rata payment.

Instead, the entitlement only arises where employment ends because of:

• illness or incapacity
• domestic or other pressing necessity
• termination by the employer for reasons other than serious and wilful misconduct
• death.

This distinction is important for providers when assessing employee entitlements at the end of employment.

The legislation may also preserve continuity of service in certain circumstances, including some business transfers, changes in ownership and corporate restructures where the legislative requirements are satisfied.

Maintaining accurate employment records and documenting the reasons employment ends are essential to ensuring long service leave is administered correctly.

Another common misconception is that casual educators are not entitled to long service leave.

In reality, casual employees may qualify in most Australian jurisdictions where their employment has been regular, systematic and recognised as continuous under the relevant legislation.

Given the significant proportion of casual educators employed across the ECEC sector, providers should ensure payroll systems accurately record eligible service and correctly calculate long service leave liabilities.

Some Australian jurisdictions also operate portable long service leave schemes for specific industries, including community services.

Whether an organisation is covered depends on the applicable legislation and the nature of the work performed. Providers delivering community-service-related programs or operating across multiple sectors should confirm whether a portable scheme applies to their organisation.

Long service leave should not be viewed solely as an employment entitlement to be calculated when an employee resigns.

For ECEC providers, it also has important implications for workforce planning, financial management and service continuity.

Planning ahead for upcoming long service leave allows providers to budget for staffing costs, recruit replacement educators where required, maintain educator-to-child ratios and minimise disruption for children and families.

Regularly reviewing long service leave liabilities can also support succession planning, workforce sustainability and educator wellbeing.

Providers should regularly review their systems to ensure they:

• apply the correct state or territory legislation
• accurately calculate long service leave accruals and entitlements
• recognise eligible casual and part-time employees
• maintain comprehensive employment and termination records
• understand whether portable long service leave schemes apply to their organisation
• regularly review long service leave liabilities as part of workforce planning
• correctly interpret any applicable enterprise agreements or pre-modern industrial instruments.

Taking a proactive approach can reduce compliance risks, minimise payroll errors and provide greater certainty for both employers and employees.

Long service leave is designed to recognise employees' long-term contribution to the workforce. For ECEC providers, however, it also represents an important aspect of sound governance, workforce planning and legislative compliance.

As employment legislation continues to evolve and educator mobility increases, providers should regularly review their payroll systems, employment practices and internal policies to ensure they align with the legislation that applies in each jurisdiction.

By understanding these differences and planning accordingly, providers can strengthen compliance while continuing to support the experienced educators who contribute to high-quality early childhood education and care.

For more information about long service leave, visit:

• Fair Work Ombudsman – Long service leave
• Fair Work Ombudsman – Long service leave fact sheet
• NSW Government – Long service leave
• NSW Community Services Industry Portable Long Service Leave Scheme

Disclaimer: This article provides general information only and should not be relied upon as legal or employment advice. Long service leave entitlements vary depending on the applicable state or territory legislation, industrial instruments and individual employment circumstances. Providers should seek independent workplace or legal advice where appropriate.