Impact of pre-Fair Work agreements excluding LSL?

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Impact of pre-Fair Work agreements excluding LSL?

Some pre-Fair Work agreements had provisions excluding long service leave entitlements — these agreements were made under WorkChoices legislation. What is the fate of such provisions now?

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Some pre-Fair Work agreements had provisions excluding long service leave entitlements — these agreements were made under WorkChoices legislation. What is the fate of such provisions now?

This question was recently sent to WorkplaceInfo.

Q  Our current workplace agreement has passed its expiry date, and the company and employees are currently negotiating a proposed enterprise agreement for approval before Fair Work Australia (FWA).

The current agreement was ratified under the previous WorkChoices legislation and contains a clause that specifically excludes long service leave entitlements.

A number of our expired individual Australian Workplace Agreements (AWAs) contain the same provision.

We understand that such a condition in a proposed agreement would not pass the better off overall test (BOOT) under the Fair Work Act 2009; however, does this mean that where a previous agreement ceases to operate the terms of the scheme then begin to apply (eg under state or territory legislation), and operate to provide a full entitlement to the employee, despite the purported period of exclusion?

A  This situation is referred to in s113A of the Fair Work Act.

This section provides a one-off opportunity for an enterprise agreement made after the commencement of the National Employment Standard (NES) to recognise in an ongoing way the effect of the exclusion of long service leave in an agreement, that applied on commencement. A number of conditions to this provision apply:
  • the ability for a replacement agreement to discount periods of service only applies where the exclusion is in express terms, it cannot be implied
  • the period of service that may be discounted in an enterprise agreement may not exceed the period during which the current workplace agreement or AWA applied
  • the replacement agreement must commence immediately after the current workplace agreement or AWA for the exclusion to have effect.
Fair Work Act
 
Where the enterprise agreement includes such a provision, the period of service is taken not to count, and never to count, for the purpose of determining long service leave entitlements under either the NES or the relevant state or territory long service leave law, despite provisions to the contrary in other sections of the Fair Work Act (ss27 and 29).

According to the Supplementary Explanatory Memorandum to the Fair Work Bill 2009, a period of service that is never taken into account for calculation of long service leave entitlements can be reinstated by subsequent agreement. This agreement need not be by way of an enterprise agreement but could occur, for example, through a contract of employment.
 
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