Paying LSL when dismissed for serious misconduct

Q&A

Paying LSL when dismissed for serious misconduct

If an employee is dismissed for serious misconduct, should any long service leave entitlement be included in the termination pay?

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If an employee is dismissed for serious misconduct, should any long service leave entitlement be included in the termination pay?
 
This question was recently sent to our Ask an Expert service.
 
Q  After an internal investigation, our company has terminated a long-serving employee because of theft. The police were called and charges have been laid against him. The employee was employed by us for approximately eight and a half years. He has enquired about his termination pay and whether he will receive any long service leave payout. Because he was dismissed due to serious misconduct is there still an entitlement to pro rata long service leave on termination? He was employed in our Melbourne office.

A  Under the Long Service Leave Act 1992 (Vic), an employee ceasing employment after at least seven years continuous employment with the employer is entitled to be paid long service leave at the standard accrual rate of one week for each 60 weeks of continuous employment, regardless of the reason for the termination of employment. It should be noted that an entitlement to pro rata long service leave on termination, where the reason for the dismissal was due to serious misconduct, can differ depending on the relevant state or territory long service leave statute.
 
Generally, where there is no entitlement to pro rata long service leave if the reason for dismissal was due to the employee’s serious misconduct, an entitlement on termination would usually be payable if the employee has served a period of employment that qualifies him or her to take the long service leave.
 
The following is a summary of the entitlement to pro rata long service leave on termination, with respect to each state and territory statute, when an employee is terminated due to serious and/or wilful misconduct:
    • Australian Capital Territory — no entitlement with less than 7 years continuous service, entitlement after 7 years or more
    • New South Wales — no entitlement with less than 10 years continuous service, entitlement after 10 years or more
    • Northern Territory — no entitlement with less than 10 years continuous service, entitlement after 10 years or more
    • Queensland — no entitlement with less than 10 years continuous service, entitlement after 10 years or more
    • South Australia — no entitlement with less than 10 years continuous service, entitlement after 10 years or more
    • Tasmania — no entitlement with less than 7 years continuous service, entitlement after 10 years or more
    • Western Australia — no entitlement with less than 10 years continuous service, entitlement after 10 years or more


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