Leave Without Pay

Annual Leave

Garden leave

Garden leave or Gardening leave is where your employee is not required to attend the workplace but continues to receive their full pay for the duration of their notice period. A garden leave clause is outlined in employment contracts and is enforceable when an employee resigns or is terminated and is required to stay away from the office. The employee does not need to perform their duties during this notice period.  It is a protectionary measure that was created to prevent employees from taking proprietary information to competitors. Garden leave is mainly used in Australia, United Kingdom, and New Zealand but it was also introduced in Massachusetts in 2018, thus becoming the first state in U.S to have it. Understanding garden leave in Australia Garden leave is when an employee leaves a job and is required to stay away from work during their notice period. They receive their full pay and can work from home or not at all.  Employees are physically cut off from work and the office space and communicating with certain colleagues. It is a precautionary measure taken by employers to protect confidential information. It does not indicate mistrust or that the employee has committed some indiscretion but is a measure to ensure company information is protected. It also allows the employer to recall the employee back to work if urgent / they fall short on staff or need someone to cover shifts. Why is it called garden/gardening leave? As the employee cannot take up work elsewhere or work from home, they have time to take up hobbies (such as gardening) while getting paid. It is called garden leave, gardening leave, or gardener’s leave.  Initially the term had negative connotations, implying that an employee was suspended and is unfit for anything other than tending to a garden. Reasons for garden leave If an employee has resigned or been dismissed, you may consider putting them on garden leave. This will act as a safeguard against future repercussions or any sabotaging behaviour the employee may indulge in. Garden leave allows you to change or remove the employee’s access to confidential information. This can include financial information, account details, credit card access, client details, etc. Similarly, you can add a no-compete clause or restraint of trade clause in the employment contract which prevents employees from leaking or sharing information with competitors. Benefits of a garden leave clause Having an employment contract that consists of a garden leave clause can benefit you and your business. If you are hiring an executive or manager who has access to sensitive information, a garden leave clause is essential.   Other benefits include: Protects essential client information. Allows you to manage and control access to all information and systems. Creates a period in which the former employee cannot work for competitors. Ensures you part ways on good terms. Ensures the employee can work from home or other locations and continue getting paid. Prepare for all eventualities. If the separation is due to a hostile situation, it allows for both parties to separate without creating financial complications. Things employers need to remember Not all employees can be put on garden leave. As an employer, you must remember to ask yourself few questions before you put an employee on garden leave: Is the employee leaving on bad terms? Is the employee going on to work for a competitor? Will the departure of the employee expose the business to risk? Are there legal restrictions in place preventing garden leave? How will the transition period look like? What will the duration of the garden leave be? Do I have an existing Garden Leave clause in the employment contract? Employees continue to be paid even when they are on garden leave. So, before you place any employee on garden leave, you must consider this additional expense and its impact. You also need to confirm with your legal team or get legal advice if this employee can be placed on gardening leave. Things employees need to remember The employment agreement must set clear terms for employees during their garden leave.   Some things employees need to remember: They must abide by the terms of the employment agreement. They must be contactable during the notice period. They cannot work for another employer during the notice period. They continue to receive pay. They may receive holiday pay and sick leave if outlined in the contract. They cannot be placed on gardening leave indefinitely or for an extended period. They cannot be forced to go on garden leave. Grow with Peninsula If you require further assistance understanding different types of leave and how they impact your business, you can reach out to Peninsula. Call our 24/7 Advice Line today to get all your tricky questions answered. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Annual Leave

Long Service Leave

For most employees in Australia, if they have been working for the same employer for an extended period, they are entitled to long service leave. However, the entitlement is different depending on the source of the employee’s long service leave entitlement. If the employee’s long service leave entitlement is not preserved or provided under the Fair Work Act 2009, which State or Territory law applies will depend on where the employee works at the time they take the leave or their employment ends, even if the employer’s registered or head office is in another State or Territory. However, the State and Territory laws won’t apply to national system employees where there are long service leave entitlements in a federal pre-modern award that would have applied to a person employed before 1 January 2010 had they been employed at that time, in which case those entitlements in the pre-modern award will apply. Please seek professional advice for your employees’ long service leave entitlements to avoid any potential misunderstanding or miscalculation. Long service leave definition There are two key aspects to each jurisdiction’s definition of long service leave: How long an employee must work to qualify. How much leave the employee receives and what is considered an appropriate method of determining payment for that leave? Qualifying for long service leave For an employee to qualify for long service leave, they must have been in continuous employment with the same employer unless a portable long service leave scheme applies. That does not mean they had to have been working in the same position though. Even if the employee’s duties, responsibilities, pay or position have changed over the qualifying period, and provided they have not taken large quantities of unapproved unpaid leave within that period, they are still eligible for long service leave. The below may still count as continuous service under some schemes: If the employee is transferred between companies within the same group. If the business is sold and the employee continues to work in the business for the new owner. The qualifying period for the long service leave entitlement differs depending on the long service leave scheme. When employment ends before an employee has worked the years needed to get the full long service leave entitlement, they can sometimes get paid out part of their long service leave. This is known as pro-rata long service leave on termination. Calculating long service leave Calculating long service leave can differ depending on the state or territory, and the relevant circumstances. You need to refer to the relevant Act that governs the state or territory where the employee is employed. For example, in New South Wales an employee gets 2 months long service leave (8.6667 weeks) after 10 years of continuous service. For each additional five years of service after the initial 10, employees are entitled to a further month (4.3333 weeks) of long service leave. Long service leave payout Long service leave entitles employees to payment during their term of leave, but how much an employee is entitled to be paid is dependent on the long service leave scheme that applies to them. In most cases, the employee’s ordinary pay rate continues during a long service leave period, including annual leave entitlements. It is important to note that the ordinary pay rate is usually the employee’s base pay rate for their usual hours of work and does not include: Certain allowances. Shift loadings. Penalties. Overtime. Pay for long service leave is usually paid out at the employee’s normal weekly hours at the same pay rates (i.e. what they would have worked if they hadn’t been on leave), generally without any additional benefits and payments. This depends on the long service leave scheme. If there is no ‘ordinary’ rate of pay, often the pay entitlement during long service leave is calculated in different ways which are compared, and the greater amount will apply: The amount of the ordinary remuneration at the time the employee takes the leave; compared to The average weekly remuneration the employee earned in any number of preceding years. It is also important to remember that any unused long service leave must be paid out at the end of employment, and it cannot be cashed out while the employee is still working for the business unless the long service leave scheme permits it. Things to remember for employers: Long service leave is a national workplace entitlement. Long service leave is a part of the National Employment Standards (NES)> In some states and territories, long serving casuals are also eligible for long service leave. Some Australian states and territories allow employees to keep their long service leave entitlement even if they work on different projects for one or more employers. State and territory legislation As mentioned previously, unless another long service leave scheme applies, the entitlement to long service leave is mostly derived from State or Territory legislation, as most Modern Awards do not contain an entitlement to long service leave. Below are summaries for each State and Territory, to be used as general information. If you are unsure, please call Peninsula for free initial advice. New South Wales Employees in New South Wales who are not covered by pre-modern award long service leave terms, portable long service leave, or long service leave schemes in a contract, enterprise agreement, policy, or specific legislation are covered by the Long Service Leave Act 1955 (the Act). Full time, part time, and casual employees are entitled to long service leave, provided they have completed the required continuous service. Under the Act, employees are entitled to two months (8.6667 weeks) of long service leave upon completing at least 10 years of continuous service with their employer. On top of this, for each additional five years of service after the initial 10, employees are entitled to a further month of long service leave. This month is just over four weeks (specifically, four and a third weeks). An employee who has completed at least 5 years of continuous service, but less than 10 years, will be entitled to pro-rata long service leave in certain circumstances, where an employee resigns on account of illness, incapacity, or domestic or other pressing necessity or dies, but not if they were terminated for serious misconduct. (NOTE: The New South Wales Government had temporarily amended the Act until 31 March 2022 to allow for greater flexibility during the COVID-19 pandemic. For more information, visit the NSW State Government website.) Long service leave cannot be cashed out under the New South Wales Act. Victoria Employees in Victoria who are not covered by a pre-modern award long service leave terms, portable long service leave, or long service leave schemes in a contract, enterprise agreement, policy, or specific legislation are mostly covered by the Long Service Leave Act 2018 (the Act). The Act does not apply to employees covered by other Victorian legislation that includes long service leave entitlements, e.g. the Construction Industry Long Service Leave Act 1997  which allows for portable long service leave (see below) administered by CoINVEST for workers in the construction industry. Full-time, part-time, casual, and seasonal employees are entitled to long service leave, provided they have completed the required continuous service. Under the Act, employees are entitled to long service leave after a minimum of 7 years of continuous service with their employer. An employee is entitled to an amount of long service leave on ordinary pay equal to 1/60th of the period of continuous employment, or approximately 6.1 weeks after 7 years. There is no pro-rata leave or cashing out of leave under the Act. Queensland Employees in Queensland who are not covered by a pre-modern award long service leave terms, portable long service leave, or long service leave schemes in a contract, enterprise agreement, policy, or specific legislation are mostly covered by the Industrial Relations Act 1999 (the Act). Portable long service leave is available for employees (including apprentices, full-time, trainees, and casuals) who work in the Building and construction industry, Contract cleaning industry, and most recently the Community Service industry (commencing 1 January 2021). Employers with employees covered by the portable long service leave scheme must register with QLeave (the relevant authority) and advise when an employee starts and ends their employment with the business. Full-time, part-time, and some casual employees, as well as seasonal employees in specific industries, are entitled to long service leave provided, they have completed the required amount of continuous service. The long service leave entitlement in Queensland is just over eight weeks (or more specifically, eight and two-thirds weeks) after 10 years of continuous employment. Beyond ten years of continuous service, employees are entitled to an additional 4.333 weeks of long service leave for each additional five years of continuous service. An employee who has completed at least 7 years of continuous service, but less than 10 years, will only be entitled to pro-rata long service leave on termination under certain circumstances including where an employee resigns on account of illness, incapacity, or domestic or other pressing necessity, or dies, or the employer dismisses the employee for a reason other than the employee’s conduct, capacity or performance or unfairly dismisses the employee. If cashing out is permitted under an award or agreement that covers an employee’s employment, an employee may agree with their employer to cash out all or part of their accrued long service leave entitlements. Any such agreement must be in writing and signed by the employee and the employer. In the absence of such a provision, an application on the grounds of compassionate or financial hardship can be made to the Queensland Industrial Relations Commission. Australian Capital Territory Employees in the Australian Capital Territory who are not covered by a pre-modern award long service leave terms, portable long service leave, or long service leave schemes in a contract, enterprise agreement, policy, or specific legislation are mostly covered by the Long Service Leave Act 1976 (the Act).  Please note that this Act does not apply to Public Sector employees or employees covered by the Long Service Leave (Portable Schemes) Act 2009. Full-time, part-time, and casual employees are entitled to long service leave, provided they have completed the required continuous service. Under the Act, employees are entitled to just over six weeks of leave upon completing at least seven years of continuous service. For each subsequent year of continuous service, employees accrue a further one-fifth of a month of long service leave. This means that long service leave is available on a year-to-year basis following the initial 7-year period. An employee who has completed at least 5 years of continuous service, but less than 7 years, will be entitled to pro-rata long service leave if they resign because of illness or incapacity or a domestic or other pressing necessity; or upon or after attaining the minimum retiring age; or if they die or are terminated by the employer for reasons other than serious and wilful misconduct. Long service leave must be taken and cannot be cashed out. Western Australia Employees in Western Australia are mostly covered by the Long Service Leave Act 1958 (the Act). It is important to note that the Act does not apply to employees in the building and construction industry; or to National System employees who have long service entitlements in a federal pre-modern award that would have applied to an employee before 1 January 2010 had they been employed at that time; or, in some circumstances, to employees covered by a federal registered agreement. An award, industrial agreement, contract, or a State, Territory, or Commonwealth statute may provide a more generous entitlement than the Act or apply to the exclusion of the Act. Full-time, part-time, and casual employees are entitled to long service leave, provided they have completed the required continuous service. Under the Act, employees are entitled to over eight weeks (specifically eight and two-thirds) of long service leave after the completion of at least 10 years of continuous employment with their employer. On top of this, for each additional five years of continuous employment following the initial 10 years, employees are entitled to a further four and one-third weeks of long service leave. An employee is entitled to pro-rata long service leave when they work at least 7 years but less than 10 and the employment is terminated by death; or for any reason other than serious misconduct. In some circumstances, employers and employees can agree in writing that employees will cash out some of their long service leave. Northern Territory If an employee’s pre-modern award does not contain any terms, portable long service leave, or long service leave schemes in a contract, enterprise agreement, policy, or specific legislation to long service leave, employees in the Northern Territory are mostly covered by the Long Services Leave Act 1976 (the Act) unless they are government employees or a construction worker. Full-time, part-time, and casual employees may be entitled to long service leave, provided they have completed the required continuous service. Under the Act, employees are entitled to 13 weeks of long service leave upon completing of at least 10 years of continuous employment with their employer. On top of this, they are entitled to an extra 1.3 weeks of long service leave for each additional year of service following the initial 10 years which can only be taken after an additional five years. An employee, who has completed at least 7 years of continuous employment, but less than 10 years, will be entitled to pro-rata long service on termination where the employment ends due to retirement or account of illness, incapacity, or domestic or other pressing necessity, and on the termination of employment by the employer for a reason other than serious misconduct. Long service leave in the Northern Territory cannot be cashed out. South Australia Employees in South Australia who are not covered by a pre-modern award long service leave terms, portable long service leave, or long service leave schemes in a contract, enterprise agreement, policy, or specific legislation are mostly covered by the Long Service Leave Act 1987 (the Act). It is important to note that the Act does not apply to Public Sector employees or employees covered by the Construction Industry Long Service Leave Act 1987 or the Long Service Leave (Portable Schemes) Act 2009. Under the Act, employees are entitled to 13 weeks of long service leave upon the completing at least 10 years of continuous employment with their employer. On top of this, they are entitled to an additional 1.3 weeks of long service leave for each full year of service after the initial 10 years. An employee, who has completed at least 7 years of continuous employment, but less than 10 years, will be entitled to pro-rata long service on termination where the employment is terminated by the employer for any reason other than the employee’s serious and wilful misconduct, or the employee resigns and gives the correct notice. By agreement between an employer and an employee, an employee (with at least ten years of continuous service) can cash out all or part of their entitlement to long service leave. This agreement must be in writing and signed by both parties. Tasmania Employees in Tasmania who are not covered by a pre-modern award long service leave terms, portable long service leave, or long service leave schemes in a contract, enterprise agreement, policy, or specific legislation are mostly covered by the Long Service Leave Act 1976 (the Act). However, please note that separate provisions under this Act apply to Mining employees. The Act may not apply to the construction industry or Public Sector employees. Under the Act, employees are entitled to eight and two-thirds weeks of long service leave upon the completing at least 10 years of continuous employment with their employer. On top of this, they are entitled to four and one-third weeks for each additional five years of service after the initial 10 years. A full-time, part-time, or casual employee who has completed at least 7 years of continuous service but less than 10 years, may be entitled to pro-rata long service leave in certain circumstances. An employee will be entitled to pro-rata long service leave when they attain retirement age (65 years of age for a male, or 60 years of age for a female) or the employee dies, or where the employment is terminated by the employer for any reason other than serious and wilful misconduct. An employee might be entitled to pro-rata long service leave where employment ceases due to illness or the employee resigns due to incapacity or ‘domestic or other pressing necessity. By agreement between an employer and an employee, an employee (with at least ten years of continuous service) can cash out all or part of their entitlement to long service leave. This agreement must be in writing and signed by both parties. Portable long service leave Some Australian States and Territories have legislation to provide employees in the security, community services, building and construction, black coal mining, and contract cleaning industries with access to portable long service leave. This means employees continue to accrue long service leave while working for different employers within the same industry. To find out more about long service leave entitlements in your state or territory, contact  Peninsula today for free initial advice.