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Intro

Contents

1. Purpose

The purpose of this guideline is to provide local governments and their employees with guidance on the Local Government (Long Service Leave) Regulations 2024 (the regulations) and the long service leave entitlements of local government employees.

This guideline is intended to assist local government payroll officers and employers in understanding the regulations.

2. Scope

This guideline is applicable to all local governments in the state.

3. Introduction

The entitlement to long service leave for local government employees in Western Australia (WA) is provided under regulations made under the Local Government Act 1995 (the Act).

Previously, these regulations were the Local Government (Long Service Leave) Regulations of 1977 (the 1977 Regulations). From 1 September 2024, these regulations are the Local Government (Long Service Leave) Regulations 2024.

A separate legislative instrument for local government long service leave exists for 2 key reasons:

  • the long service leave entitlement of local government employees is higher than that provided to private sector employees in the Long Service Leave Act 1958
  • long service leave is portable between local governments, regional local governments (referring to section 3.61 of the Act) and the Western Australian Local Government Association (WALGA).

The new regulations were made by the government to improve the operation of the local government long service leave portability scheme and align more closely with reforms that have occurred to the Long Service Leave Act 1958 since 1977.

As per regulation 26, the functions of the local government under the regulations are to be performed by the local government chief executive officer (CEO), except in respect to the CEO’s own employment, where decisions of the employer are made by the council. This is consistent with the separation of employment functions set out in the Act.

4. Accruing long service leave

4.1. Accrual period

Regulation 11 provides that each local government employee is entitled to 13 weeks of long service leave for every 10 years of reckonable service they complete with an employer. This regulation must be read in conjunction with the definition of employee and employer and regulations 7, 8, 9 and 10 which provide for what counts towards the period of reckonable service.

As an overview of these regulations:

  • an employee covers anyone employed by a local government, regional local government or WALGA, but not a person who is on a contract for service such as a consultant
  • an employer means any local government in WA, including the regional local governments established under section 3.61 of the Act or the former Local Government Act 1960, and WALGA

reckonable service means a period of continuous employment with one or more employers, subject to regulations 8 and 9, which set out what is reckonable continuous employment and events which do not break the continuity of employment.

 

4.2. Reckonable service

Regulation 8 sets out a series of events that count towards the 10 years of reckonable service in addition to attendance at work on an ordinary working day.

Regulation 8
Summarised provisionExample
Periods of paid leave including where the employee is receiving payment from the Commonwealth for their parental leave.The employee takes 4 weeks annual leave for the summer school holidays to care for their children. These 4 weeks are counted towards their 10 years’ service.
90 days of unpaid leave in a year and any unpaid leave covered by agreement.The employee takes 4 weeks of unpaid leave to care for their parent. The 4 weeks count towards their 10 years’ service.
Public holidays.The employee has Christmas day off as a public holiday. This day counts towards their 10 years’ service.
Periods where an employee is absent due to the employer’s response to an emergency including a COVID-19 emergency.The employer directs employees not to attend work for the day because of an emergency. This day counts towards their 10 years’ service.
Periods where the employer directs the employee to not attend work.

An employee is suspended from duty while an allegation of misconduct is investigated. This period of suspension counts towards their
10 years’ service.

Note: under regulation 21(2), if the employment is terminated for serious and wilful misconduct, the employee may not be entitled to a pro rata long service leave payout.
Periods where the employee refuses to work under the Work Health and Safety Act 2020.The employee is assigned work that is unsafe to complete. Until it is deemed safe to work again or they are assigned other work, this period counts towards their 10 years’ service.
Periods for casual employees where their absence from duty is expected.An employee who is a casual local government lifeguard in the summer is not working over winter as the pool is closed. Despite not working in the winter, this counts towards their 10 years’ service as the absence is due to seasonal factors and they will return in the summer.
A period following termination of employment by an employer with the employer’s intention of avoiding their obligation to pay long service leave or any other employment obligation.An employee’s employment is terminated in local government at 6 years and 11 months to avoid needing to pay a pro rata amount for long service leave. If this was subsequently found by a court or commission to be done with the intention of avoiding this payout, the reckonable service the employee completed since the employee’s termination is extended by up to 6 months.
A period following the dismissal of the employee which the Western Australian Industrial Relations Commission (WAIRC) determined to be harsh, oppressive or unfair and orders the employee’s reinstatement.An employee’s employment is terminated by a local government employer. The dismissal was found to be harsh, oppressive or unfair by WAIRC and reinstatement was ordered. Consequently, the period of continuous employment is unbroken and up to 6 months may be added back to the employee’s reckonable service.
A period where the employee is in the service of the Defence Force of the Commonwealth of Australia if they resume their employment as soon as practicable, provided they are not part of the permanent Defence Force.An employee is a corporal in the Army Reserve and is called up to active service. Their period in service is part of their 10 years’ service if they return to work for the local government once their active service concludes.

Regulation 9 then deals with situations that do not break the continuity of overall employment but are not counted towards 10-year reckonable service. This means that the accrual pauses during this period and resumes when they return to reckonable service.

Regulation 9
Summarised provisionExample
A period of unpaid leave or absence from duty, other than a period mentioned in regulation 8 (90 days in a year, unless otherwise agreed).An employee takes unpaid leave for a year. While 90 days of that leave do count towards their reckonable service, the remaining period does not. Upon returning to work, their accrual resumes.
A period, not exceeding 6 months, between the termination of the employment by the employer for slackness of trade and the re‑employment of the employee by the same employer (if no pro rata payout is made).

An employee has worked for the local government for 3 years as a gym trainer and their employment is terminated due to a lack of work, consequently leading to 3 months of unemployment. They are rehired 3 months later as work picks up again.

In this situation, while their period of unemployment does not count as reckonable service, their reckonable service is to include their prior service.

A period, not exceeding 2 months, between the termination of the employment by the employer on any ground other than slackness of trade and the re-employment of the employee by the same employer (if no pro rata payout is made).

An employee has worked for the local government for 3 years as a casual staff member and their employment is terminated by the local government. They are then reemployed by the same local government a month later.

While their period of unemployment does not count as reckonable service, their reckonable service is to include their prior service.
A period between employers of no greater than 4 weeks or the balance of annual leave that was paid to the employee if no pro rata payout was made.

An employee leaves City A for City B and has a 3-week break in between.

While the 3-week break does not count towards reckonable service for the 10-year accrual period, upon commencement at the new employer their accrual resumes.
An employee on a fixed term contract which expired is then reemployed within 3 months by the same employer and no pro rata payout was made.

An employee who’s employed on a fixed-term contract as a project officer has their contract expire. After a break of a month, they were reemployed in a new role in the local government.

While the month break did not count towards reckonable service for the 10-year accrual period, their accrual resumes upon recommencement at the local government.
A local government apprentice, within 12 months of completion of the apprenticeship, is employed by that local government, or another local government or WALGA, provided no pro rata payout was made.

A carpentry apprentice for City A at the conclusion of their apprenticeship, and after a 3-month break, commenced as a carpenter for City B.

While the 3-month break did not count towards reckonable service for the 10-year accrual period, their accrual resumes upon commencement at the new employer.

4.3. Transfer of business

Where a local government acquires a business in which employees are transferred to the local government, regulation 10 provides for regulation 7 (term used: reckonable service), regulation 8 (Periods included in continuous period of employment) and regulation 9 (periods not included in continuous period of employment, but taken not to break it) to apply as though the transferring business was one of the employers. This means that the prior service of those employees for the acquired business is included and becomes portable within the local government sector.

Where a local government privatises a business to an employer outside the local government sector that includes the transfer of employees, the transfer of those employees’ long service leave is dealt with in part II, division 3 of the Long Service Leave Act 1958.

Local governments engaged in a transfer of business process may wish to seek legal advice in relation to the transfer of long service leave.

5. Taking long service leave

5.1. Rate of pay

The regulations set out what employers are to pay their employees whilst they take long service leave. In general terms, this would be the ordinary pay the employee would receive each week (see regulations 6, 14 and 15).

During a period of long service leave — other than casual loading applicable for casual employees — no other allowance, shift premium, penalty rate, or overtime applies. However, if a pay rise occurs while an employee is on long service leave, the regulations provide that the employer must pay the pay rise (see regulation 14(4)).

The ordinary pay an employee would receive on long service leave is calculated by the employee’s weekly number of hours of work multiplied by the employee’s ordinary rate of pay. For a full-time employee, this would be their normal full-time pay. However, for a part-time or casual employee, employers are required to pay the average weekly hours the employee worked throughout the accrual period, subject to the transitional calculation.

The regulations allow for situations where the employee and employer agree in writing for the employee to be paid the entire value of their long service leave in full before they start their period of leave (see regulation 14(3)).

5.2. Transitional calculation

A different method of calculating an employee’s entitlement has been introduced in the 2024 Regulations which differs from the 1977 Regulations.

As a result of this change, a transitional provision has been applied to ensure that no employee is left worse off. For employees that accrue long service leave under both the 2024 Regulations and the 1977 Regulations, those employees receive the best entitlement of both options. Consequently, for the first 10 years of the 2024 Regulations there will be 2 methods of calculating an employee’s entitlement.

An outline of the 2 methods is given below:

  1. Method A — this is the method in the 2024 Regulations that is similar to that provided in the Long Service Leave Act 1958. Using this method, the weekly number of hours for calculating an employee’s ordinary pay is the average of the ascertainable hours worked during the accrual period. As an example, for an employee who worked 4 days a week for the first 5 years of the accrual period and full time for the final 5 years, the employee would have average ascertainable hours of 90% of a full-time equivalent. The employee is entitlement to receive 90% of their fulltime salary while on long service leave.
  2. Method B — this is the historic method provided in the 1977 Regulations and the Long Service Leave Act 1958 prior to the 1995 Act amendments. This method only averages an employee’s hours over the final 12 months before you took long service leave. As an example, for an employee who worked full time for their final 12 months, the employee is entitled to receive 100% of their full-time salary while on long service leave.

You can find other explanations of the operation of the transitional provision in the table below:

Explanations of the operation of the transitional provision
Accrual periodTime period Method to be applied
Period wholly under new schemeCommenced or began accruing a new period of long service leave with a relevant employer on or after 1 September 2024Method A (new scheme)
Period covers new scheme and old schemeCommenced with a relevant employer between 2 July 2014 and 31 August 2024Whichever of Method A and Method B produces the better result for the employee
Period wholly under old schemeCompleted 10-year accrual period on or prior to 31 August 2024Method B (old scheme)

5.3. Ascertainable hours worked

For the purposes of determining an employee’s average weekly hours as a part-time or casual employee, the word 'ascertainable' is used.

A definition of what constitutes ascertainable hours worked is included in regulation 6.

In practice, where a local government’s records may no longer be available due to general record disposal requirements and changing record keeping requirements, the regulations require the available records to be extrapolated to cover the entire period.

5.4. Taking long service leave

Regulation 12 provides for the taking of long service leave and directs that the employee is to take the leave and the employer must allow that leave to be taken as soon as practicable. This typically occurs through informal discussions between the employee and employer recognising the need to potentially backfill the employee’s role during their absence and for the employee to book whatever leisure plans they may wish during their period of leave.

Additionally, regulation 12 allows long service leave to be taken in one continuous period or 2 or more periods. These two or more periods may be as short or as long as the employer and employer agree. The sole purpose of this regulation is to enable flexible use of long service leave. For example, an employee may wish to use their 65 days off work to work 4-day work weeks on 65 occasions.

Regulation 12(3) provides a mechanism to resolve instances where the employee and employer cannot agree on when to take the leave. Once 12 months since the accrual date have passed, it provides that an employee may give 2 weeks written notice of the leave, after which point the long service leave is taken. For employers, they may provide 2 months written notice directing the employee to take the long service leave at which point they shall be on leave.

The regulations provide that where a period of long service leave falls on a public holiday, which the employee would have ordinarily worked, the employees leave is extended by a day. In other words, instead of needing to break up periods of long service leave to capture public holidays, an employee can now take long service leave without consideration needing to be given to those public holidays. An employee would be credited with an additional day of long service leave for each public holiday day that fell during their period of leave.

5.5. Taking of advance long service leave

Regulation 13 provides that an employee may take advanced long service leave by agreement if they have completed 7 years of reckonable service. Employers and employees are under no obligation to agree to advance long service leave.

For the purposes of determining the rate of an employee’s long service leave, the period for the purposes of calculating the employees average weekly hours worked is the accrual period up until the day of the commencement of the advanced leave. For example, if the employee had worked 8 years and sought to take their long service leave in advance, the 8-year period would be used for determining the rate of leave instead of the normal 10-year accrual period.

Where an employee leaves the sector before they complete their overall 10-year accrual period, the amount of advance long service leave paid to the employee may be taken from their final payout. Reflecting the portability scheme, any amount must be paid back to other employers based upon the proportion they contributed towards the cost of the long service leave.

5.6. Taking of leave at half pay or double pay

Regulations 16 and 17 allow for employees and employers to agree to the taking of long service leave at half pay or double pay. In these circumstances, either the ordinary rate of pay is halved for double the time of leave, or the amount of leave is halved for double the ordinary rate of pay.

5.7. Employee not to take other employment during leave

Regulation 18 directs that employees are not to work during a period of long service leave without their employer’s agreement. This reflects the secondary employment requirements local governments should have in place as a risk control. Failure of the employee to comply with this may be dealt with by the employer in accordance with normal industrial processes.

6. Payments in substitution for long service leave

6.1. Cashing out of long service leave

The new regulations allow an employee to apply to their employer to cash out their long service leave instead of taking it (see regulation 19). The employer cannot initiate the cashing out of long service leave; it must only come from the employee.

The amount the employee is to be paid is the equivalent of what the employee would be paid if employee had taken that leave at the moment it is cashed out. An employee can only apply to cash out long service leave once the employee has accrued that leave after 10 years reckonable service.

While cashing out of long service leave may be an efficient solution to a local government’s leave liability, it is recommended that proper consideration be given such an application.

Benefits of an employee taking leave include:

  • supporting the employee’s wellbeing and the reduction of psychological and burnout risks
  • the rotation of duties to other employees, which may assist with preventing fraud
  • reducing the overall leave liability of the local government.

CEOs may wish to establish procedures for deciding on cashing out of long service leave.

6.2. Payment in substitution for accrued long service leave

Regulation 20 deals with the situation where an employee has accrued a full entitlement of long service leave and decides to leave the local government prior to taking all, or part of, their long service leave. In this event, the employer is to pay out all the remaining long service leave as part of the employee’s termination payment.

Long service leave, once accrued, is not portable to another local government and must either be taken or paid out. In this circumstance, it does not matter if a future employer is in the local government sector, the accrued balance must be paid out.

For example, an employee has worked in the local government sector for 10 years and 3 months and decides to resign and take up new employment. That employee has not yet taken their long service leave. In this example, the employee is entitled to be paid out the accrued 13 weeks long service leave as part of the termination payment (in addition to any other leave which is paid out on termination).

6.3. Payment in substitution for expected long service leave

Regulation 21 deals with the situation where, after completing at least 7 of 10 years of reckonable service, an employee’s employment in the local government sector ends (other than for serious and wilful misconduct). In this circumstance, the employee is entitled to be paid a pro rata amount for the long service leave they had accrued. However, where the employee remains in the local government sector and does not break their continuity, the long service leave accrual transfers to their new employer.

Regulation 21 also provides that when a dismissal is overturned by WAIRC due to it being harsh, oppressive, or unfair — and the employer has paid out for expected long service leave — the employee may repay the amount they were paid if the employee is reinstated. The employee’s accrual of long service leave would then resume at the point they were unfairly dismissed.

6.4. Payment on death

Where an employee is entitled to a payment under regulation 20 or 21 and passes away, the entitlement must be paid to the personal representative of the deceased (in addition to other entitlements).

The personal representative will be determined through the process used to deal with the deceased estate, which may be the executor or administrator of the deceased estate, or the deceased person’s next of kin.

6.5. Examples of termination payments

The table below provides examples of various periods of service and the termination payment or transfer of accrual, if any, that must be made to the employee:

Examples of termination payments
Termination time periodIf employed by different local government within the specified periodIf not employed by a different local government employer within the specified period
After 5 years of reckonable serviceReckonable service of 5 years transferred to new local government employer.Accrual lapses and no payout required.
After 7 years of reckonable service (and no advance leave taken before the resignation)Reckonable service of 7 years transferred to new local government employer.Employee is paid out the equivalent of 7 years long service leave, accrual being 9.1 weeks.
After 10 years of reckonable service (and no long service leave entitlement taken before resignation)The employee is paid out a full entitlement of long service leave, being 13 weeks.The employee is paid out a full entitlement of long service leave, being 13 weeks.
After 13 years of reckonable service (and 7 weeks of their long service leave entitlement was taken before resignation)

The employee is paid out their remaining entitlement of long service leave, being 6 weeks.

Reckonable service of 3 years transferred to new local government employer.
The employee is paid out their remaining entitlement to long service leave, being 6 weeks and a pro rata amount of 3 years of long service leave accrual for 3.9 weeks, for a total payout of 9.9 weeks.

Note: in terms of a local government employer, the above table also applies to portability of long service between regional local governments (see section 3.61 of the Act) and WALGA.

7. Transfer of leave between employers

7.1. Portability scheme

Long service leave in the local government sector is portable between local government employers, regional local governments and WALGA.

For employees this means that the cumulative service across local governments, regional local governments and WALGA adds up to form 10 years of reckonable service. As previously provided in the 1977 Regulations, to facilitate this scheme, previous employers have a duty to contribute towards cost of long service leave to the final employer at the end of the accrual period.

To facilitate this scheme, the regulations require the employer to keep a series of records regarding their employees for 10 years following the end of the employee’s employment
(see regulation 24).

A local government is already obliged to keep many of these records under the Industrial Relations Act 1979. This includes records of the hours worked by the employee each week to ascertain the average weekly hours for the overall entitlement. These records must be available to the employee or persons they authorise to act on their behalf, such as their trade union or legal representative. The records must also be available to any other employer of the employee, or a State Government industrial inspector appointed under the Industrial Relations Act 1979.

In relation to the record keeping and portability process, the regulations provide for an approved form that simplifies the process for sharing of employment records (see regulation 25).

This form provides the information the current employer needs to calculate the long service leave benefit and contribution payable by former employers. The regulations provide that when an employee informs their employer of their prior service, the employer is to contact the former employer and request they provide the information required by the form. This enables the final employer to rely on the form to calculate the long service leave benefit and entitlement.

7.2. Shared cost of long service leave between employers

When an employee is entitled to long service leave, a contribution needs to be made to the final employer by any former employers of the employee during the accrual period.

Regulation 23 sets out the below formula for the contribution to be made by a prior employer to the next employer:

C = (x x P) / TS

  • C is the amount that may be recovered from a former employer.
  • L is the period of leave or notional period of leave for which the cost is paid, expressed in weeks.
  • S is the part of the accrual period, expressed in complete weeks, during which the employee was in the employment of that other employer.
  • P is the employee’s ordinary pay for the week they left the employment of the other employer.
  • TS is the total accrual period, expressed in weeks, in which the long service leave was accrued.

This formula is the same as was provided in the 1977 Regulations.

As an example of this formula, an employee worked for 2 local governments – City A and City B. Overall, the employee completed 8 years in local government, with 2 of those years at City A.

At the conclusion of the employee’s time at City A, the employee was paid $1500 a week. At the time of leaving City B, the employee was paid $3000 a week. In this example, based upon a salary of $3000 a week and a leave entitlement of 10.4 weeks, the employee is entitled to a pro rata payout for long service leave of $31,200 before tax.

(10.4 x 104 x $1500) / 417 = $3890.65

  • C: $3,890.65.
  • L: 10.4 weeks, being 8 of 10 years accrual.
  • S: 104 weeks, being 2 whole years of complete weeks.
  • P: $1500, being the final salary at termination.
  • TS: 417 weeks, being 8 years in complete weeks.

As a result, City A is liable to pay City B $3890.65 of the $31,200 for the long service leave benefit which was paid out on termination. Due to wage increases by promotion, increments and general salary rises, the benefit payable by the previous employer will often be smaller than that payable by the final employer.

7.3. Joint employment

The portability scheme operates differently when an employee is employed by 2 local governments at the same time. This can occur across many roles in local government where a resource is shared, or in some cases with casual employees working for multiple local governments.

Where an employee employed jointly by several employers, those employers, unless they otherwise agree, are to equally contribute using the formula (which is modified as necessary).

8. Employer and employee agreements

Regulation 5 provides that where the specific words 'by agreement' are used in the regulations, the matter in question can be dealt with in:

  • an industrial instrument such as the Local Government Officers’ (Western Australia) Award 2021 or Municipal Employees (Western Australia) Award 2021 or the local government’s industrial agreement
  • the contract of employment between the employee and the employer
  • another agreement in writing between the employee and employer.

It is noted that this cannot be used where it would contravene section 114 of the Industrial Relations Act 1979. In other words, where a matter is provided for in the award or the agreement, it cannot be overridden by a contract of employment or other agreement.

The below table sets out what matters can be addressed by agreement:

What matters can be addressed by agreement
MatterExample
Other periods of unpaid leave included as reckonable service (regulation 8(1)(c))The industrial agreement may provide that unpaid parental leave is included in the reckonable service in excess of the 90 days that would already be included under regulation 8(1)(b).
Taking of long service leave in 2 or more separate periods (regulation 12(2))The industrial agreement may provide that long service leave can be taken in as many separate periods as an employee and employee agrees.
Taking of advance leave (regulation 13(1))The industrial agreement may enable employees to take long service leave in advance.

Where in other parts of the regulations there is a reference to 'agree in writing', this is to be dealt with on an individual basis between the employee and the employer.

9. Disputes regarding long service leave

The regulations provide a base entitlement for long service leave across the local government sector. However, many local government employees are covered by specific industrial instruments such as contracts or industrial agreements, which may provide for improved long service leave entitlements.

In the first instance, employees should seek to resolve queries about entitlements, calculations, and pay outs with their relevant employer.

If an employee is unable to resolve their query with their employer, they may wish to consider the following options:

  • if you are a member of an industrial organisation like a union – you may wish to seek advice from your industrial organisation
  • seek advice from a legal or relevant employment relations organisation.

An industrial instrument, such as an industrial agreement, may contain applicable dispute resolution procedures. In addition, individual employees and unions may have options to resolve disputes regarding entitlements through mechanisms established under the Industrial Relations Act 1979. Further information is available on the WAIRC website.

Employers may wish to consider the following options:

  • the Western Australian Local Government Association Employee Relations provides human resource management and industrial relations advice to local government members — you may wish to contact WALGA’s Employee Relations service for more information
  • seek independent legal or employment advice.

The Department of Local Government, Sport and Cultural Industries cannot provide advice to:

  • employees to resolve disputes about long service leave entitlements; or
  • employers on payroll or employee relations matters to resolve disputes about long service leave entitlements.

Copyright

This document contains information, opinions, data, and images (“the material”) prepared by the Department of Local Government, Sport and Cultural industries (DLGSC). The material is subject to copyright under the Copyright Act 1968 (Cth), and it is owned by the State of Western Australia through the DLGSC.

DLGSC encourages the availability, dissemination and exchange of public information. Should you wish to deal with the material for any purpose, you must obtain permission from DLGSC. Any permission is granted on the condition that you include the copyright notice “© State of Western Australia through Department of Local Government Sport and Cultural Industries” on all uses.

To obtain such permission, please contact the Corporate Communications team at:

Department of Local Government, Sport and Cultural Industries
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Leederville WA 6007

Postal address: PO BOX 8349
Perth Business Centre WA 6849

Email info@dlgsc.wa.gov.au

Disclaimer

Whilst the information contained in this document has been formulated with all due care, the DLGSC does not accept any liability to any person for the information (or the use of such information) which is provided in this document or incorporated into it by reference.

The information contained herein is provided on the basis that all persons accessing the document undertake responsibility for assessing the relevance and accuracy of its content.

Contact us

If you have questions about the content of this document, please contact the Support and Engagement team of the Local Government Division at:

Email lghotline@dlgsc.wa.gov.au
Telephone 61 8 6552 7300
Free call 1800 634 541 (country only)
Translating and Interpreting Service (TIS) telephone: 13 14 50

Page reviewed 03 September 2024