Senate wasting time on portable long service leave inquiry

Portable_LSL

It is disappointing that the Senate has decided to waste time and energy on a national inquiry into portable long service leave – a counterproductive issue that has been pushed by the trade union movement for some time.

Labor, The Greens and some Crossbench Senators have combined to establish a Senate Committee that will inquire into the “feasibility of, and options for, creating a national long service standard, and the portability of long service and other entitlements”. The inquiry is also looking into claims of the increase in ‘insecure work’, which Ai Group rejects, and its relationship to the incidence of employees qualifying for long service leave.

With portable long service leave schemes, service in an industry or the workforce is counted rather than service with a single employer. Accordingly, these schemes conflict with the fundamental purpose of long service leave as a mechanism to reward lengthy service with an employer.

Ai Group has long opposed the extension of portable long service leave schemes beyond the construction and coal mining industries where they currently predominantly operate.

In a major submission to the current Victorian Inquiry into Portability of Long Service Leave Entitlements, we demonstrated that a portable long service leave scheme across the workforce would cost Victorian employers over $4 billion per annum – more than four times as costly as the existing Victorian long service leave provisions.

For example, traditional long service leave costs Victorian employers in the manufacturing industry around $115.8 million per year – about a quarter of the $457.6 million per annum cost of a portable long service leave scheme.

When the analysis is extended across every State and Territory, there is no doubt that a national portable long service leave scheme would cost industry well over $10 billion each year.

Submissions to the senate inquiry are due by 11 December 2015 – the terms of reference for the inquiry are available here.

Ai Group is preparing a comprehensive submission strongly opposing the extension of portable long service leave entitlements beyond the few industries where they currently operate – and we would like to hear from members about your views on portable long service leave.

Interested members can contact Genevieve Vaccaro, Ai Group’s Senior Adviser – Workplace Relations Policy, or leave a comment below.

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Stephen Smith
Ai Group's Head of National Workplace Relations Policy, Stephen Smith is responsible for workplace relations policy development and advocacy. He regularly represents industry’s views to governments and opposition parties, and in numerous inquiries and major cases. He is Special Counsel for, and Chairman of the Board of, Ai Group Workplace Lawyers, a national law firm operated by Ai Group.

3 Comments

  1. Frank Smit

    In the 39 years DYNE Industries Pty Ltd has been operating in manufacturing we have had at least 10 employees who have taken their long service leave – in many cases more than once because they have been with us for over 25 years. We have always been able to cope well with their absence and the payments by planning accordingly.

    In a portable long service leave situation we would not be able to plan as someone might join and be eligible for LSL within a short time. This would be very disruptive especially if they leave shortly afterwards and all the effort in training them has no rewards.

    The extra cost of administration by a government body also adds to the burden.

    The principle of LSL as a reward for loyalty to the employer will also be destroyed.

    However it must be admitted that with the short term contracts of employment which is prevalent with some larger employers and with most government departments the opportunity to earn LSL is being limited.

    This trend must be stopped because that is why portable LSL is being requested.

    Are employers their own enemy by cutting out the chance to earn LSL with one employer.

    Reply
  2. Elaine Findlay

    We have absolute trust in the findings of A.I. Group and advise that we
    have a family business which operates in the building industry where the portable Long Service Leave applies. This appears to be OK, as one of the employees has been able to apply for L.S.L. which includes years worked with another builder and the current time with our Co.

    However, in the manufacturing business i.e. Ironcore Transformers Pty. Ltd., we have a team of long serving employees who have, at various times, taken their L.S.L.and we have not found any difficulties in satisfying all requests.

    Summary, we trust the A.I. findings and support the outcome.

    Thank you for many years of membership support, whenever requested.

    Reply
    1. Stephen SmithStephen Smith (Post author)

      Thanks for your comments Elaine. As you have identified, portable long service leave provisions are well established in the construction industry, and have a long history. However, the extension of portable long service leave entitlements to the manufacturing industry would be extremely costly for Australian companies and a recipe for more plant closures, downsizing and offshoring.

      Reply

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