In Australia and New Zealand, long service leave (LSL) is an employee entitlement to an additional vacation on full pay after an extended period of service with an employer. In Australia, employees are generally entitled to long service leave over and above their annual leave if they work for a particular employer for a certain length of time. A common entitlement in Australia is that employees who remain with the one employer for ten years are entitled to three calendar months' (ninety days) paid LSL, less on a pro rata basis, the longer they stay with that employer. When a worker ceases work with an employer, he or she is usually entitled to be paid the amount of LSL entitlement not taken on termination on a pro rata basis, though usually after a minimum period of service.
It remains one of the great entitlements for working Australians and one that is peculiar to the Australian labour market. The rules governing long service leave entitlements vary for different employees depending on their circumstances and the relevant jurisdiction.
The Institute of Actuaries of Australia estimated that the total value of long service leave benefits in Australia was around $16.5 billion in 2001.
There has been a debate in Australia about the protection of employee entitlements (including long service leave) in the event of employer insolvency, with some high-profile cases involving employees losing benefits that had been accrued.
Nowadays, long service leave is ingrained in Australian culture and is specified by state-based and some federal legislation. It is often not taken when it falls due, leading to calls to reduce long-service entitlement in the public sector.
Workers in Australia are entitled to long service leave based on legislation of the relevant state or territory, as follows:
Within a limited number of industries, such as construction, coal mining, contract cleaning industries and the public sector, it is possible to transfer long-service leave entitlements from one employer to another, as long as the employee remains in the same state. Known as portable long service leave this is done mostly through specific legislated schemes which employers in those industries pay into, and which administer the funds for employees.
The Australian Senate has recently moved to inquire into portable long service leave schemes. The inquiry will be conducted by the Education and Employment References Committee. The committee will consider how portable schemes might be structured and what role the Australian Federal Government might play in helping to establish a scheme. The committee will also have to evaluate the effect that the differing State long service entitlements will have on a national scheme, as the current state based long service leave provisions are all practically different. As of 11 November 2015, the committee had yet to meet and set dates for submissions and reporting.
Long service leave is a benefit peculiar to Australia and New Zealand (and possibly some civil servants in India), and arises from the colonial heritage of each country. There is also a similar system of sabbatical leave in Finland. Long service leave developed from the concept of furlough, which stems from the Dutch word verlof (meaning leave), and its usage originates in leave granted from military service.
In Australia, the benefit was first granted to Victorian and South Australian public servants in the 1860s. The nature of the leave allowed public servants, after 10 years' service, to sail "home" to England or elsewhere, safe in the knowledge that they would be able to resume their positions upon their return to Australia.
Section 37 of the Victorian Public Service Act of 1862 reads: "Where any officer desires to visit Europe or some other distant country if he have continued in the civil service of the colony at least ten years and have not been reduced for misconduct or deprived of leave of absence under this Act the Governor in council may grant to him leave of absence upon half-salary for a period not exceeding twelve months but for such period of absence such officer shall not be entitled to receive any annual increment."
Over the period from 1950 to 1975, the benefit spread beyond the public service, mainly as a result of pressure from non-government employees seeking comparability with public servants.
In the 19th century, furlough as a benefit as it is now known, was a privilege granted by legislation to the Colonial and Indian Services.