State guide
Long service leave NSW: 2 months at 10 years, and the 5 year rule
Updated
New South Wales runs on milestones, and the difference between a payout and nothing at all can be the reason written on a resignation letter.
The entitlement
NSW Industrial Relations states that the Long Service Leave Act 1955 entitles full-time, part-time and casual workers in NSW to 2 months paid long service leave on completion of 10 years' continuous service, and one month of paid leave for each additional 5 years' service. The Act defines a month as 4 1/3 weeks, and the entitlement is measured in weeks rather than days or hours (NSW Industrial Relations).
| Duration of continuous service | Entitlement |
|---|---|
| 10 years | 8.67 weeks (2 months) |
| Each additional 5 years | A further 4.33 weeks (one month) |
| 20 years | 17.33 weeks (4 months) |
Pro-rata between 5 and 10 years
Below 5 years there is no entitlement. Between 5 and 10 years a worker is entitled to a pro-rata payment only if certain conditions are met: the employer terminates for any reason other than serious and wilful misconduct, the worker terminates their own employment on account of illness, incapacity, domestic or other pressing necessity, or the worker dies. At 10 years or more the pro-rata payment applies however the employment ends.
NSW Industrial Relations gives a worked example: an employee who started on 1 November 2009 and whose store closed on 1 May 2015, with more than 5 but less than 10 years of service, terminated for a reason other than serious or wilful misconduct, is entitled to a pro-rata payment of 4.76 weeks. Entering that service period into the calculator on this page returns the same figure.
The bar for a pressing necessity
Where a worker resigns and claims pro-rata between 5 and 10 years, NSW Industrial Relations says the qualifying reason must be the worker's genuine motivating reason, though not necessarily the sole reason, and must be proved on the balance of probabilities. It is explicit that a domestic or other pressing necessity is not simply a lifestyle choice or personal preference. Evidence such as relocation documents, letters of offer, or financial records showing essential commitments is the kind of thing it expects.
Service that counts, and service that does not
- Absence because of illness or injury, paid or unpaid, does not break service and counts towards the service period.
- Agreed unpaid leave does not break service but does not count, so the milestone moves later by the length of the absence.
- Unpaid parental leave does not break service and does not count, unless the worker's contract says it does. Paid parental leave counts.
- Service is broken if the employer terminates and does not re-employ within 2 months, or if the worker resigns, subject to the Act's deeming provisions.
- Where a business is sold and continues as the same business with the worker in it, service with the previous employer counts and the new employer carries the whole liability.
NSW Industrial Relations illustrates the unpaid leave point with an employee who took 6 months of agreed unpaid leave in 2005, did not reach the 10 year milestone on her 10 year anniversary, needed 10 years and 182 days, resigned before completing it and was therefore not entitled to long service leave at all. Two weeks of paperwork, one missed milestone.
NSW Industrial Relations publishes its own Long Service Leave Accrual Calculator, which works from exact dates and from the days of absence that do not count as service. Use it to confirm anything you are relying on.