Long Service Leave Versus Portable Schemes

What it is

Two different long service entitlements can attach to the same carpenter at once.

The first is state long service leave, under each state's general long service leave Act. It accrues with one employer, over 7 to 10 years depending on the state, and it is the employer's liability.

The second is portable long service leave: a construction scheme that records service across the industry and follows the worker between builders.

The question is different in every state. Does a portable payment discharge the employer's state liability, or sit on top?

The short answer

Nowhere does a worker lawfully get paid twice. But jurisdictions block double recovery in three different ways, and the way decides who wears the cash and whether you still carry a liability.

• Substitution. The state Act is switched off for covered workers. Victoria and Tasmania.
• Election, then reimbursement. Both Acts apply. The worker picks one. If they pick the employer, the employer pays and claims back. New South Wales, Queensland and the ACT.
• Parallel accrual. Both genuinely accrue. The employer can become liable and then recovers from the board. Western Australia.

Victoria and Tasmania: the state Act is off

Section 5 of the Long Service Leave Act 2018 (Vic) switches the Act off for an employee "entitled under the Construction Industry Long Service Leave Act 1997 to long service leave and to be paid benefits out of the fund".

That is the cleanest position in the country. Nothing accrues behind the 2.7 per cent of ordinary pay paid to the scheme each quarter.

Tasmania gets there from the scheme side. Section 10 of the Construction Industry (Long Service) Act 1997 (Tas) says a period registered with the company is not counted towards any long service benefit under any Act, award or agreement.

South Australia separates the two by capacity. The Northern Territory bars claiming both outright.

New South Wales and Queensland: the worker elects, you claim back

Both are project levy schemes, paid once, on the project, before work starts. It is tempting to assume the levy bought out the liability. It did not.

The NSW Long Service Corporation is explicit that building and construction workers are covered by the BCILSP Act 1986 as well as the LSL Act 1955. A worker with 10 years at one builder is entitled under both, but "they can only be paid 1 long service benefit depending on which option they select".

If the worker takes the portable payment, the employer has no further liability for that period. If they take leave from the employer instead, the employer pays and claims reimbursement, having notified the Corporation before paying and lodged within 2 years.

Queensland is the same architecture. Section 61 of the Building and Construction Industry (Portable Long Service Leave) Act 1991 (Qld) says a registered worker is not entitled to be paid long service leave for a period if they have taken or received "benefits in the nature of long service leave (however arising)". Section 62 is the reimbursement. The state entitlement under section 95 of the Industrial Relations Act 2016 (Qld) is 8.6667 weeks at 10 years.

QLeave puts it in one sentence: "If a worker chooses to claim with QLeave ... you have no further liability under the Industrial Relations Act 2016 for that particular period of employment."

If a worker chooses. The discharge turns on the election. Until they elect, you have both.

Western Australia: both accrue

MyLeave says an employee registered in the scheme may continue to accrue long service leave under the Long Service Leave Act 1958, so "an employer in some cases may become liable to pay long service leave entitlements to an employee". The employer then claims a recovery from MyLeave under section 51 of the Construction Industry Portable Paid LSL Act 1985 (WA).

The two do not measure the same thing. The LSL Act 1958 counts continuous employment with one employer; MyLeave counts 220 day service years across the industry. A builder already contributing every quarter can still cop a state Act claim on top.

What this costs, and what to do

In every reimbursement jurisdiction the recovery is rate-capped. NSW payments exclude over award payments. QLeave caps the claim on a 38 hour week. WA recovers on the worker's average ordinary rate over their last 220 service days. An above-award builder is never made whole.

The practical rule: provision nothing in Victoria and Tasmania, and carry a provision in NSW, Queensland, the ACT and WA. In the election states, release it only when the worker actually elects the scheme. And never pay a long service entitlement before notifying the scheme, or you can lose the reimbursement.

On termination, state pro rata typically opens at 5 to 7 years. Portable service is not paid out when a worker leaves one builder, because it follows the person. In WA it is extinguished entirely if they leave the industry before 7 years.