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Employers face extra costs, excessive admin under proposed changes to long service leave

The proposed new Long Service Leave Bill 2017 will disadvantage employers and create a significant administration burden for businesses, according to the Victorian Chamber of Commerce and Industry.

The Victorian Chamber is calling for Parliament to amend parts of this Bill because the changes will result in increased costs and additional obligations for employers.

Victorian Chamber of Commerce and Industry Chief Executive Mark Stone AM said employers would face extra costs, increased penalties and be required to adhere to a new record keeping obligation with extra complexity when calculating entitlements.

“Long service leave was invented in the mid-19th century to allow citizens to sail to and from England every decade, a journey that could take up to four months. This is clearly not a problem for today’s workers.”

“While it is reasonable to seek to bring long service leave legislation up to date and make it easier to administer, efforts to ‘modernise’ long service leave should not be used as an excuse to increase benefits to employees, without considering that employers will bear the cost,” he said.

“It is vital that changes are not retrospective.”

Key changes that will disadvantage employers are:

·Retrospectively allowing long service leave payments to be based on hours of work averaged over the period of continuous employment. This will create a significant administrative burden to calculate entitlements for workers with variable hours and a long period of employment.

·Changes to the treatment of parental leave that will increase the cost to business.

·Significantly increasing penalties for non-compliance and changing some penalties from civil to criminal penalties.

 “It is important to keep our legislative frameworks up to date, but we also should recognise that in today’s workplace 75 per cent of employees do not remain with a single employer long enough to become eligible for long service leave,” Mr Stone said.

“We are also concerned that as unemployment in Victoria has recently risen to 6.1 per cent, the proposed changes to long service leave will hamper Victorian employers’ efforts to create jobs and threaten business competitiveness.

“We urge the Parliament to reconsider parts of this Bill that place an unnecessary onus on business, in particular, allowing long service leave payments to be based on average hours of work over the entire period of continuous employment.”

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For all other enquiries, please contact the Victorian Chamber on (03) 8662 5333.