What is continuous employment?

There are many absences from work that count towards an employee’s continuous employment where an employee fully accrues their long service leave entitlement after 20 June 2022. This includes all forms of paid leave and public holidays.

Absences that count towards an employee’s continuous employment are:

• periods of paid annual leave
• periods of paid long service leave
• periods of paid personal leave, sick leave or carer's leave
• periods of parental leave for which the employee has received payment (whether from the employer or the Australian Government under its parental leave pay scheme)
• periods of paid compassionate or bereavement leave
• periods of paid family and domestic violence leave
• any other form of leave provided as part of the employee’s employment, including leave authorised by their employer or provided in legislation or in an award, agreement or contract of employment, for which the employee has received payment
• paid public holidays
• any period following the termination of the employee by their employer irrespective of the duration, if this was done by the employer with the intent of avoiding their long service leave or annual leave obligations
• service with the Defence Forces Reserves, whether paid or unpaid.

An employee’s period of employment with a previous owner of a business is also counted as part of their period of employment with the new owner where there has been a transfer or transmission of the business. Learn about changes of business ownership.

Where an employee fully accrued a long service leave entitlement prior to 20 June 2022, the absences that count towards continuous employment are outlined on long service entitlements accrued pre-June 2022.

The information in this section does not apply to casual employees. Visit long service leave for casual and seasonal employees for information about continuous employment for these employees.

Some types of absences do not count towards an employee’s period of continuous employment. This includes most forms of leave for which the employee has not received payment, such as unpaid carer’s leave or leave without pay.

These absences will not break an employee’s service for long service leave purposes, however they will not count as time worked when calculating the length of continuous employment.

Where an employee fully accrues a long service leave entitlement after 20 June 2022, the absences that do not count towards continuous employment for long service leave accrual are:

• periods of leave for which the employee has not received payment. For example, a period of unpaid carer’s leave or leave without pay;
• any period between employment where the employer terminates an employee for a reason other than slackness of trade but then re-employs them within 2 months of the termination;
• any period between employment where the employer terminates an employee due to slackness of trade but then re-employs them within 6 months of termination;
• any period when the employee was stood down by their employer in accordance with an award, agreement, order or determination. Please note the situation may be different if a stand down was based on a JobKeeper enabling stand down direction;
• any period during a transfer or transmission of business where the employment of an employee of the old employer has terminated and the employee has not yet been employed by the new employer;
• any absence arising directly or indirectly from an industrial dispute if the employee returned to work in accordance with the terms of settlement of the dispute;
• any reasonable absence on legitimate union business for which the employee has requested, but been refused, leave;
• any gap between the completion of an employee’s apprenticeship or traineeship and the employment of the employee on a new contract of employment; and
• other types of absences authorised by the employer which are not listed above.

If an employee has had any of these types of absences, the period of the continuous employment is reduced by the length of the absence.

Although these absences do not count as part of an employee’s period of employment for long service leave, they will not break an employee’s continuity of employment.

Where an employee fully accrued an entitlement to long service leave prior to 20 June 2022, the absences that do not count towards continuous employment for long service leave accrual are outlined on long service leave entitlements accrued pre-June 2022.

FIFO employees may work rosters where they perform work on some weeks (‘on weeks’) and do not perform work in other weeks (‘off weeks’).

Off weeks will generally count towards continuous employment for long service leave accrual, as they are not a form of unpaid leave and the employee's employment has not ended.

However, whether a particular FIFO employee has completed the required period of continuous employment will always depend upon the circumstances of their employment.

Where an apprentice or trainee completes an apprenticeship or traineeship with an employer and continues to be employed by the employer, their period of employment as an apprentice or trainee counts as part of their period of continuous employment for long service leave accrual.

Sometimes there might be a gap between an employee completing their apprenticeship or traineeship with an employer and then being employed by that employer. If an employee enters into a contract of employment with an employer within 52 weeks of completing an apprenticeship or traineeship with that employer, the gap does not break the employee’s continuous employment. However, any gap between the completion of the employee’s apprenticeship or traineeship and the employment of the employee on a new contract of employment does not count towards the employee’s period of continuous employment for long service leave accrual.

Example

Carlos completes a mechanical apprenticeship with a vehicle repair business. When Carlos completes his apprenticeship he ceases working for the employer, as the business cannot afford to keep him on. However, 6 months later, the business has recovered financially, and it hires Carlos as a qualified mechanic.

As Carlos has entered into a contract of employment with his employer within 52 weeks of completing an apprenticeship with it, the period of the apprenticeship is taken to be part of his continuous employment. However, the 6 month period where he was not working for the vehicle repair business does not count when calculating the length of his period of continuous employment.

From 20 June 2022, an employee's service with related body corporates is considered to be a part of the employee's period of continuous employment with the same employer. However, this provision only applies from 20 June 2022, which can affect an employee’s long service leave accrual.

Service with related body corporates prior to 20 June 2022 does not count towards an employee’s continuous employment.

‘Related body corporate’ has the same meaning as defined in section 9 of the Corporations Act 2001 (Cwth). An employee's service with a related body corporate is considered to be a part of the employee's period of continuous employment with the same employer.

Example 1

An employee transfers from ABC Construction to XYZ Construction on 1 July 2019. Both of these businesses are related body corporates. Only the employee’s service with XYZ Construction from 1 July 2019 will count towards long service leave accrual.

Example 2

An employee transfers from AAA People Consulting to ZZZ People Consulting on 1 September 2022. Both of these businesses are related bodies corporate. Only the employee’s service with AAA People Consulting from 20 June 2022 will count towards long service leave accrual.