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A pressing necessity: Payment of pro rata long service leave

A pressing necessity: Payment of pro rata long service leave

In some States and Territories, long service leave legislation provides for a pro rata long service leave payment in certain circumstances upon termination of the employee’s employment.

In New South Wales, for example, there’s a pro rata entitlement where an employee has served at least five years but less than 10 years of continuous employment with an employer, and the termination is on account of “illness, incapacity or domestic pressing necessity”.

So what constitutes a “pressing necessity”? Unfortunately, there’s no simple answer.

Generally speaking though, an employer should ask themselves if resignation is the only reasonable option for the employee in the circumstances.

In many circumstances, the cause for the pressing necessity to resign may be due to domestic pressures. The key word is “necessity” and the courts will view it from the employee’s perspective.

Previous decisions provide the key criteria to be considered when assessing whether the resignation was due to domestic or other pressing necessity. These criteria are:

  • Was the reason genuinely held by the employee and not simply colourable or a rationalisation?
  • While not the sole reason for resigning, was it the real or motivating reason?
  • Was the reason such that a reasonable person, in the circumstances in which the employee was placed, might have felt compelled to terminate their employment? What would be the consequences if the employee did not take that course of action?

Examples of circumstances in which an employee was deemed entitled to pro rata long service leave due to domestic or other pressing necessity include:

  • An employee’s spouse was transferred intrastate and resigned as a consequence
  • An employee resigned to be the primary carer of a child, rather than the child being place in child care
  • The stressful nature of the job, which forced the employee to resign.

 

Jurisdictions other than NSW

Similar terms referring to an employee’s resignation due to domestic or other pressing necessity exist in long service leave legislation in Queensland, Tasmania, Northern Territory and the Australian Capital Territory. It could reasonably be expected that courts and tribunals in those jurisdictions would apply the above criteria when considering the “domestic and other pressing necessity” issue.

Legislation in Victoria, South Australia and Western Australia provide an entitlement to pro rata payment after completing the specified qualifying period irrespective of the reason for the resignation.

 

Call REEF

If you have questions about long service leave, call the REEF Helpline on 1300 616 170. Our team of experienced Workplace Relations Advisors is on hand to help.



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The Real Estate Employers' Federation is the real estate industry’s leading not-for-profit employer and workplace relations advisory association. It has more than 1600 members and subscribers across Australia.

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