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Inquiry into the Portability of Long Service Leave entitlements Analysis

Inquiry into the Portability of Long Service Leave entitlements

The Economic, Education, Jobs and Skills Committee of the Victorian Parliament is inquiring into the portability of long service leave entitlements in Victoria. The broad terms of reference to the Inquiry have seen submissions covering a range of industries and organisations. Employer bodies, trade unions and community sector peak bodies have made submissions. A few individuals have made submissions highlighting their own experience.  

Improving portability of long service leave entitlements within the Victorian community services sector has the potential to benefit to community service employees.  For a very large number of Victorians the social sector will be their future industry of employment. They will start and end their lives working in a rapidly growing industry[1]. This may also assist community sector organisations to attract and retain employees within the sector. Social services will be one of the most important contributors to economic growth and employment in the decades ahead[2].

Employer organisations generally oppose the introduction of portable long service leave, arguing that long service leave is a relic from nineteenth century British colonialism[3] and, if implemented would be a major cost to employers likely to lead to the significant reductions in employment.

Trade unions have argued that the changing nature of work has meant that people no longer work for a single employer for long periods but may work in the same industry. Unions highlight successful portable long service leave scheme in contract cleaning and the building and construction industries.

While the Inquiry has broad terms of reference covering all industries and employees, it has a specific reference to a portable long service leave for the community sector. This is not the first time the Victorian Parliament has considered the portability of long service leave for the community sector. A Bill for a community sector scheme was introduced into the Victorian Parliament in 2010. This Bill never went beyond the second reading speech in the Legislative Assembly.

Prior to the Bill’s introduction into Parliament, commissioned research and consultation into the scheme highlighted the widespread, but not universal, in-principle support for a community sector portable long service leave scheme. However, there was concern that the cost of the scheme would impact on the financial position of community service organisations. These concerns remain today.

VCOSS consulted with interested members and prepared a submission to the Inquiry that considered the benefits and risks of a community services sector portable long service leave scheme. It is clear that the benefits of a portable long service leave scheme accrue to community employees who move employer but stay within the sector. Benefits to community sector organisations are less certain. Community organisations will only benefit if the portable long service leave scheme encourages sector workers to remain in the sector.

Changes since 2010 would make the introduction of a scheme harder. For example, the introduction of the National Disability Insurance Scheme (NDIS) and aged care reforms makes it harder for the Victorian Government to compensate disability and aged care services for the cost of the scheme as they will no longer be the direct funder of organisations. The cost of implementing any community sector scheme will be higher now than in 2010.

A skilled and experienced community sector workforce is vital to the wellbeing of many people facing disadvantage. Whether a portable long service scheme will assist in maintaining and expanding such a workforce remains to be seen.

[1] Hayward, D. ‘Shifting from Social Provision to Social Investment’ Insight Vol 13, pp 8-11.

[2] Ibid

[3] For example, see Submission No. 42 from the Australian Chamber of Commerce and Industry