Long-term staff are invaluable, and in recognition of their continuous service over a ten year period are entitled to long service leave payments.

Since the Long Service Leave Act 1987 came into effect in 1988, calculations to how payment for long service leave is calculated in South Australia have remained unchanged.

However, recent amendments have been made to the Act, directly affecting the way that average weekly hours are now calculated.

Effective from 1 January 2009, employers need to be aware of the small but significant amendments which affect the calculation payment process for staff taking or cashing out their long service leave on or after this date. In particular:

• All paid leave is now considered as time worked.
• A whole week of unpaid leave is not considered as time worked.
• A 'rolling' average has been introduced, which means the averaging period is taken to be the last 12 months or three years of actual service (depending upon the circumstances) after unpaid leave is disregarded.

Based on the new calculations, when averaging the hours worked, a total of 156 weeks worked, including paid leave, must be calculated.

For example, if an employee had three months unpaid leave during the last three year period prior to taking long service leave, the average hours needed to be calculated would be over the three years and three months of actual work or paid leave.

For information contact your industry group applicable to your state.