In the 1860s, the voyage from Australia back to the “old country” took three to four months. For colonial public servants who had arrived here of their own volition, the lengthy journey made home seem that much farther away.
To ease the burden, after 10 years of service, these workers were granted a paid period of extended leave to allow the time to return home by ship to visit family and friends.
The concept of Long Service Leave (LSL) was born as an offering unique to Australian public servants, eventually entering the private sector during the post-war boom of the 1950s.
Today you can fly Perth to London in under 17 hours and as a multicultural nation, the “home country” is often a few hours away by plane.
Yet we still have the LSL model designed for 1860s Australia.
Travel times are not all that have changed since the introduction of LSL. The time allowed for absence from the workplace has grown enormously. Annual leave, sick leave, parental leave, study leave, cultural leave and other bespoke employee offerings have created a far more accommodating and flexible environment.
Current data suggests the average time an employee stays with an employer in Australia is just over three years and only 1 in 4 Australian employees are making the 10-year mark. No boss will be surprised to learn that it is trending down.
For the 25% who make it, more and more are asking to “cash out” their LSL, because the long holiday break is less pressing than an overdue bathroom renovation.
In a country with a chronic productivity crisis, LSL is becoming a bonus payment. A bonus payment for persistence rather than performance.
Isn’t it time we considered whether LSL is fit for purpose in modern Australia?
I’ve been reflecting on LSL because at a time when it seems ripe for review, the Government is doubling down on the benefit. Legislation to introduce Portable Long Service Leave (PLSL) for the Community Services sector in South Australia was passed last year and while the motivation is clear – the sector has many workers working with multiple employers whose ability to offer work is constrained by a grants system or NDIS – ultimately it exists because the LSL model does not work in Community Services.
One could argue that it is not working elsewhere either, and if we are going to focus on sectors that have high mobility of workers, then once PLSL is up and running in Community Services, where next? Security and Cleaning are guaranteed, Hospitality? Retail? It has existed in Construction since 1987. The logical progression would be to make it a blanket offering, given that most employees are not staying longer than three years anyway.
The South Australian Community Services PLSL legislation requires employers to pay into a fund from the day an employee joins the business. Contributing in the knowledge that there is close to zero probability that person will be in that business or even the sector in a decade. There is no opportunity for the employer to accrue funds or put that capital into other areas of the business to generate growth. This will hit businesses already experiencing a cost blowout crisis at a time they can least afford it, with nothing to gain in return.
Suggesting a rethink on LSL is not about removing employee entitlements. It is about recognising that the current model has lost relevance on many levels. Before we entrench a new system, we should explore other ideas that address contemporary issues for both workers and business.
