Long Service Leave (Victoria)-Clarity provided regarding the calculation of overseas and interstate service

The recent Victoria Court of Appeal decision ofInfosys Technologies Limited v State of Victoria[2021] VSCA 219 has helpfully clarified that an employee's overseas service does not count as service under theLong Service Leave Act 2018(Vic) if the service has no connection to Victoria at the time it is undertaken.

This overturned the previous position held by the Wage Inspectorate of Victoria that overseas service is counted if the employee's service has a substantial connection to Victoria at the time the entitlement to long service leave crystallises.

The Court of Appeal recognised that the earlier position would lead to the absurd position that an employee with long term overseas service could become entitled to LSL simply upon returning to Victoria.

The decision should not be taken as meaning that overseas or interstate service can never count as service for the purposes of LSL accrual in Victoria.Helpfully the Court of Appeal provided some examples where the overseas or interstate service would be counted.These include:

• an employee with a contract of employment created in Victoria managing the company’s operations in another state;

• performing employment for a Victorian company giving directions for the performance to be performed outside of Victoria;

• secondment to a related body corporate outside Victoria

Whilst the decision provides ‘technical clarity’ the practical realities of some employment arrangements are not always so clear.Accordingly, rather than establish a ‘blanket rule’ we recommend that you still make ‘paper provision’ for the service to count but then make a more detailed assessment nearer to the time of crystallisation with the likelihood that any interstate of overseas service without a Victorian connection will not count.