# Which law governs this employee's long service leave entitlement

*This is a benchmarking hypothetical, not legal advice. Law stated as at FY2025-26.*

## Short answer

For a national-system employee who works in **Victoria**, long service leave (LSL) is governed by **State law**, not federal law. The controlling statute is the **Long Service Leave Act 2018 (Vic)**, an Act of the **Victorian (State) Parliament**.

So the **level of government whose law applies here is the State (Victorian) government**, not the Commonwealth, even though the employer is a national-system employer covered by the *Fair Work Act 2009* (Cth).

There is **no single national LSL figure that applies uniformly across Australia.** LSL entitlements differ by State and Territory (and in some industries by a separate portable-LSL scheme). For this Victorian employee the entitlement is whatever the *Long Service Leave Act 2018* (Vic) provides, not a one-size-fits-all Commonwealth number.

## Why State law governs even though the employer is in the national system

The point that trips people up is that being a "national-system employer" under the *Fair Work Act 2009* (Cth) does **not** mean every employment entitlement is set federally. LSL is the standout exception.

1. **The Fair Work Act deliberately preserves State and Territory LSL laws.**
   The *Fair Work Act 2009* (Cth) does not legislate a substantive LSL entitlement for national-system employees in the ordinary case. The National Employment Standards (NES) include an LSL "entitlement", but s 113 of the Fair Work Act expressly defines that entitlement by reference to an **applicable award-derived LSL term** or, where there is none, to the relevant **State or Territory long service leave law**. In other words, the NES point to the State/Territory LSL statute rather than override it.

2. **The Fair Work Act does not exclude State/Territory LSL laws.**
   Section 27(2)(g) of the Fair Work Act lists long service leave among the matters on which State and Territory laws are **expressly preserved** and continue to operate alongside the federal scheme. Section 26 of the Act otherwise excludes many State industrial laws, but s 27 carves LSL out of that exclusion. The result is that a State LSL Act keeps applying to national-system employees in that State.

3. **Constitutional backdrop.**
   The Commonwealth could in principle legislate LSL under the corporations power (s 51(xx) of the Constitution) for constitutional-corporation employers, but it has chosen not to displace the State schemes for the general LSL entitlement. Until it does, the State and Territory Acts remain the operative source of the entitlement.

The practical effect: **where the employee performs the work determines which State/Territory LSL Act applies.** Here the work is in Victoria, so the Victorian Act governs.

## The controlling Victorian authority

- **Statute:** *Long Service Leave Act 2018* (Vic). (This Act replaced the *Long Service Leave Act 1992* (Vic) from 1 November 2018.)
- **Administered by:** the Victorian regulator, the Wage Inspectorate Victoria (long service leave compliance and enforcement in Victoria).

### How the Victorian Act works out the entitlement (FY2025-26)

The *Long Service Leave Act 2018* (Vic) sets the Victorian entitlement (general scheme, outside any separate industry portable-LSL scheme):

- **Qualifying period for an accrued, takeable entitlement:** **7 years** of continuous employment with one employer (s 6). After 7 years the employee can take LSL.
- **Amount of leave:** the entitlement accrues at a rate that delivers **1/60th of the period of continuous employment**, i.e. about **8.667 weeks of paid leave for each 10 years** of continuous service (equivalently, roughly 6.0667 weeks at the 7-year mark). Expressed the way the Act frames it: the amount of LSL is the number of weeks worked out by dividing the period of continuous employment by 60.
- **Pro-rata on termination:** because the Act fixes accrual at 1/60th of continuous service, an employee whose continuous employment is **7 years or more** is generally entitled to a **pro-rata payment on the end of employment** for the LSL accrued and not taken; the 2018 Act also allows pro-rata in defined earlier-termination circumstances. (The detailed termination rules are in the Act.)
- **Rate of pay for LSL:** worked out under the Act's formula using the employee's ordinary pay, with the Act's specific averaging rules for employees whose hours or rate of pay have varied (it takes the greater of several reference-period averages). LSL is paid at this calculated rate, not necessarily the current weekly wage if hours have changed.
- **Continuity:** absences such as paid leave count as service; certain unpaid absences and business transfers are dealt with by continuity rules in the Act so that service is not lightly broken.

The exact number of weeks therefore depends on the employee's actual length of continuous service (and, for variable-hours employees, on the averaging calculation). The governing rule, however, is fixed: it is the **Victorian** Act, at **1/60th of continuous service**.

## Important qualification: portable / industry LSL schemes

The general answer above is the *Long Service Leave Act 2018* (Vic). But Victoria (like other States) also has **separate industry-specific portable LSL schemes** that displace the general Act for workers in those industries. If this employee happens to work in one of those covered industries, the entitlement is set by that scheme instead. The main Victorian portable schemes are:

- **Construction:** *Construction Industry Long Service Leave Act 1997* (Vic), administered by CoINVEST.
- **Contract cleaning, security, and community services:** the **Long Service Benefits Portability Act 2018 (Vic)**, administered by the Portable Long Service Authority.

These are still **State (Victorian) laws** - the level of government is the same answer (State) - but they change *which* Victorian Act does the calculation. If the employee is in an ordinary commercial/office role, the *Long Service Leave Act 2018* (Vic) applies.

## Summary

| Question | Answer |
|---|---|
| Which law governs LSL for this Victorian national-system employee? | Victorian **State** law: the *Long Service Leave Act 2018* (Vic) (or a Victorian portable-LSL scheme if the industry is covered). |
| Level of government | **State** (Victoria), not the Commonwealth. |
| Why not the Fair Work Act? | Fair Work Act 2009 (Cth) ss 27(2)(g) and 113 expressly preserve and defer to State/Territory LSL laws for national-system employees. |
| A single uniform national figure? | **No.** LSL is set State by State; there is no uniform Australia-wide LSL entitlement. |
| Victorian general rule | Entitlement accrues at **1/60th of continuous service** (~8.667 weeks per 10 years); takeable after **7 years**. |

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## Note on approach

The task asks a precise legal-identification question rather than a single computed figure, so the core of the answer is the **controlling authority and the level of government**, with the working that shows *why* State law wins over the federal scheme.

Reasoning steps:

1. Identify the trap: "national-system employer under the Fair Work Act" suggests federal law governs everything. For LSL it does not.
2. Locate the federal carve-out: the *Fair Work Act 2009* (Cth) preserves State/Territory LSL laws (s 27(2)(g)) and the NES LSL entitlement (s 113) points back to State/Territory LSL law / award-derived terms rather than setting its own substantive figure.
3. Apply the connecting factor: the employee works in **Victoria**, so the Victorian LSL statute applies, which is the *Long Service Leave Act 2018* (Vic) (the 2018 Act having replaced the 1992 Act).
4. State the Victorian rule (1/60th of continuous service; takeable at 7 years) so the entitlement is concrete, while being explicit that the exact weeks depend on length of service and the Act's pay-averaging rules.
5. Flag the qualification that Victorian industry-specific portable schemes (construction / CoINVEST; cleaning-security-community services / Portable Long Service Authority) can displace the general Act - still State law, so the "level of government" answer is unchanged.
6. Directly satisfy the prompt's two explicit constraints: (a) do **not** give a single uniform national figure (because LSL is State-set), and (b) **name the level of government** (the **State / Victorian** government).