Chamber Calls on Assembly to Reject Portable Long Service Leave Legislation

7 April 2016

MEDIA RELEASE

The Canberra Business Chamber has called on all Members of the Legislative Assembly to demonstrate an understanding of business realities and vote down the illogical portable long service leave amendments due to come before it shortly.

“This bill goes against the very principle of long service leave – that it is a reward for an individual’s loyalty and length of service with a single employer,” Canberra Business Chamber CEO, Robyn Hendry said.

Under ACT Government legislation, a number of industries have portable long service leave schemes. These are construction, cleaning, security and the community sector.

A portable scheme means workers can move from employer to employer without losing credit for time worked in the covered industry.

The ACT Government plans to introduce an amendment bill to extend the portable long service leave scheme to the aged care and waste disposal sectors.

“While the Chamber can in part understand the ACT Government seeking a mechanism to support people working in highly transient industries, especially if moving from employer to employer is often not the choice of the employee, but rather, by way of example, is a result of a project finishing.” Ms Hendry said.

“However, the Chamber is strongly of the view that this arrangement should not be extended to the aged care sector, which traditionally has not had a comparatively transient workforce. Businesses operating in this field tell us this will cost them millions of dollars a year.”

The Chamber is concerned this change will encourage employees to change employers more frequently as they will have no incentive to strive to achieve long service with a single company. The resulting staff turnover and employment costs could be significant, especially for smaller companies.

“Perhaps the most alarming outcome is that businesses will have to invest significant funds into long service leave, but if their employee completely leaves the sector and never achieves long service in that industry, they do not get these funds back. The funds don’t go to the employer or even the employee, but back into consolidated revenue. This is essentially a government tax on this industry sector at the expense of jobs and business.

“Businesses owners support the idea of money being put aside to ensure those employees who earn long service are looked after. However, under this measure they are essentially being asked to pay a long service contribution for anyone they ever employ – even if that employee never reaches long service eligibility. It makes no sense.”

“A National Portable long service leave scheme is currently being examined by the Senate with a view to introducing a uniform standard for all employees,” This proposal would represent a massive impost on doing business in Australia. Submissions have also been made to the current Victorian Inquiry into the portability of Long Service Leave entitlements, which in Victoria alone is estimated to cost over $4 billion per annum. The proposed extension of the ACT Scheme would cost employers in the Aged Care and Waste industries over $2, million dollars per annum.

Ms Hendry concluded. “We think the ACT Government should hold off on making changes until that process is complete.”

 

Media Contact: Robyn Hendry, CEO Canberra Business Chamber 0418 462 151