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Is it time to leave long-service leave behind?

Angela Catterns
Friday, October 09, 2015

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By Angela Catterns

The proprietor of this information and discussion website, the excellent Mr Peter Switzer asked in his column yesterday: 

Why don’t we ask the country for commonsense suggestions about tax concessions and excessive government payments that could be changed so more and more Australians can contribute to being a part of our economic solution?

If it’s true that everything’s on the table, I’d like to suggest that while we’re looking at penalty rates, we should also take a look at long-service leave.

Unique to Australia, this workplace right originated in the 1860s as a scheme that allowed some civil servants several months leave to go home to Britain after they’d served 10 years in the colonies. Given the only way they could get there was by ship in those days, a substantial period off work was necessary to make the voyage to Europe and back. Since then, aeroplanes have been invented, thousands of daily commercial flights take place all over the world, so home-sick workers can now return to the Old Country in as little as 22 hours. 

Let’s face it. Long-service leave is an anachronism. 

In today’s Australia, a job for life or even for 10 years, is a rarity rather than the norm. On average, we hold three jobs per decade. While it’s the case that those under 25 can rightly be called job-hoppers, the bulk of the workforce is following their example, with more retraining, career-changing, home-moving and shifting to self-employment and back again. There are more temporary staff, contractors, more parents looking for flexibility and more of us happy to leave a job and try out something else, and explore other avenues and take up new challenges. Which means of course we’re less likely to rack up long service leave.

To qualify for long service leave, an employee typically needs to work for 10 years in the one place. In many cases, it becomes the reason for staying in a job. Without long service leave to look forward to, some workers have no other incentive to keep going to work each day.

In my long and varied career, I’ve worked with people in the public sector who really are just marking time. They hold down jobs that other people would kill for, they do the least amount of work required, they keep their heads down and wait. And wait. Until the magic 10 years has been reached and they can take off 3 months at full pay or 6 months at half pay to finally do something with their lives that they really want to do. 

In some industries, like construction and contract cleaning, it’s possible for workers to take their accrued benefits with them from job to job. Now there’s a push for portable long-service leave to be extended to many more workers so they can take their accrued benefits with them wherever they go. Opponents say the proposal will add a further layer of cost and complexity to businesses.

So perhaps we should be thinking about creative alternatives to this old entitlement. Maybe there could be new ways of rewarding loyalty at work. After all, the reality is that not all workers actually take their long service leave on completing the required 10 years. Many use the money as a de facto redundancy payment, to cover living expenses while looking for another job. So much for loyalty!

One idea is to link the amount of annual leave to continuity of service.

Another is something like Norway’s system where annual leave is 5 weeks and an extra week’s leave is given to workers who turn 60. 

I love that idea. But unfortunately, it’s known locally as ‘the senility week’! 

Published: Friday, October 09, 2015

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