The advent and increase of working-from-home arrangements have been a feature in certain workplaces for some time but have become noticeably more prevalent because of COVID-19.
Some employers have adopted hybrid models of work, requiring their employees to physically attend the office for a portion of the working week. Other employers have dispensed with office work entirely, and their employees can be found throughout Australia (perhaps travelling in a fried-out kombi) performing remote work. The possibilities of working from home have even led to some employees moving overseas whilst remaining employed (and performing work) for their Australian employer. There are of course a number of workplace issues with working from home:
- Building workplace culture
- Retention and recruitment
- Workplace health and safety
- Mental Illness
- Work and job productivity
- Employee loyalty
- Family and domestic effects
- Management of work-from-home staff
With these possibilities, there are also other technical workplace issues involving interactions with long-service leave entitlements.
What is the position in Queensland?
For most employees, long service leave entitlements are given by way of State or Territory legislation, each with their own nuances. In Queensland, long service leave is provided by the Industrial Relations Act 2016 (QLD) (IR Act). Section 93(b) of the IR Act provides that an employee’s ‘continuous service’ which is used for determining long service leave entitlements can be “with the same employer, whether wholly in the State or partly in and partly outside the State”. Accordingly, by the express language of the IR Act, an employee’s employment can be partly outside of Queensland whilst still retaining an entitlement to long service leave.
Clarity was provided in the decision of Anantapadma v Infosys Limited [2020] QIRC 190, where it was determined that an employee’s employment outside of Queensland must have “substantial connection” with Queensland in order to be counted as continuous service for the purposes of long service leave. In its decision, the Queensland Industrial Relations Commission found the employee in Anantapadma lacked the requisite connection, as he was only temporarily engaged to work in Queensland. His period of employment in Queensland was also short (consisting of 9 months), with his remaining periods of employment taking place in Melbourne and India.
The decision in Anantapadma was subsequently followed in Raman v Infosys Limited [2021] QIRC 275. In Raman, the period of employment in Queensland was also relatively short (consisting of 8 months) and was considered in the factual context of the work arrangements. The Queensland Industrial Relations Commission considered the employer had specifically maintained a cohort of employees capable of being deployed internationally, with each deployment being temporary in nature. Their employment contracts were also jurisdictionally linked to India, instead of Australia.
What is the position in other states or territories, such as New South Wales and Victoria?
The position in New South Wales closely mirrors that of Queensland. In the matter of Australian Timken Pty Ltd v Stone (No 2) [1981] 2 NSWLR 64, the “substantial connection” test was mentioned and it was observed that long service leave would “accrue if at the time the relevant event occurs (that is, completion, termination or cessation) the service which was being performed at that time had a substantial connection with this State”. In practical terms, if an employee was claiming long service leave at the time of termination of employment, the Court’s role was to assess whether their employment as a whole was substantially connected to New South Wales.
The position in Victoria is somewhat nuanced. The decision in Infosys Technologies Limited v State of Victoria [2021] VSCA 219 appeared to doubt the position adopted in Timken (which was applicable in New South Wales). Specifically, it was observed that “improbable and absurd outcomes could arise” if the approach in Timken was preferred. Instead, the Court took the view that a period of employment should not necessarily be treated as an indivisible period. Whether a period of employment counted towards accrual of long service leave entitlements depends on whether it had a substantial connection to Victoria at the time the employment was undertaken.
Accordingly, components of overseas or interstate employment could be excluded from calculating long service leave entitlements, if they had no connection to Victoria. This is a different approach to long service leave in Queensland and New South Wales, which (for now) seems to involve an assessment of the entire employment period when a triggering event (usually termination of employment) occurs. Nonetheless, each of the States accepts that periods of employment outside of the State could count towards long service leave entitlements. We consider this likely extends to capture periods of employment for employees working remotely, whether interstate or overseas.
A practical guide for employers (and businesses)
Assess an employee’s connection with a state or territory
We would suggest assessing an employee’s connection with a specific State or Territory in determining where their long service leave entitlements might accrue. This might involve reviewing the terms of an employment contract to determine which jurisdiction it has been made within.
It might also involve reviewing where profits of the business flow to, or whether instructions to an employee are coming from a particular State or Territory. Where an employer has consented to an employee relocating strictly because of their personal preferences (as opposed to any genuine business requirement), we suggest recording this in writing. We would recommend employers do this for all of their remote employees, particularly where they are interstate or overseas. If required, further advice should be sought regarding the requirements of a specific State or Territory.
Consider the nuances of the relevant state or territory
After determining an employee’s connection with a specific State or Territory, it becomes necessary to consider nuances within the various legislation. As an example, section 4(2) of the South Australian Long Service Leave Act 1987 (SA) may allow an employee with potential long service leave entitlements in different States and Territories to choose which legislation applies. Similarly, a South Australian employee who resigns is usually entitled to proportionate payment of long service leave after seven (7) years of completed service, whereas a Queensland employee may only be entitled if they resign because of illness, or a domestic/pressing necessity. We would recommend factoring in these differences for each employee working remotely.
Document the arrangements in writing
For businesses that have National operations, it is not unusual for employees to be temporarily assisting with operations in another State or Territory. This may come in the form of a secondment, or an assignment to a different team. Where the work arrangements are temporary, we would suggest clearly setting this out in writing to ensure the temporary nature is agreed upon. We recommend recording this as a reasonable and lawful direction (if an employee’s contract allows differing locations of work/different duties), or as a variation to an employment contract (noting an employee’s agreement would be required). Taking these steps may assist with minimising inferences that an employee is substantially tied to a State or Territory.
This article was originally published here and was republished with permission.
Jonathan Mamaril is a Director with NB Lawyers, the Lawyers for Employers, leading the Employment Law and Commercial Law teams. Jonathan assists employers in mitigating risk and liability and advises clients on all aspects of Employment Law. His focus is on being practical and providing value for clients through education and training to help them avoid headaches in the first place; and when a problem does occur, to deal with it properly so it doesn’t become a larger, more litigious problem.