People + Culture Strategies

In a previous article, we wrote about the decision of Venier v Baker Hughes Australia Pty Ltd[1] in Western Australia, and its effect on long service leave entitlements when an employee has lengthy overseas service with related entities. The employee in that case was employed by various associated entities outside Australia before commencing work in Australia.

In summary, the decision at first instance interpreted the meaning of “one and the same employer” under the Long Service Leave Act 1958 (WA) (the “LSL Act WA”) broadly, finding that prior overseas service with an associated entity counts towards the employee’s length of continuous service with their Australian employer for the purpose of calculating their entitlement to long service leave.

That decision has subsequently been appealed, with the decision at first instance being overturned.[2] The decision on appeal turned on the meaning of the phrase “one and the same employer” in section 8(1) of the LSL Act WA. Notably, the legislation in WA is drafted in different terms to the prevailing legislation in other States, particularly in New South Wales and Victoria, which provide for continuous service with “related corporations”.

The appeal judgment considered at length the relevant principles of statutory construction and the history of amendments to the LSL Act WA in assessing the nine grounds of appeal and whether the decision at first instance should stand. The judgment also briefly considered the wording used in other States and noted that those States “which used the phrase ‘one and the same employer’ amended their legislation to provide that service with related or associated bodies corporate be included in the calculation of any entitlement to long service leave.” [at 42].

The appeal judgment found that the phrase “one and the same employer” should not be given a liberal interpretation and should be construed according to the statutory text which is paramount. It therefore found that the phrase is a reference to a single legal entity and that employment with a related body corporate is not an implied exception to the requirement that employment must be ‘for one and the same employer’. This means that continuous employment is employment served with a single employer, rather than extending it to related employers. The initial decision therefore went too far in its interpretation of the legislation by reading words into the Act to “fill the gap” in an effort to accord with entitlements in other States. It further found that there is nothing in the text of the LSL Act WA which evinces an intention to lift or pierce the corporate veil to find that a corporate body is in fact the employer, despite the fact that another company claims to be the employer.

In WA therefore, this decision indicates that there is no statutory right to have overseas service recognised with related bodies corporate for the purpose of calculating an employee’s long service leave entitlements.

Ultimately, the treatment of service in jurisdictions outside of Australia needs to be considered in the context of the relevant governing long service leave legislation. In the case of WA, this case stands for the proposition that only service with a single employer will count towards an employee’s length of continuous service for the purpose of their entitlement to long service leave. In other States, for example in NSW, in addition to the issue around the nature of the relationship between the employing entities, consideration also needs to be given to the territorial application of the provisions, which has previously been interpreted to mean that service with the employer must have a “substantial connection” with NSW at the time the entitlement to long service leave crystallises.

Given the idiosyncrasies which exist between the States it is imperative that employers assess each employee’s service according to the prevailing circumstances in question.

If your organisation requires assistance with this process, please feel free contact People + Culture Strategies on (02) 8094 3100.

[1] 2016 WAIRC 00210

[2] 2016 WAIRC 00843