Two employees who mainly worked in India not entitled to long service leave entitlements

In a recent judgment of the Court of Appeal of Victoria (the Court), the Court held that two employees were not entitled to long service leave (LSL) entitlements because they primarily performed their work outside of the State of Victoria (the State).

In Infosys Technologies Limited v State of Victoria, the Court was required to determine whether two employees, who had served the considerable majority of their employment in India, were entitled to LSL pay following resignation from their employment with Infosys Technologies Limited (the Company).

Background to the Claim

The Company engaged the first employee for a total period of 9 years and 3 months. That employee served the Company for 2 years and 2 months in the State, with the remaining time served in India. The Company engaged the second employee for a period of 12 years. Only 2 years and 8 months of that time were in the State, the remaining service also in India.

Upon their respective resignations from the Company, the employees had not received LSL entitlements. As a result, the employees lodged a complaint with the Wage Inspectorate of Victoria (WIV) about the Company and its alleged failure to pay LSL entitlements to them. Following a demand from WIV to pay the first and second employees their LSL entitlements, the Company sought declarations from the Court as it believed it had no such obligation under the Long Service Leave Act 2018 (VIC) (the LSL Act).

State’s Argument

The State argued that the employees’ employment fulfilled the continuous service test under section 6 of the LSL Act, which entitles employees to LSL entitlement following seven years of continuous service. However, the Court ultimately rejected the State’s view that LSL entitlements were available to the employees. Looking to the relevant rules which apply to interpreting the LSL Act, the Court held that section 6 of the LSL Act (like all other Victorian legislation) must have a “sufficient territorial connection” and that continuous employment means employment ‘in and of’ the State, for the purposes of the LSL Act.

Result

LSL entitlements, and when they are available to employees, can be tricky territory for employers to navigate, as seen in this case. It is important to note that the relevant rules vary from state to state, with limited uniformity in the approach to LSL entitlements. If you have any questions about LSL entitlement obligations, please contact Nick Stevens, Luke Maroney, and Daphne Klianis.