Key Takeaways from Wipro v State of NSW: Long Service Leave and Out-of-State Work Experience
The recent NSW Court of Appeal decision in Wipro Limited v State of NSW has departed from the longstanding interpretation of the Long Service Leave Act 1955 (NSW).
The Background
The employee in this case the applicant sought to claim long service leave pay after working for 11 years at Indian IT corporation, Wipro. He worked at Wipro’s Indian entity for 6 years and then worked in NSW for nearly 5 years before resigning from his employment.
Wipro refused to pay the employee a long service leave payment on the basis that the applicant did not work long enough in NSW to claim leave.
If the employee’s period of service in India was recognised as continuous service with Wipro in NSW, the employee would have been entitled to long service leave. If the service in India was not recognised, the employee would not receive any long service leave.
The Decision
The question for the court was whether to recognise the period of service completed in India for the purpose of long service leave.
The Court held that the employee’s service in India would not be recognised as a part of his continuous service to Wipro in NSW, as the period of service in India was not “substantially connected” to his work in NSW. As a result, it was found that the employee was not entitled to any long service leave and the employee’s case was dismissed.
Key takeaways
The judgement is important for any employee who has worked outside of NSW for some time during their employment at a company, whether overseas or within Australia, and wishes to claim long service leave. The Court of Appeal has held that these employees will not have their outside of NSW service recognised when their long service leave is calculated. The exception to this is if the employee can demonstrate that they had a “substantial connection” with NSW at that time.
There are a number of factors that can be considered in determining whether an employee had a “substantial connection” with NSW during their out of state service. Such factors may include:
• Whether the employment contract was prepared in NSW,
• Whether the employee was being directed by a NSW employer,
• Consideration of a secondment agreement where an employee was seconded to a related entity outside of NSW,
• Whether the out of NSW work was intended to be for a short period of time,
• If there was a team member in NSW to report to or have responsibility for.
In order for this “substantial connection” to be factored into long service leave, it needs to be assessed at the time the employee is still employed and not retrospectively after the employee is terminated.
These changes mean that NSW is aligned with Victoria state regulations after the decision in Infosys Technologies Ltd v State of Victoria (2021) (‘Infosys’). In Infosys, a similar finding was made for a worker who served part of their employment with a company overseas, and the rest of their employment was served in Victoria. The overseas period of service was not counted for the purposes of determining the long service leave entitlement under Victorian long service leave legislation.
If this article raises any questions for you, please do not hesitate to contact Nick Stevens, Peter Hindeleh, Daphne Klianis or Josh Hoggett who will be able to provide you specific advice in line with the state based long service leave legislation and relevant case law.
