Given the volume and complexity of legislation governing employment in Australia, correctly managing employee entitlements can be challenging.
The circumstances under which an employee in New South Wales can access pro-rata long service leave (LSL) payments on resignation is no exception. One particular challenge in this instance stems from the legislation’s use of the term “domestic or other pressing necessity.”
So just when can an employee in NSW who resigns for personal reasons access pro-rata long service leave? Let’s break down the essentials, highlight some relevant rulings, and outline what you need to know as a small business leader.
The Legal Framework: NSW Long Service Leave Act
Under the NSW Long Service Leave Act 1955, employees who have completed between 5 and 10 years of continuous service may be entitled to a pro-rata LSL payout if they resign due to:
- Illness or incapacity, or
- “Domestic or other pressing necessity.”
While illness and incapacity are relatively straightforward, “domestic or other pressing necessity” is less clearly defined. Indeed, the Act doesn’t spell out exactly what this means, which has left the courts to consider the meaning and application of the term on a case-by-case basis.
So What Has “Domestic or Other Pressing Necessity” Come to Mean?
Based on the way it’s been applied, the phrase has broadly come to mean personal circumstances that genuinely compel an employee to resign. It’s not about the employee simply wanting a change, but about them being forced to leave due to significant personal or family reasons.
Examples of when it’s been ruled that “domestic or other pressing necessity” has applied, include cases in which an employee resigned:
- to care for a seriously ill family member
- because ongoing night shifts, despite the employee’s repeated requests for day shifts, were causing severe disruption to family life
- due to the breakdown of essential childcare arrangements and the employee’s apparent inability to make other arrangements, and
- because their spouse had been relocated for work interstate or overseas.
Note that the full circumstances of each case need to be taken into account (as below), so an employee who resigns for the reasons mentioned above may not in all cases have an entitlement to pro-rata LSL.
So What Factors Do Courts Take Into Account?
When a dispute arises, courts will consider a range of matters relevant to each individual case, including:
- Does the reason for resignation fit the categories in the Act?
- Is the need to resign genuine, or just a convenient explanation?
- Was the necessity a real and motivating factor?
- Would a reasonable person in similar circumstances feel compelled to resign?
The burden is on the employee to provide evidence, such as medical certificates or documentation of changed family circumstances, that sufficiently demonstrate a real and pressing necessity.
What Should Employers Do?
If an employee with between 5 and 10 years service resigns citing “domestic or other pressing necessity” or otherwise indicates their expectation that they are due a payment for pro-rata LSL, you’re entitled to request supporting documentation before making a decision. If in doubt, seek advice, as incorrectly denying a legitimate claim could lead to a time-consuming and costly dispute.
Key Takeaways for Small Business Owners and HR Managers
- “Domestic or other pressing necessity” is interpreted on a case-by-case basis.
- The necessity must be genuine, significant, and leave the employee with no reasonable alternative but to resign.
- Always document the circumstances and, if the employee is seeking payment of pro-rata LSL, seek evidence before making a decision.
- When in doubt, consult with an HR specialist or legal advisor to avoid compliance pitfalls.
A Couple of Further Notes
While this article seeks to clarify matters related to payment of pro-rata LSL for a NSW-based employee who resigns with between 5 and 10 years of service, it’s important to note that an employee with that same level of service will be entitled to pro-rata long service leave if they:
- are dismissed for a reason other than serious and wilful misconduct; or
- pass away.
This article is relevant to NSW-based employees only. LSL entitlements arise from state-based legislation, so be sure to separately check entitlements relating to staff in other states or territories.
Need Help?
If you’re unsure about an employee’s entitlements relating to LSL or other matters, feel free to get in touch, we’re here to help.
This article provides general information which we believe to be correct at the time of posting. It is a summary and must not be considered complete, professional or legal advice. If you’re an employer and need support that takes into account your particular circumstances, please contact us directly.
