CHAPTER 1
Background to the inquiry
Inquiry terms of reference
1.1
On 9 November 2015, the Senate referred the following terms of reference
to the Education and Employment References Committee for inquiry and report by
the third sitting day of 2016:
The feasibility of, and options for, creating a national long
service standard, and the portability of long service and other entitlements,
with particular reference to:
-
the number of Australians in insecure work;
-
the extent and nature of labour market mobility;
-
the objectives of portable long service leave schemes, and the key
components that might apply;
-
which sectors, industries or occupations may, or may not, benefit from
such schemes;
-
the operation of a portable long service scheme, including:
-
how and by whom such schemes might be run,
-
how such schemes could be organised, be it occupational, industrial or
other,
-
the appropriate role for the Commonwealth Government in facilitating
portable long service leave schemes,
-
the impact of varying state and territory long service leave
arrangements on a potential national long service scheme administered by the
Commonwealth,
-
the capacity to operate such schemes within or across jurisdictions,
including recognition of service; and
-
any other related matters.[1]
1.2
On 30 November 2015 the Senate extended the report date to 25 February
2016.[2]
Context and scope of the inquiry
1.3
Long service leave has existed in Australia since the 19th
century, and is unique to Australia and New Zealand. It 'was conceived in
Victoria in the 1860s to allow a predominately immigrant workforce ample time
to make the lengthy voyages necessary to visit their home countries, without
jeopardising their employment'.[3]
1.4
Long service leave has historically been contingent on a person staying
with their employer for a set number of years – generally between seven to
fifteen years – before they are eligible to receive long service leave. In most
cases, if a worker leaves their employer before reaching the threshold number
of years for long service leave, the process is reset.
1.5
However, there is recognition that long term employment with a single
employer is largely a thing of the past, and some submitters to this inquiry
have expressed concern that the changing nature of Australia's workforce,
including greater workforce mobility, means that many workers are missing out
on long service leave they would otherwise be entitled to access.
1.6
Exceptions exist where portability schemes enable workers to maintain
their entitlements when they change employers. For example, the construction
industry portable long service leave scheme recognises 'the unique nature of
employment in the building and construction industry, whereby employees are
typically engaged on a project basis and move from employer to employer as one
project is completed and another starts.'[4]
1.7
In light of concerns expressed by submitters about workers missing out
on long service leave entitlements, this report will outline arguments for and
against extending portability.
1.8
An additional consideration is the nationalisation of long service leave
standards. As of 1 January 2010, the National Employment Standards (NES) apply
to all employees covered by the national workplace relations system, regardless
of the applicable industrial instrument or contract of employment. Long service
leave is one of the NES and gives an employee leave after a long period of
working for the same employer.
1.9
However, most employees' entitlement to long service leave comes from
long service leave laws in each state or territory. These laws set out:
-
how long an employee has to be working to get long service leave
(eg. after 7 years); and
-
how much long service leave the employee gets.[5]
1.10
The system as it currently stands is complex and can be difficult for both
workers and employers to navigate, particularly for employers who operate
across jurisdictions. Because of this, many submitters are supportive of a
nationalised standard for long service leave. This will be considered in this
report.
1.11
The report will also look at a range of related issues, including the
concept of insecure work and labour market mobility, and related issues.
Conduct of the inquiry
1.12
Notice of the inquiry was posted on the committee's website. The
committee also wrote to key stakeholder groups, organisations and individuals
to invite submissions.
Submissions and public hearings
1.13
The committee received 34 submissions. The submissions, answers to
questions on notice, tabled documents and additional information are listed in
Appendix 1.
1.14
The committee held a public hearing in Canberra on Friday, 5 February
2016. The witness list for this hearing is available in Appendix 2.
Acknowledgment
1.15
The committee thanks those organisations and individuals who contributed
to this inquiry by preparing written submissions and giving evidence at the
public hearing.
Senator Bridget McKenzie
Deputy Chair
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