Victorian Ruling Expands Workers’ Leave Rights

Thousands of employers could now face unexpected long service leave costs as a result of a game-changing legal interpretation of construction work in Victoria, potentially ballooning wage liabilities by hundreds of thousands of dollars each year.

Until now, portable long service leave mainly applied to workers in the construction industry. But recent court decisions have redefined “construction activity” so broadly that roles like energy maintenance crews and smoke alarm technicians now fall within its scope. That means employers across power, telecom, and property services could owe years of back pay under the LeavePlus scheme.

The Victorian Supreme Court's rulings have pushed companies like EnergyAustralia and Detector Inspector into the spotlight. One could owe $800,000 in annual liabilities, the other $700,000 in total. Both had challenged the reclassification, arguing their businesses weren’t part of the construction sector. But the courts found that even maintenance or repair work counts if it’s construction-related, even if that’s not the business’s main focus.

This change seems to signal a bigger shift that could touch industries nationwide. The federal government has floated the idea of expanding portable leave schemes beyond Victoria, and unions have been lobbying state and federal governments to roll them out more broadly. If re-elected, federal leaders plan to revisit the idea, meaning this model could influence upcoming policy.

LeavePlus, the authority overseeing Victoria’s $2.4 billion fund covering 300,000 workers, says it will start auditing industries where confusion about obligations still exists. While some leeway is being offered for employers to amend past oversights, the body has already issued 10,000 notices and taken legal action against 250 employers in one year.

Source: Australian Financial Review, HR Law, Victorian Government