Hansard debates

                   COMMUNITY SERVICES LONG SERVICE LEAVE BILL
                                 Second reading
Debate resumed.

  Ms  NEVILLE  (Minister  for  Community  Services) -- The second-reading speech
continues:
The community sector -- scope
The criteria for determining the scope of community services activities included
in the scheme have been developed in close consultation with the sector.

The bill requires that community sector  workers be included in the scheme based
on  a  whole-of-organisation  approach. That is, all  full-time,  part-time  and
casual workers employed to undertake  the community service activities listed in
the legislation will be included in the scheme.
The bill provides for only two exceptions to this rule:
        1. Where a  children's  service is  run  by an organisation  whose  core
                business  is unrelated  to  the community  services sector, only
                those workers  employed to provide  children's services will  be
                included in the scheme.
        2.  In registered community health centres, only those workers  employed
                to deliver  community  services  will be included in the scheme.
                Their peers providing health services will not be eligible.

The scope defining eligibility for the scheme has  been developed to ensure that
the legislation only captures community services sector employees.
All health  workers and all  those employed to provide community-based aged-care
services will not be included in this scheme. This has resulted  from  extensive
consultation with unions and organisations.

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Consultations  also   identified  that  kindergarten  teachers  and   assistants
currently  have  access  to unregulated portable long service leave arrangements
that  would be lost if those employees were included in this prospective scheme.
In light of this, the bill excludes kindergarten teachers and assistants.
Portability of entitlements
The bill  provides for community service sector employees to be entitled to long
service  leave  benefits commensurate with  those described in  the Long Service
Leave Act 1992.
Employees will be entitled  to 8.7  weeks leave after they have accrued 10 years
of service with an employer or multiple employers across the sector.

The bill also  provides for those employees who receive additional entitlements,
above the existing Long Service Leave Act.
These additional entitlements can include access to a pro rata entitlement after
seven years of service with a single employer without having  to terminate their
employment, or leave the sector.
The bill also includes a provision to allow employers and workers  to  negotiate
mutually  beneficial arrangements for how long service leave entitlements may be
used.
This may include mutually  agreed flexible working arrangements; this is not  to
replace or prevent other flexible arrangements negotiated from time to time.
Jurisdiction of court proceedings

I  make the following statement  under section 85(5)(b)  of the Constitution Act
1975 of the reasons why it is the intention of clause 98 of the bill to alter or
vary section 85 of the Constitution Act 1975. Clause 98 provides  that it is the
intention of  that section  to alter  or vary section 85 of the Constitution Act
1975 to the extent necessary to prevent the bringing before the Supreme Court of
an action of a kind referred to in clauses 40, 85, 91 and 92.
Clause 40 provides that an employee may apply to the industrial division of  the
Magistrates Court  for a determination  regarding when their  long service leave
may  be taken  if the  employee and the employer cannot reach agreement or where
the employer  provides the employee with  notice directing the  employee to take
long service leave.

Clause 85 provides that proceedings in relation to any offence  against the bill
must  be  heard  and all penalties recovered by the industrial division  of  the
Magistrates Court.
Clauses 91 and 92  provide  that  where an employer has terminated or prejudiced
the position of an employee for exercising  their  rights  under  the  bill  the
industrial division of the Magistrates Court may impose a penalty on an employer
or  order  the  employer to reinstate an employee and reimburse the employee for
any  lost  remuneration or  compensate  the employee where  remuneration  is not
appropriate.
The reason for limiting the jurisdiction of the  Supreme Court in these types of
cases is that the industrial division of the Magistrates Court  has  taken  over
from the Employee Relations Commission in industrial  matters  within  Victorian
jurisdictions.

It   is  a  specialist   body  that  will  provide   cost-efficient  and  speedy
determinations in these matters.
Costs and funding
Introducing a portable long service leave scheme will, out of  necessity, create
some cost and administrative changes for community sector organisations.
Under this legislative  framework, in-scope employers will  be required to pay a
levy for all workers who have a contract of employment. The levy will be paid on
the total earnings for each employee, for each quarter.
The levy will be  managed by the scheme authority and used to pay administration
costs of the scheme, as well as fund employee  long  service leave entitlements,
when they fall due.

Extensive  actuarial analysis has  been undertaken to  ensure an ongoing, viable
scheme for the sector. Under  the bill, the scheme authority will have the power
to set the levy rate to be paid by employers on a quarterly basis.
Actuarial advice is that the initial rate should be set at approximately 1.6 per
cent  to be  calculated at 1.4 per cent for employees' entitlements and  0.2 per
cent for administration of the fund.
Throughout the consultation process it was identified that some sector employers
held concerns about  the potential administrative  and  financial impact of  the
scheme.
Extensive  work  has been  undertaken  to identify opportunities  to  reduce any
financial and administrative burden that community sector employers may face.

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As a result, employers will have the option of transferring administrative tasks
associated with record keeping and financial management of out-of-scope employee
entitlements,  above-base  entitlements  and  pre-existing  entitlements to  the
scheme authority.
This will enable  organisations to reduce  their administrative responsibilities
in relation to managing long service leave entitlements.
The government has agreed to provide financial assistance in the early stages of
the scheme to assist employers to meet the initial extra costs of setting  aside
long service leave contributions.
Implementation time line

The bill will be implemented at a date yet to be proclaimed, as it will be of no
effect until such  time  as the  commonwealth  passes legislation to  allow  the
scheme to operate with the intended scope.
The deferred debate and proclamation allows for the necessary legislative change
to the Fair Work Act, to support the operation of this scheme.  The commonwealth
has  signalled  intent  to accommodate state-based portable long  service  leave
schemes in the near future.
Secondly, the delayed  proclamation date will allow time for community  services
organisations  to adjust their  practices and prepare  for  the transition to  a
portable long service leave scheme.

The operation of the scheme will not  commence for at least 18  months after the
legislation  is proclaimed to  ensure there is  sufficient time for  transition,
consultation, training and establishment of the new arrangements.
The introduction of the  scheme  as  outlined  in  this  bill  will  provide the
community  services  sector  with  a much-needed competitive advantage. It  will
provide  additional  benefits and help  to ensure an ongoing,  viable sector and
effective delivery of services to the Victorian community.
I commend the bill to the house.
Debate adjourned on motion of Ms WOOLDRIDGE (Doncaster).
Debate adjourned until Wednesday, 20 October.