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Calls to end long service leave: ‘Outdated concept’

A composite image of Australian $100 notes in cash and a crowd of people waking in the Sydney CBD to represent long service leave payments for workers.
Long service leave may be a thing of the past for Aussie workers. (Source: Getty)

Back in the day, a worker would step into the workforce and spend the next decade working their way up the ladder to be rewarded with a well-deserved long-service-leave break - but times have changed.

Leading Australian workplace coach and CEO of Hello Coach Victoria Mills has called for an end to long service leave, saying most workers are unlikely to ever enjoy the reward.

The average tenure for Australian employees is now 2 years and 9 months, according to the McCrindle Future of Education 2021 Report, with future generations expected to have 18 jobs over six different careers in their lifetime.

“Australia is the only country in the world that has long service leave and, whilst it may have worked as an incentive for previous generations, long-term loyalty for employees is quickly becoming a thing of the past,” Mills said.

“I call it the ‘Tinder workforce’ - we now have a generation where everything is disposable and they’re used to having a lot of choice.”

Mills said, with Aussie workers constantly looking for something better, they were more willing to jump jobs if they were not satisfied.

“In a tight labour market this is putting incredible pressure on Australian companies who are struggling to retain and attract talent,” Mills said.

“Australian executives would be better off spending their money on strategies to retain staff in the here and now rather than expecting that a payment in a decade’s time is going to incentivise staff to stay.”

What is long service leave?

Long service leave is extra leave when an employee stays in one workplace for seven to 10 years or longer and provides for up to three months of fully paid leave, depending on the state and employer.

Crucially, long service leave is normally not portable and is lost when changing jobs.

“In the current times it’s an outdated concept and, considering it is an outstanding entitlement of more than $16.5 billion borne by Australian business every year, it’s also an unnecessary balance sheet expense,” Mills said.

“Bosses should be looking at more upfront bonus structures, wellness programs, education and coaching to offer their staff a reason to stay. They need to be thinking about what they offer staff today because, by tomorrow, it will be too late.”

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