How illness amongst a pay dispute can still lead to payment of long service leave?

Long service leave in Queensland and to some extent in other states in Australia is an entitlement to reward long serving employees.

Long service leave entitlements in Queensland crystallise after 10 years however it can also paid on a proportionate basis after 7.5 years under certain circumstances namely:

·         Illness

·         Death

·         Domestic or other pressing necessity

·         A dismissal by the employer was for another reason other than the employee’s conduct, capacity or performance

·         The dismissal by the employer was found to be unfair

·         There was a reasonable expectation that the employee would continue working for at least 10 years of continuous service

However, what if there are circumstances where there is an internal dispute, for example a pay dispute to the extent that the employee says this is leading to anxiety and depression symptoms and this culminates in resignation?

Is proportionate long service leave payable now?

Morrell v CEVA Logistics (Australia) Pty Ltd [2024] QIRC 284 (6 December 2024)

A Queensland Industrial Relations Commission case of Morrell v CEVA Logistics (Australia) Pty Ltd [2024] QIRC 284 (6 December 2024) had this exact issue.

The employee worked for the employer for 7 years, 5 months and 20 days.

The employee had a pay dispute with her employer and as a consequence of not receiving the pay rise resigned.

The employee was being treated for anxiety and depression prior to and at the time of her resignation however did not disclose the medical condition to her employer.

Once the employee resigned she sought proportionate payment of long service leave.

Was the illness the genuine and motivating factor for the employee’s resignation?

In a word - YES

Medical evidence confirmed the employee was suffering from a pre-existing condition namely anxiety and depression and key to this all was that it was exacerbated by the pay dispute.

The timing of medical visits and resignation supported the contention that the pay review process directly impacted the employee’s health.

The nature of the employee’s illness and its exacerbation was linked to her perception of being undervalued and impacted her capacity to continue in the role safely. 

The employee argued that she needed to remove herself from the workplace and that this was a likely and reasonable response to prevent further aggravation of her condition.  The Queensland Industrial Relations Commission agreed with this argument.

The QIRC found the following:

• Illness was the genuine and motivating factor for the employee's resignation even though it was linked to a pay dispute
• The employee's illness affected her capacity to perform her role and work
• The application met the requirements for proportionate payment of long service leave under ss 95(3) of the Industrial Relations Act 2016 (Qld).
• The Employer was ordered to pay the applicant the sum of $8,847.75 (gross), being the amount of pro rata long service leave owed to her, within 14 days.

Learnings for Human Resources

Contemplation of proportionate long service leave being payable is relatively clear but in this case the illness even though it was not known to the employer at the time was found to be exacerbated by the pay dispute.

Here are a few points to gather from the case:

·         When dealing with a long service employee keep in mind some of the risks in any dispute, illness and injury, General Protections, Psychosocial Risks and Hazards and even a dispute application are some of the considerations to keep in mind

·         Illness and capacity is always a difficult area to traverse, legal advice should be sought in tricky situations

·         Understand the factors around areas such as long service leave and obtain advice if need be

Our Employment Lawyers at South Geldard Lawyers have essential expertise in preventing these issues occurring in the first place and helping with the legal issues when they do occur. Feel free to reach out on 1800 329 448 or via email to Jonathan Mamaril, Director at jmamaril@southgeldard.com.au.  All Employers receive an obligation free consultation.

Strong History. Exciting Future.

Written By

Jonathan Mamaril

Director

Head of Employment Law

South Geldard Lawyers

MCom GDLP LLB BA

jmamaril@southgeldard.com.au

07 4936 9100