Portable Long Service Leave proposed for Victoria
The Victorian Government is proposing to introduce portable long service leave to the community services sector with the Long Service Benefits Portability Bill currently before Parliament.
If passed, this will introduce portable long service leave to all community services, excluding health and aged care services. The scheme is inclusive of for-profit organisations delivering disability services as well as not-for-profits.
While NDS supports measures that contribute to the availability, quality, skills and satisfaction of staff employed in the disability services sector, we are not convinced that portable long service leave is an effective workforce intervention.
About the proposed scheme
The proposed scheme will require providers to pay a levy, which will be calculated as a percentage of an employee’s ‘ordinary wage’. This levy will not exceed three per cent (although is expected to be nearer 1.5 per cent) and will be determined by a new independent authority. Employers and contractors will be required to pay the levy for all employees, including casuals, on a quarterly basis to the authority.
Employees will be allowed to be absent from their industry for up to four years without losing previously-accrued service. They will be able to apply for a benefit after seven years’ service under the scheme.
Providers will not be able to include a provision in a contract of employment that annuls, varies or excludes any provision of the Act. They will also not be permitted to include a provision in an agreement for the engagement of a contract worker that annuls, varies or excludes any provision of the Act.
NDS does not support this Bill. Disability service providers are under extreme pressure with the transition to NDIS, and an additional cost impost is not sustainable. We are concerned that this will undermine the financial viability of organisations. This could contribute to withdrawal of some services from the market, exacerbating the emerging thin markets for people with disabilities in some parts of Victoria. Additional costs may also further squeeze provision of supervision and training across the sector, already under pressure with NDIS prices.
NDS is recommending that disability services should be exempted from the Bill for the following reasons:
- Disability services are transitioning to NDIS, a federally-run scheme. Many will cease their direct funding relationship with the Victorian government and thus their funding cannot be directly adjusted to take account of new Victorian legal requirements.
- Furthermore, many of the NDIS prices are extremely lean and based on a number of assumptions about the workforce. This pricing is based on the federal SCHADS award and does not take account of state specific additional costs.
- There are well-documented, significant pressures on the financial sustainability of disability services, and further costs may drive services to withdraw from provision of NDIS services. This will exacerbate the thin markets which are already emerging.
- There is a precedent for an exemption. Some years ago, it was proposed that community aged care services be covered by a portable LSL scheme in Victoria, and they were able to be deemed out of scope in part because they are federally-funded.
If the Bill is not amended to exclude disability services, we are proposing that:
- The Victorian government fund an independent impact assessment; and
- The Victorian government also fully fund the new LSL Authority to ensure there are no additional costs imposed on disability service providers.
NDS is urging disability services to identify the potential impact of the portable long service leave scheme on their organisation and workforce, and raise any concerns with NDS by contacting Sarah Fordyce on her details below and their local member of Parliament.