Can Employers Refuse Long Service Leave In Australia?

Long service leave (LSL) is one of those entitlements that can catch small business owners off guard.

Unlike annual leave (which accrues and is typically taken every year), long service leave usually becomes relevant after many years of continuous service. That means when it comes up, it often comes up at a busy time - when you’re short staffed, when a key person wants to take a big block of time, or when you’re restructuring and trying to understand what’s owing.

So it’s completely understandable that business owners ask whether they can refuse a long service leave request.

The short answer is: sometimes you can refuse a particular request (for example, the timing or the way the leave is taken), but you generally can’t refuse the entitlement itself if the employee qualifies. The rules depend heavily on the state or territory law that applies (and sometimes the applicable award, enterprise agreement or employment contract terms), the employee’s circumstances, and whether the request is reasonable.

Below, we’ll walk you through how long service leave works in Australia, when you can say “no” (or “not right now”), and how to handle requests in a way that’s practical for your business and legally defensible.

What Is Long Service Leave (And Why It’s Not One-Size-Fits-All)

Long service leave is a paid leave entitlement that recognises long-term service with the same employer. It’s not governed by a single national law in the same way annual leave is under the Fair Work Act.

Instead, LSL is usually governed by state or territory legislation, and the rules differ depending on where the employee is based (and sometimes the industry they work in).

Key Differences Between States And Territories

Long service leave rules vary across Australia. Differences can include:

• How long an employee must work before LSL becomes available (for example, 7 years vs 10 years in some jurisdictions)
• Whether the employee can access leave before the full entitlement is accrued
• Whether and when pro-rata LSL is payable on resignation or termination
• How LSL is calculated for part-time or casual employees
• How and when leave can be taken (for example, whether it must be taken in one block or can be taken in smaller portions)

If you operate across multiple states, this can get tricky quickly. Even if you’re in one state, you still need to make sure you’re applying the correct local rules.

For example, if you’re trying to understand the numbers for Queensland employees, it can help to start with resources like calculating pro-rata long service leave in Queensland before you make decisions about requests or payouts.

Does Long Service Leave Apply To Casuals?

Sometimes. In some states and territories, long-term casual employees can qualify for long service leave where they have continuous service on a regular and systematic basis (even if their hours vary). In other cases, the rules are narrower, and eligibility can depend on the specific legislation (and, in some workplaces, an applicable award or enterprise agreement).

This is one reason why it’s important to track service dates and leave balances carefully - and to have consistent HR documentation and processes in place.

Can An Employer Refuse Long Service Leave In Australia?

The phrase “refuse” can mean two different things:

• Refusing the entitlement entirely (i.e. “you don’t get long service leave”)
• Refusing a particular request for timing or how it’s taken (i.e. “you can take it, but not then / not in that way”)

In most cases, you can’t refuse the entitlement if the employee qualifies. Long service leave is a legal entitlement under applicable legislation.

However, you may be able to refuse or defer the timing of the leave (or propose a different arrangement) if the relevant state/territory law allows it. The exact “refusal/deferral” rights vary significantly between jurisdictions, and in some cases you may need agreement with the employee (or to follow a specific process) rather than simply declining.

Common Situations Where A Business Owner Wants To Say No

Some typical examples we see include:

• A key manager requests 8-12 weeks off during your busiest season
• Several employees request long service leave around the same time
• The employee gives short notice, and you don’t have time to backfill their role
• The employee wants to take leave in small fragments that create rostering inefficiencies
• You suspect the leave request is being used to avoid performance management or a workplace process

Some of these issues can justify pushing back on the timing - but you’ll want to approach it carefully and document your reasoning.

When Can You Refuse Or Defer A Long Service Leave Request?

Whether you can refuse or defer long service leave depends on the applicable state/territory law and (sometimes) what’s in the employee’s contract or an industrial instrument.

That said, there are some common themes across jurisdictions: generally, if an employee gives appropriate notice and is eligible, they should be allowed to take long service leave - but employers may only be able to say “not at that time” in limited circumstances, and the scope of those circumstances depends on the law that applies.

1. If The Employee Hasn’t Met Eligibility Requirements

This is the simplest scenario. If the employee hasn’t met the minimum continuous service threshold under the relevant legislation, you can refuse the request because the entitlement hasn’t arisen yet.

Be careful here though: eligibility is not always “10 years and that’s it”. Some states allow access earlier, some allow pro-rata access under certain circumstances, and rules differ for resignation vs termination.

For example, if you have staff in NSW and you’re unsure whether an employee has a payable entitlement, it’s worth checking guidance like long service leave in NSW (especially where service duration and payment triggers can cause confusion).

2. If They Haven’t Given The Required Notice (Or Notice Is Unreasonable)

Many jurisdictions require an employee to give notice before taking long service leave.

If the employee gives very short notice and it’s not workable for your operations, you may be able to refuse the request as made and ask them to provide proper notice, or agree on alternative dates.

In practice, a collaborative approach usually works best: you acknowledge the entitlement, explain the operational issue, and propose workable timing options.

3. If The Request Would Cause Serious Business Disruption

Some long service leave laws allow an employer to refuse or defer leave in certain circumstances where granting it at the requested time would cause significant operational issues. However, this is not a uniform rule across Australia, and the thresholds and processes differ between jurisdictions (and may involve reaching agreement, or following steps set out in the relevant Act).

This is not a “free pass” to decline leave whenever it’s inconvenient. Where you are relying on operational grounds, you’ll generally want to be able to show that:

• you considered the request genuinely
• there are real operational reasons (not just a preference)
• you communicated clearly and tried to find alternative arrangements

If you are relying on operational grounds, you should keep a written record of why the requested dates are not workable and what alternative dates you proposed.

4. If The Employee Wants To Take Leave In A Way The Legislation Doesn’t Allow

Depending on the state or territory, there may be rules around:

• minimum periods that can be taken at a time (e.g. a minimum number of weeks)
• taking long service leave at half pay
• cash-out arrangements (often restricted)
• taking leave while on workers compensation or other forms of leave

If the request doesn’t comply with the applicable rules, you may be able to refuse that form of the request - while still working with the employee to take leave in a compliant way.

How To Handle Long Service Leave Requests The “Right” Way As An Employer

If you’re thinking about whether you can refuse a long service leave request, it’s usually a sign you need a clear process that balances:

• your legal obligations
• fairness and consistency
• the operational reality of running a small business

Here’s a practical way to approach it.

Step 1: Confirm Which Law Applies

Start with the employee’s work location and confirm which state or territory long service leave legislation applies.

If you have remote staff, FIFO arrangements, or staff moving between states, this can become complex - and it’s worth getting advice early.

Step 2: Confirm The Employee’s Eligibility And Balance

Before you respond, confirm:

• continuous service start date
• any breaks in service (and whether they count)
• the current accrued entitlement
• how the entitlement should be calculated for their work pattern

If you have staff in Victoria, you may need to consider the calculation method and triggers under Victorian rules - how to calculate long service leave in Victoria is a helpful starting point before you approve leave or plan cashflow for a long absence.

Step 3: Ask For The Request In Writing (And Keep Your Response In Writing)

Even if your workplace is informal, it’s smart to keep a paper trail. It helps you stay consistent and reduces misunderstandings later.

Written requests should cover:

• the dates requested
• whether the employee wants full pay or (if allowed) half pay
• whether the leave is requested as one block or in parts

Your written response should clearly state whether the request is approved, declined, or deferred - and why.

Step 4: If You Need To Refuse Or Defer, Propose Alternatives

If you can’t accommodate the exact dates requested, the safer approach is usually:

• acknowledge they are entitled to long service leave (if they are)
• explain the operational issue in plain terms
• propose alternative dates, or a staged approach
• invite them to discuss options

This shows you’re acting reasonably and in good faith - which matters if there’s ever a dispute.

Step 5: Back It Up With Strong Employment Documents And Policies

Long service leave disputes often happen alongside other workplace issues (like performance concerns, roster changes, or resignations). That’s why it helps to have your employment foundations in order.

For example, a clear Employment Contract and consistent Workplace Policy framework can reduce confusion about leave request processes, notice expectations, and approval workflows.

Common Mistakes Small Businesses Make With Long Service Leave (And How To Avoid Them)

Most small businesses don’t set out to do the wrong thing - long service leave is just an area that’s easy to mishandle because it’s infrequent and state-based.

Here are some common pitfalls to watch for.

Automatically Rejecting Leave Because “We’re Too Busy”

Being busy is part of running a business, so “busy season” alone may not be enough to refuse long service leave indefinitely.

If you need to defer, think about what you can reasonably offer instead (for example, a different start date, splitting the leave, or agreeing to half pay if the law allows).

Treating Long Service Leave Like Annual Leave

Annual leave under the Fair Work Act has a well-known “reasonable refusal” framework.

Long service leave is different, and the criteria for refusing, deferring or (in some cases) directing leave is set by state law (and may be affected by an award or enterprise agreement). If you apply the wrong framework, you may end up with an inconsistent or non-compliant outcome.

Inconsistent Decisions Across Employees

If you approve one person’s request but refuse another’s similar request, you may create:

• employee relations issues
• claims of unfair treatment
• additional scrutiny if a dispute escalates

Consistency matters. That doesn’t mean every request must be treated identically - but you should be able to explain why you made the decision you did.

Not Planning For Long Service Leave Liabilities

Long service leave is a real financial liability, and it can be significant if you have long-tenured staff.

It’s worth planning ahead by:

• reviewing who is approaching eligibility thresholds
• forecasting the cost of likely leave requests
• making sure payroll is calculating accruals correctly
• getting advice before you terminate employment (or accept resignations) where LSL payouts may be triggered

If you’re undergoing changes like restructures or business sales, long service leave can become even more complicated. In those situations, concepts like transferring long service leave can become relevant, particularly if employees are moving to a new employing entity or there’s a transfer of business.

Key Takeaways

• Can an employer refuse long service leave? You generally can’t refuse the entitlement if the employee qualifies, but you may be able to refuse or defer a particular request (for example, the timing or the way it’s taken) depending on the applicable state/territory law, any relevant industrial instrument, and the circumstances.
• Long service leave in Australia is mostly governed by state and territory legislation, so the rules differ depending on where your employee works.
• You’re on safer ground when you respond in writing, document operational reasons for any refusal/deferment, and propose reasonable alternative dates.
• Eligibility and calculations can be complex (especially for part-time/casual staff and pro-rata scenarios), so it’s worth checking your approach before approving leave or processing payouts.
• Strong HR foundations - including a clear Employment Contract and Workplace Policies - make long service leave requests easier to manage consistently and fairly.

If you’d like help responding to a long service leave request or setting up your employment documents the right way, you can reach Sprintlaw at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.