Long Service Leave For Casual Employees In Victoria

If you run a small business in Victoria, long service leave (LSL) can feel straightforward for full-time staff - but a lot less clear once casuals are in the mix.

And that’s exactly why “long service leave for casuals Victoria” is such a common search: employers want to do the right thing, but you also want certainty on what you actually owe, when it becomes payable, and how to calculate it fairly.

The good news is that casuals can qualify for long service leave in Victoria. The key question is usually whether the casual employee has worked for you on a regular and systematic basis, with a reasonable expectation of continuing employment, and whether their employment has been continuous under Victorian rules.

Below, we break down how long service leave for casual employees in Victoria works, practical steps to stay compliant, and the red flags that often cause disputes.

Do Casuals Get Long Service Leave In Victoria?

Yes - casual employees can be entitled to long service leave in Victoria.

In Victoria, long service leave is governed by the Long Service Leave Act 2018 (Vic). The Act does not exclude casuals. Instead, it focuses on whether the employee has a period of continuous employment with you (including certain casual employment arrangements).

What “Continuous Employment” Usually Means For Casuals

For many employers, the confusion is that casual work can look “on and off”. However, the Victorian legislation can still treat a casual’s service as continuous where the engagement is ongoing in substance, even if the roster varies.

As a practical guide, a casual is more likely to be on track for long service leave if:

• they work for you regularly (for example, most weeks or most months), and
• the pattern of work is systematic (there is some consistent arrangement rather than truly ad-hoc work), and
• there’s a reasonable expectation of ongoing work (even if shifts change week to week).

If your casual truly works once in a blue moon (for example, only filling in for emergencies), they may be less likely to build continuous employment in a way that triggers long service leave - but it will always depend on the facts.

If you’re unsure about how a particular casual engagement should be treated, it’s often worth checking your documentation and arrangements early - for example, whether your Employment Contract reflects what actually happens in practice.

When Does Long Service Leave Start Accruing For Casuals?

In Victoria, long service leave generally becomes available to be taken after a minimum period of continuous employment.

For most employees (including casuals who meet the “continuous employment” requirements), the key milestones are:

• After 7 years of continuous employment: the employee becomes entitled to take long service leave.
• After 10 years of continuous employment: the employee has a larger entitlement, and the entitlement keeps building with service.

How Much Long Service Leave Do They Get?

In Victoria, long service leave accrues at a rate of 1/60 of the employee’s total period of continuous employment.

That works out roughly as:

• After 7 years: about 6.07 weeks of long service leave
• After 10 years: about 8.67 weeks of long service leave

Importantly, it’s not “all or nothing”. Long service leave keeps accruing throughout the employment relationship - it’s just that the employee typically can’t take it until they reach the eligibility point.

Does A Break In Shifts Break “Continuous Employment”?

Not necessarily.

One of the biggest mistakes employers make when dealing with Victorian long service leave for casuals is assuming that if a casual had a few weeks (or even months) without shifts, it automatically breaks continuity.

In reality, a gap in rosters can happen for plenty of reasons (seasonality, quiet periods, study, availability changes). Whether the employment relationship remained “on foot” is usually what matters.

If you want to reduce uncertainty here, consistency helps: keep clear communications, use written arrangements, and make sure your Workplace Policy approach to rostering and availability lines up with how you actually run your business.

How Do You Calculate Long Service Leave For A Casual In Victoria?

Calculating long service leave for casuals in Victoria usually involves two key steps:

1. work out how much leave they’ve accrued (the entitlement), and
2. work out what to pay when they take it (the pay rate).

Step 1: Calculate The Accrued Entitlement

The entitlement is based on length of continuous employment. In simplified terms:

• calculate the employee’s total continuous employment period (in weeks), then
• divide by 60 to get the number of weeks of LSL accrued.

Example (simplified): if a casual has 7 years of continuous employment, they accrue around 6.07 weeks of long service leave.

If you want a deeper dive into the numbers and examples (including longer service periods), the approach is consistent with the method outlined in our guide to long service leave in Victoria.

Step 2: Calculate What You Pay A Casual While They’re On LSL

For casuals, the tricky part is the weekly pay rate because hours often vary.

In Victoria, the pay for long service leave is generally based on the employee’s ordinary pay. Where hours fluctuate, you’ll usually need to use an average of their ordinary hours to work out what a “week” looks like for that employee. In practice, many businesses use the employee’s average weekly ordinary hours over the preceding 12 months (excluding overtime) as a starting point, then apply their ordinary rate of pay.

Practical tips to avoid errors:

• Separate ordinary hours from overtime (if overtime is relevant in your business).
• Keep clean payroll records that show hours worked per pay period.
• Be consistent in how you define “ordinary hours” for the role.
• Check any modern award or enterprise agreement overlays (they can affect definitions and loading structures).

If you’re unsure whether an award applies, or you’re juggling multiple classifications, having your settings checked under award compliance can save a lot of back-and-forth later.

What Happens If A Casual Leaves Before Or After 7 Years?

This is where many employer obligations are missed, especially when casuals come and go over time.

If They Leave Before 7 Years

In most cases, if a casual employee’s employment ends before completing 7 years of continuous employment, they will not have an entitlement to be paid out long service leave.

However, you should still keep accurate service records, because disputes often arise about whether the employee actually did reach 7 years (for example, if start dates are unclear or there are arguments about whether employment was continuous).

If They Leave After 7 Years (Payment On Termination)

If a casual employee’s employment ends after at least 7 years of continuous employment, they will generally be entitled to be paid out their accrued long service leave on termination (including if they resign).

There are limited exceptions. For example, where an employee is dismissed for serious misconduct, Victorian long service leave rules may allow an employer to refuse payment of long service leave on termination.

Because termination scenarios can still be high-risk (and because long service leave can be a meaningful amount after years of service), it’s important to be careful with how you document and implement exits.

For example, if you’re making role changes and it’s drifting toward a redundancy situation, you’ll want to handle the process (and final pay components) carefully. In some cases, a redundancy scenario may overlap with long service leave calculations and other entitlements.

Can You “Cash Out” Long Service Leave Instead?

Generally, long service leave is designed to be taken as paid time off - not cashed out as a substitute for leave (except in circumstances like termination, where accrued entitlements need to be paid out).

If you’re considering any arrangement where a casual employee is paid an extra amount “instead of” accruing long service leave, that can create risk. A clause like that may not override the legislation and can lead to underpayment claims later.

Common Risk Areas For Employers (And How To Avoid Disputes)

Issues around long service leave for casual employees in Victoria usually don’t come from employers trying to do the wrong thing. They come from grey areas in record-keeping, inconsistent rostering practices, or misunderstanding how long-term casual engagement works.

Here are some of the biggest risk areas we see in practice.

1. Treating Long-Term Regular Casuals As “Truly Casual”

If someone has been working with you for years on an ongoing pattern, calling them “casual” in your system won’t necessarily stop long service leave from accruing.

What matters is the reality of the relationship - and whether it’s continuous employment under Victorian rules.

2. Missing Service Because Of Poor Start Date Records

It’s surprisingly common for a business to lose track of:

• the employee’s first engagement date
• changes in entity (for example, if the business was restructured)
• periods where the employee worked under a different manager/location

These details matter when the employee hits the 7-year mark and asks about their long service leave entitlement.

3. Underpaying Because “Average Hours” Were Calculated Incorrectly

For casuals, errors often happen when you:

• average over the wrong period
• include overtime when you shouldn’t (or exclude ordinary hours)
• don’t account for ordinary pay components correctly

To reduce your risk, keep clear payroll data and ensure your contracts and award settings reflect the role. Starting with a properly drafted Employment Contract can make later entitlement calculations much cleaner.

4. Confusion Between Long Service Leave And Other Leave Types

LSL is separate from annual leave and personal/carer’s leave. It also tends to interact with termination, notice, and final pay in a way that can be easy to miss if you’re trying to wrap up an exit quickly.

If an employee is leaving and you’re working out the correct final amounts, you may also need to think about things like payment in lieu of notice alongside LSL payout obligations.

Practical Compliance Checklist For Small Businesses In Victoria

If you want a simple action plan to manage long service leave for casuals in Victoria, here’s a practical checklist you can implement in your business.

1. Identify Which Casuals Are “Regular And Systematic”

• Run a report of casuals engaged for 12+ months.
• Look for consistent patterns (weekly, fortnightly, seasonal but recurring).
• Flag anyone approaching 5-7 years of service for closer review.

2. Keep Strong Records From Day One

• Capture and retain the start date and engagement details.
• Keep payslips and timesheets, and store them securely.
• Document any material changes (role, rate, location, entity changes).

3. Use Written Agreements And Policies That Match Reality

• Use a casual agreement that reflects casual engagement properly.
• Align your rostering/availability approach with a clear workplace policy.
• Make sure you’re not promising “permanent ongoing hours” if the engagement truly is casual.

4. Build LSL Into Your Budget Forecasting

Even if no one is taking LSL yet, if you have long-term casuals, the liability may be accruing in the background.

As your team grows, it’s worth forecasting:

• who is likely to become eligible within the next 12-24 months
• what their average weekly hours look like
• the operational impact of having them away on leave

5. Be Careful When Ending Employment After 7 Years

Because long service leave is generally payable on termination once an employee has at least 7 years’ continuous employment (and the serious misconduct exception can involve judgement calls), it’s wise to slow down and check the details before issuing termination letters or final pay calculations.

In higher-risk situations (performance issues, restructures, medical issues), it’s often worth getting advice early so you don’t accidentally trigger an incorrect outcome.

Key Takeaways

• Casual employees can be entitled to long service leave in Victoria if they have a period of continuous employment (including where their work is regular and systematic with a reasonable expectation of continuing employment).
• In Victoria, long service leave generally becomes available after 7 years of continuous employment, and it accrues at a rate of 1/60 of service.
• For casuals, the hardest part is often the pay calculation - you’ll usually need to use an average of ordinary hours to work out what a “week” is for that employee.
• If employment ends after at least 7 years, long service leave will generally need to be paid out on termination (with limited exceptions, such as serious misconduct).
• Strong records, clear contracts, and accurate award settings are the best ways to reduce disputes and stay compliant.

If you’d like help reviewing long service leave obligations for your Victorian workforce (including casual engagements, award coverage, or termination risks), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.