The Western Australian Industrial Magistrates Court (WAIMC) has recently, in Venier v Baker Hughes Australia Pty Ltd [2016] WAIRC 00210, clarified what is “continuous service” for the purposes of calculating an employee’s long service leave entitlement under the Long Service Leave Act 1958 (WA) (LSL Act) and whether service with a related company overseas can be taken into account for that purpose.
Mr Venier was employed by Baker Hughes, an oilfield services company operating out of Perth, in November 2008. His employment with Baker Hughes ended in July 2015. At face value, Mr Venier was employed by Baker Hughes for less than 7 years, making him ineligible to be paid out any long service leave entitlement that he may have accrued because he had not met the qualifying requirement of 7 years continuous service with the same employer.
However, Mr Venier’s history of employment with entities related to Baker Hughes internationally stretched back to November 1988 when he commenced employment with Teleco Oilfield Services in the United Kingdom. In 1992, Teleco was sold and became a division of Baker Hughes. Mr Venier continued his employment with Teleco and over the following years he was promoted and transferred a number of times between different related entities of Baker Hughes. Finally, he was transferred to Australia and commenced employment with Baker Hughes Australia in 2008 where he remained until his employment ceased in July 2015.
Upon commencing employment in 2008, Mr Venier’s employment contract stated that he was entitled to long service leave in accordance with the LSL Act.
Mr Venier claimed in the WAIMC that, in accordance with s 8(1) of the LSL Act, he had “continuous service” with Baker Hughes and its related entities from 1988. The vast majority of that time had been served outside of Western Australia. Thus, on termination of his employment, he was entitled to payment for 23.01 weeks long service leave.
Baker Hughes argued that under the LSL Act, Mr Venier could not include his service with Baker Hughes prior to his commencement of employment in Australia in 2008.
The WAIMC considered the Corporations Act 2001 (Cth) in deciding whether the various entities that had employed Mr Venier were ‘one and the same’ for the purposes of the LSL Act. The Court ultimately found that the definition of ‘related bodies corporate’ in s 50 of the Corporations Act applied to ‘one and the same’ employer as described in the LSL Act. The WAIMC thus found that Mr Venier was entitled to long service leave as he had claimed.
Lavan comment
It is important to note that an appeal has been filed by Baker Hughes against this decision.
Absent any reversal of the decision on appeal, Venier v Baker Hughes Australia confirms that when an employer is calculating long service leave entitlements, it is necessary to give regard to any continuous employment an employee has had with any related entities, irrespective of whether this service was in Western Australia or overseas.
The decision would thus demonstrate the importance to employers of ensuring that they have adequate processes for identifying and recording the movement of employees into and out of Australia. An appropriately designed system will allow an employer to properly track the accrual of an employee’s long service leave entitlements and prevent surprises of the kind experienced by Baker Hughes.
If you require assistance in determining an employee’s long service leave entitlements, please contact us.
