Brief history of events
In 1977 the then Government established, under the chairmanship of the then Department of Labour and Industry, a Committee to examine the need for a long service leave payment Scheme for workers in the building industry
The Committee was tripartite in nature comprising representatives of the Master Builders Association, the Trades and Labor Council, the Confederation of Western Australian Industry and the Government. The Committee completed its task on 13 December 1978 and produced a draft proposal for an Act concerning long service leave payments in the building and construction industry.
While facilitating the discussion the then government made it clear that it did not have a commitment to introduce a Scheme and legislation was not proceeded with at that time.
In 1983 further approaches were made to the Government by union representatives and on 27 February 1984 the Cabinet approved the establishment of a Scheme of portability of long service leave entitlements within the Building and Construction Industry in Western Australia. That approval was one in principle and contained a direction that the operation of the Scheme be the subject of tripartite consultation.
The Tripartite Labour Consultative Council subsequently resolved to form a sub committee comprised of representatives of the unions and the employer organisations in the construction industry to carry out this task. The sub committee representation consisted of the Confederation of Western Australian Industry, the Master Builders Association, the Australian Federation of Construction Contractors and the range of unions involved in the construction industry.
On 20 September 1984, the results of the sub committee deliberations were reported to the Tripartite Labour Consultative Council in the form of a proposed draft Bill which represented the collective views and substantial consensus of the sub committee as to how the Scheme should operate.
On 10 October 1984, Cabinet received the Tripartite Council’s report and approved the preparation of legislation along the lines of the report and also approved the continued involvement and participation of industry representatives in the drafting process.
The smaller sub committee formed to assist in this task consisted of senior industrial relations practitioners from the Confederation of Western Australian Industry, the Master Builders Association and the Builders Labourers Federation. The sub committee was chaired and serviced by the then Office of Industrial Relations.
This task was completed on 30 July 1985 and a Bill representing the consensus reached by the industry representatives went before Parliament in the Spring Session in 1985.
The Act and the regulations prescribing the awards to be included in the Scheme were proclaimed on 19 December 1986.
In mid December 1986 the Board decided that its administration would be ready for an early January commencement date for the Scheme and approved a start date of 6 January 1987.
A Ministerial order setting 6 January 1987 as the appointed day, the commencement date of the Scheme, was published in the Government Gazette dated 19 December 1986.
Operation of the scheme
The legislation provides for a portable long service leave Scheme for employees in the construction industry based on service to the industry rather than service to one employer. To be eligible for benefits under the Scheme employees must be registered.
To meet the costs of the Scheme each employer pays a contribution to the Board based on a percentage of their employees’ “ordinary pay for paid leave” except in the case of apprentices for whom no contribution is payable. The rate of contribution is set by the Board based on actuarial advice of the amount of funds needed to meet the liabilities of the Board under the Scheme and all the costs associated with administering the Scheme.
The liabilities of the Board include assuming without cost to employers the liability for service credits for apprentices.
The Scheme enables registered employees to carry their long service leave entitlements from employer to employer as the responsibility for payment of the long service leave rests with the Board and not individual employers. This is the “portability” aspect of the Scheme.
The Board keeps a record in a centralised register of the number of days each employee is engaged in the industry regardless of how many employers the employee works for. An employee may be credited with a maximum of 220 service days per year.
After 10 years of service in the industry (2200 days of service) a registered employee is entitled to 8 2/3rd weeks long service leave. The Board pays the employee for the long service leave using the employee’s ordinary rate of pay.
After 7 years of service (1540 service days) an employee may with the agreement of their employer take accrued long service leave (6 weeks after 7 years).
Also after 7 years of service employees who terminate their employment with an employer are entitled to a pro rata (proportionate) payment of accrued long service leave under the Scheme.
In summary, employees in the construction industry who are registered in the Scheme gain their long service leave entitlements from service to the construction industry rather than service to individual employers.
The Scheme provides a significant benefit to employees in the form of a portable long service leave benefit. As long as employees remain within the industry their long service leave entitlements continue to accrue.
An additional benefit of the Scheme relates specifically to apprentices. Apprentices receive credits for their apprenticeship period without cost to employers. This benefit supports and encourages the apprenticeship Scheme within the construction industry.
The Scheme is free for employees with all costs being met by employers by payment of a contribution levy.