Court rules on whether overseas stints are included in 'continuous service'

In a recent decision, the Court of Appeal of the Supreme Court of Victoria considered whether two employees, who had completed a significant portion of their employment in India, were eligible to receive long service leave entitlements in Victoria. The Court ultimately found that the workers’ employment in India had “no connection with Victoria at all” and held that their employer was not obliged to pay their long service leave.

Ms Anbalagan and Ms Thankappan were employed as software engineers at Infosys, a digital marketing company, having commenced employment in 2007 and 2009. Infosys is incorporated in India and registered as a foreign company in Australia, as it often deploys Indian staff members on engagements to Australia.

Anbalagan and Thankappan spent several years working in India before being transferred to Victoria in 2016 and 2017. When their employment was terminated in 2019, Infosys submitted it was not liable to pay the two employees their long service leave entitlements, which required seven years of “continuous service” with the company. The company asserted that the employees were not eligible to receive the payments because their employment in India did not count towards their period of continuous service.

In contrast, the State of Victoria, on behalf of the employees, submitted that the purpose of long service leave is to “reward long service with the same employer, regardless of where the employment occurs,” and therefore asserted that the time spent in India should be counted towards the employees’ continuous service.

Judgment

The primary issue for the Court of Appeal was whether Anbalagan and Thankappan’s employment in India should be included in their period of continuous service.

The Court noted that, throughout their service with Infosys, the workers’ employment was governed by Indian, rather than Australian, legislation. It also agreed with Infosys’ submission that “continuous employment” must be “in and out of Victoria.”

“Wherever the boundary is drawn, it is clear that the employment of each of Ms Anbalagan and Ms Thankappan that was undertaken in India had absolutely no connection with Victoria,” the Court said.

Finding that the workers’ employment in India had no connection with Victoria, the Court held that neither employee had completed seven years of “continuous employment” and was not entitled to long service leave payments.

Key Takeaways

• In Victoria, long service leave payments require a minimum of seven years of “continuous service” with a company
• This case shows the unlikelihood that overseas employment (albeit with the same company) will count towards a period of continuous service in Victoria
• However, this principle may differ across different states and territories in Australia