Security Industry
Portable Long Service Leave Scheme

DISCUSSION PAPER
ON A PORTABLE LONG SERVIVE SCHEME FOR THE AUSTRALIAN CAPITAL TERRITORY SECURITY INDUSTRY

December 2011

FOREWORD
The security industry is an important industry in the Territory performing a range of vital public safety services.  Within the industry there are around 240 master licensees who engage over 3000 workers in the Territory.  

There is a high level of mobility within the security industry.  In some instances a security worker can be performing the same function, in the same location over a period of time but engaged by more than one employer.  These factors mean that security workers are less able to access long service leave due to difficulties in accruing enough service with one employer to be eligible.

One way to address this real problem faced by security workers is to introduce a portable long service leave scheme for the industry.  This measure also recognises the importance of the security workforce and has the added advantage of improving the attraction and retention of workers within the industry.

In 2010-2011 the ACT Government announced its intention to extend the portable long service leave scheme to the security industry, with the view to commencing the scheme from 1 July 2012.  The Government is keen to support security workers by extending available leave entitlements to support their employment in this important service sector.  A portable long service scheme would enable workers to qualify for long service leave based on their service to the industry rather than service with the same employer.  Security workers can therefore work for any number of employers over a period of time in order to qualify for and gain access to a long service leave entitlement.

The ACT Office of Industrial Relations and the ACT Long Service Leave Authority are working in partnership to develop a portable long service leave scheme for the security industry.  An exposure draft of a proposed scheme has been developed.  Some consultation has already taken place with key worker and employer representative organisations in order to inform the exposure draft and this discussion paper. However this paper is intended to assist all individuals and organisations to understand the intent of the scheme and issues that need to be further considered.

I invite everybody who has an interest in this issue, including security industry associations, worker representatives, employers and workers, to have a say on the development of the scheme.  Your views are important to ensure the scheme operates effectively and meets the needs of workers and the industry as a whole.

I encourage you to make a submission.

Dr Chris Bourke MLA
Minister for Industrial Relations

December 2011

HOW TO MAKE A SUBMISSION 
In formulating your submission you are encouraged to refer to the issues and questions that are raised in this discussion paper.  However submissions are not limited to the questions and comments on any aspect of the paper are most appreciated. 

You are also encouraged to support your views and suggestions with any evidence, data or experience you have available to you.

Submissions may be made in a variety of ways:

1.  Written submissions using the template
The attached template may assist in preparing your submission.  It covers all major issues.  You are welcome to answer all questions or just the parts that interest you.

2.  Written submissions in any form
Please provide reasons or explanations in your submission to assist in understanding the nature of your views.

3.  Make a Submission in person or over the phone
The Office of Industrial Relations is happy to meet with you in person, over the phone, or via video-link, to discuss your views.  Please contact the Office (on the number below) as soon as possible to make an appointment between 23 January and 24 February 2012.  A written summary will be made of this meeting.

All submissions (including summaries of submissions made in person) will be made publicly available. 

The closing date for submissions is close of business Wednesday 29 February 2012.

Submissions may be lodged by:

Mail:	Security Industry Portable Long Service Leave: Consultation 
Office of Industrial Relations
Chief Minister and Cabinet Directorate 
GPO Box 158
Canberra ACT 2601

E-mail:			OIR@act.gov.au

The Exposure Draft of the proposed legislation, discussion paper and other information about the consultations may be found at

www.legislation.act.gov.au/ed/db_43664/default.asp

Inquiries about the discussion paper can be made by email to OIR@act.gov.au or telephone on 02 6205 0406.

What is portable long service leave?

Long Service Leave is additional leave granted to a worker after a defined period of service with an employer.  Generally, private sector long service leave in the ACT is governed by the Long Service Leave Act 1976 (the LSL Act).  Under the LSL Act the eligibility period for long service leave is seven years (pro-rata of a 10 years entitlement of 8.67 weeks).  Under the LSL Act scheme, for long service leave to accrue, the worker must have worked with the same employer for the entire eligibility period – it is not a portable scheme.

Portable long service leave allows a worker to accumulate their long service leave while employed or engaged to work within an industry sector rather than limiting their accrual to a single employer.

Under a portable long service leave model employers pay the money they would normally set aside for long service leave into a fund which is managed by a board.  Employees then draw on this fund when they wish to access their long service leave.

The ACT currently has three portable long service leave schemes in operation – one for the cleaning industry, one for the building and construction industry and more recently a scheme for the community sector.  The building and construction industry scheme commenced in 1981, the cleaning industry scheme commenced in 2000, and the community sector in 2010. The total number of registered workers in the three current schemes is 33,124 and the total amount of levies collected by all schemes in last financial year was $9.1m.

These industries share commonalities with the security industry sector in that a large portion of the workforce is mobile and faces difficulties in meeting the eligibility period for standard long service leave.  The existing portable schemes are governed by the same board and share corporate administrative costs.  However the assets and liabilities of three funds and employee service accruals are quarantined and managed by the Board separately.  The Board is a statutory authority and accountable under the legislation.

The security industry in the ACT

The security industry is unique compared to the other industries currently covered under the portable long service leave schemes.  This is because the industry is regulated under legislation - the Security Industry Act 2003 (the Security Act).  The Security Act makes it unlawful to operate within the industry without a license.  The Security Act regulates both principals (master license holders) employers and workers in various sectors of the security industry:
•	access control – installation of physical or electronic devices, electronic alarms, closed circuit television or other electronic surveillance systems and locksmiths
•	bodyguards – provision of close personal protection
•	cash transit – transportation of cash, precious stones and the like
•	crowd marshals – monitoring and control of people in public places and at major events
•	guard and patrol – monitoring and safeguarding of property.

The Security Act provides for applications for licences, specific licence requirements, including training, and a range of offences.  The objectives of the Security Act are:
•	to enhance compliance activities, primarily through offences, including offences for unlicensed employers and workers in the industry
•	to ensure suitability of licensed workers
•	to bring the ACT into line with other Australian jurisdictions
•	to clearly outline and monitor standards
•	to impose mandatory training
•	to clarify the provisions for dealing with breaches of standards.

Coverage of the proposed scheme

The definition of the security industry is critical to the development of the portable scheme.  In effect, the definition dictates the scope of the scheme in which security workers are included and entitled to portable long service leave.

The question of scope is usually the hardest question to tackle when developing a portable long service leave scheme.  However, given that the industry is regulated under the Security Act, this question is a little easier to answer as the definition can be connected to the Act and limited to a type of license holder.  The Employee license holders under section 13 of the Security Act are the extent of the security workforce in the ACT:

13	Employee licences
	(1)	An employee licence is a licence that authorises the licensee to do 1 or more of the following:
	(a)	patrol, guard, watch or protect property (including cash in transit);
	(b)	guard with a firearm for cash in transit;
	(c)	guard with a firearm for protecting property;
	(d)	act as a monitoring centre operator;
	(e)	guard with a dog;
	(f)	act as a bodyguard;
	(g)	act as a security consultant;
	(h)	act as a crowd controller;
	(i)	sell security equipment;
	(j)	carry out surveys and inspections of security equipment;
	(k)	give advice about security equipment;
	(l)	install, maintain, monitor, repair or service security equipment.
Note 1	A licence to guard with a firearm does not authorise the licensee to use a firearm (see s 16).
Note 2	A person must hold an appropriate ACT firearms licence to be eligible to be granted a licence to guard with a firearm (see s 24).
	(2)	In this section:
security consultant means a person whose function is to identify and analyse security risks and provide solutions, management strategies or both to minimise security risks.

The exposure draft proposes the inclusion of all employee license holders into the security industry portable long service leave scheme.  However there may be a case to limit the scheme to ‘front-line’ security workers, which would exclude workers under the following subsections:

13	Employee licences
	(1)	An employee licence is a licence that authorises the licensee to do 1 or more of the following:
	
	(g)	act as a security consultant 
	
(i)	sell security equipment

	(j)	carry out surveys and inspections of security equipment

	(k)	give advice about security equipment;

	(l)	install, maintain, monitor, repair or service security equipment.

Question 1: What security industry workers should be included in the portable long service leave scheme?

In the same way, all businesses/employers that are licensed under the Security Act and employ workers in the security industry would be required to register with the Authority and provide information to the Authority on a quarterly basis and pay an employer contribution levy to the Authority, also on a quarterly basis.

Why is mandatory participation by workers in the scheme best?

Participation in all schemes for the cleaning industry, the construction industry and the community sector is compulsory for employers and workers.

Consideration must be given to the nature of the scheme for the security industry.  Advantages of a mandatory scheme are that all workers are covered and if all businesses are included the result is a more even playing field.  A mandatory scheme is likely to improve attraction and retention for the security industry as a whole.

Consideration as to the coverage of different categories of workers is also necessary.  The security industry engages workers under a variety of arrangements including the traditional employer/employee relationship (such as temporary, casual, permanent and part-time workers) as well as engaging non-employee workers such as contractors.  There are benefits for all workers to have access to a portable long service scheme so that their entitlements are available over the duration of their working life.

In the current schemes participation is mandatory in respect of employees, however the schemes adopt opt-in systems for contractors (self-employed individuals who have no employees).  That is, it is up to individual contractors to decide if they wish to register with the schemes.  There are no penalties for not registering with the schemes but contractors are then not able to access the benefits of the scheme. 

Question 2: Should participation in the scheme be voluntary for contractors? 

How should the scheme be governed?

The governance arrangements for the current schemes are essentially the same.  All three are administered by an authority which is an independent statutory authority.   The authority keeps an employers’ register and a workers’ register.  The authority has a governing board which makes recommendations to the Minister for Industrial Relations about employer levies and has responsibility for the financial management of the funds for each of the schemes.  The schemes share corporate costs, including staff but the accumulated funds (and liabilities) in each scheme separately managed and accounted for.

When the community sector scheme was established the legislation was amended to ensure a single authority and board managed all of the schemes.  The legislation was also streamlined to assist in the expansion of the portable schemes to other industries in order to reduce overheads and ensure an appropriate level of consistency between entitlements.

Question 3: What should the governance arrangements be for the security industry scheme?  Should the security industry scheme seek to share corporate/administrative costs, such as staffing, IT equipment etc, with the other portable long service leave schemes as intended by the Government?

What should the benefits be and the associated levies?

The benefits under section 3 and section 4 of the Long Service Leave Act 1976 allow for 6.07 weeks long service leave at 7 years.  This is the norm for the non-government sector.  The cleaning industry and community sector schemes allows for 8.67 weeks leave after 10 years of service.  Pro-rata benefits are available after 5 years in the scheme for community sector works and 7 years for cleaning workers (subject to the passage of amendments to the existing legislation).

The levy for the cleaning industry is 2% and community sector scheme is currently 1.67% of normal employee wages, paid on a quarterly basis by the employer.

The ACT Building and Construction Industry scheme allows for 13 weeks long service leave after 10 years of service in the scheme have been accumulated.  The levy for this scheme is currently 1.25% of normal wages, paid on a quarterly basis.  However the levy rate is currently under review and is likely to be increased.

It is proposed that the portable long service leave scheme for the security industry allow workers to take long service leave after 7 years of service (at the entitlement rate of 6.07 weeks after 7 years of working in the industry).

The exact amount of the levy will be determined through an actuarial study.  A preliminary study has indicated a suitable levy might be 1.67% of normal wages.

Employers are not able to withdraw the money they have paid for an employee if the employee leaves before they are eligible for long service leave.  The money would remain in the scheme.

Question 4: What benefits should the security industry scheme provide, and what is your view on the associated levies?

What should the administration requirements be?

The community and cleaning schemes require that employers provide the Authority with quarterly returns.  These returns include the names of the employees and how much they were paid during the particular quarter.  The levy to the scheme is also paid quarterly.  The levy is determined by the Minister with advice from the board.  Employers can be fined for not lodging a quarterly return and/or paying the levy.

Employers in the Security Industry will be required to submit a return and commence making levy contribution payments three months after the Scheme comes into effect, which is in October 2012.  The return comprises information relating to the number of employees (permanent, part-time and casual) who worked for the employer during the quarter and the total amount of ordinary wages that were paid to them. The return form can be completed electronically through a web-site link which will be given to the employer.  The levy contributions payable to the Authority are calculated on the total of the employees’ wages in that quarter at the intended rate of 1.67%.  The electronic form will automatically calculate the levy payable from the wages data provided by the employer. Payment can be made by BPAY, EFT or cheque – preferable by BPAY.

If the employer pays an employee long service leave, in accordance with the Long Service Leave Act 1976, after the security industry scheme has commenced, the Authority will reimburse the employer for the period of time for which the employee was registered with the security industry and the employer was registered with, and paying the appropriate levy to the scheme. The reimbursement will be at the rate of pay the employee was receiving when the leave commenced.  For example, if an employee with 7 years service takes long service leave 2 years after the security industry scheme has commenced, the Authority will reimburse the employer for the proportion of the long service leave accrued in those 2 years.

Question 5: What should the administrative arrangements be for the security industry scheme?  Should returns and the levy be paid quarterly?

Security Industry Portable Long Service Leave Scheme: Discussion Paper

SUBMISSION

All submissions will be made publicly available.
Submissions must be received by close of business Wednesday 29 February 2012.

Email OIR@act.gov.au  
Mail:  
Security Industry Portable Long Service Leave Scheme: Consultation 
Office of Industrial Relations
Chief Minister’s Department
GPO Box 158
Canberra ACT 2601

Name:

Organisation:

Postal Address:

Contact (phone/email): 

OPENING COMMENTS:

Question 1: What security industry workers should included in the portable long service leave scheme?

Question 2: Should participation in the scheme be voluntary for contractors? 

Question 3: What should the governance arrangements be for the security industry scheme?  Should the security industry scheme seek to share administrative costs with the other portable long service leave schemes as intended by the Government?

Question 4: What benefits should the security industry scheme provide, and what is your view on the associated levies?

Question 5: What should the administrative arrangements be for the security industry scheme?  Should returns and the levy be paid quarterly?