A recent decision by the Victorian Supreme Court has significantly expanded the scope of portable long service leave (PLSL) obligations for employers involved in “construction activity”—and it could affect more businesses than you might think.
This case serves as an important reminder for employers to reassess how PLSL applies to their business, even if they don’t consider themselves part of the construction industry.
What’s the Ruling?
The Court ruled that any worker performing “construction activity” may be entitled to portable long service leave—regardless of whether their employer is formally classified as operating in the construction industry.
This broader interpretation of “construction activity” includes tasks such as:
- Checking smoke alarms
- Maintaining or servicing a power station
- Performing technical work on infrastructure or building sites
In short, if the nature of an employee’s work falls under construction-related activities, they may now fall within the portable long service leave scheme—even if the employer’s primary business is something else entirely.
What Is Portable Long Service Leave?
Under the Long Service Benefits Portability Act 2018 (Vic), certain workers in construction, cleaning, security, and community services are entitled to accrue long service leave that moves with them as they change employers within the industry.
Employers must register and make quarterly contributions to the Portable Long Service Authority for eligible workers.
Key Implications for Employers
The ruling is a wake-up call for employers who:
- Engage employees or contractors in any work that could be interpreted as construction activity
- Operate in related sectors such as facilities management, energy, repairs, or maintenance
- Have not previously registered with the Portable Long Service Authority or made contributions under the scheme
Failure to comply could expose your business to backdated liabilities, penalties, or audits.
What Should Employers Do?
From a business and taxation perspective, now is the time to:
- Review roles and responsibilities— Look beyond job titles. Focus on what your employees actually do on-site or in the field.
- Check your registration status – If you haven’t registered for the PLSL scheme but have workers engaged in relevant activities, this ruling may mean you need to.
- Assess the tax implications – Contributions to the scheme are a cost to your business. We can help determine how they should be treated for tax and payroll purposes.
- Stay ahead of compliance risk – Addressing the issue now can reduce the risk of non-compliance and penalties later.
How We Can Help
As a firm specialising in Business and Taxation Advice, TAG assists clients in understanding the financial and compliance impacts of legislative changes like this one.
We can help you:
- Interpret how this ruling applies to your business
- Quantify potential obligations
- Adjust your systems for accurate record-keeping and reporting
- Navigate the tax treatment of PLSL contributions
If you’re unsure whether your employees are now covered by the portable long service leave scheme, it’s worth seeking advice—sooner rather than later.
Contact us today to ensure you remain compliant and avoid unexpected liabilities. Email us at team@tagfinancial.com.au or call us on 03 9886 0800.
Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2025. Please do not reproduce without the expressed written consent of the author.