Co-Invest Scheme: The Construction Industry's Portable Long Service Leave
The Co-Invest Scheme is a scheme that provides employees and contractors in the construction industry in Victoria with portable long service leave. If you are an employer with employees carrying out:
- electrical trades
- metal trades
- landscape gardening
- shop fitting or
- floor covering work,
there is a reasonable chance that you need to be making Co-Invest contributions on behalf of your employees.
How the Co-Invest scheme works
Ordinarily, an employee is entitled to receive long service leave after seven years continuous service with one employer. It is different for employees who work in the construction industry, for whom the special Co-Invest Portable Long Service Leave Scheme applies.
Under this scheme, employers employing people to carry out construction work in the construction industry must make contributions to the Co-Invest scheme on behalf of their employees. These employees accrue a right to long service leave after seven years working in the construction industry, even if they work for different employers. After completing seven years of continuous service, it is Co-Invest, not the employee's current employer, who will pay the employee when they take long service leave.
The rationale behind the Co-Invest scheme is that employees in the construction industry frequently change employers due to the nature of the industry. Accordingly, these employees would be disadvantaged compared to employees in other industries if they had to work seven continuous years with one employer to obtain long service leave.
What is the Construction Industry?
Confusingly, the 'construction industry', for the purpose of the Co-Invest scheme, is defined much more broadly than the common usage of the phrase would suggest. Under the Co-Invest scheme, the construction industry comprises the following sectors:
- Building and Construction;
- Electrical Services;
- Floor Covering Services;
- Industrial Machinery or Equipment Services;
- Landscape Gardening;
- Metal Trades;
- Non-Destructive Testing Services;
- Parquetry Floor Laying;
- Shopfitting; and
- Watering System Services.
To whom the Co-Invest scheme applies
For an employee to be covered by the Co-Invest scheme, they must be carrying out Construction Work. Construction Work is defined in the Co-Invest Rules to include work that is:
- Performed in the Construction Industry (see above); and
- Which is Building Trades Work, Electrical Trades Work, Metal Trades Work or Other Trades Work.
The Co-Invest Rules provide detailed definitions of what constitutes trades work. If you think your employees may be carrying out trades work within the construction industry, then you should review the Co-Invest Rules to determine whether your employees must be covered by the Co-Invest scheme.
What you are required to do
Employers who have employees in the construction industry are required to make contributions to the Co-Invest Scheme.
The current contribution rate for each employer is 2.7% of the total gross wages that you pay to all of your employees covered by the Scheme for each quarter.
How can Sharrock Pitman Legal assist me?
The Co-Invest Scheme is complex and we find that employers are often unsure whether their employees are covered by the Scheme. If you are unsure whether you are required to make Co-Invest contributions on behalf of your employees, then please do not hesitate to call our Managing Principal, Mitchell Zadow, on (03) 8561 3318 or, alternatively, fill in the form below.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
Liability limited by a scheme approved under Professional Standards Legislation.
For further information contact
Mitchell is the Managing Principal of our law practice.
He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.