In brief
On 5 May 2026, the Victorian Court of Appeal in EnergyAustralia Pty Ltd v CoInvest Limited [2026] VSCA 80 confirmed the broad scope of Victoria's construction industry portable long service leave scheme. The Court dismissed EnergyAustralia's appeal from the Supreme Court and confirmed that an employer's liability to make portable long service leave contributions depends primarily on the nature of the work performed by its workers, rather than the employer's primary business.
The Court of Appeal's decision reinforces the potential application of the scheme to businesses operating outside what would traditionally be considered the “construction industry”.
Key takeaways
- The Court of Appeal has confirmed that employers may be liable to make portable long service leave contributions even where they do not operate in what is traditionally considered the construction industry.
- Liability depends principally on the nature of the work workers are employed to perform, rather than the employer's primary business purpose or industry classification.
- The fact that repair and maintenance work is performed in-house as part of an employer's overall undertaking, rather than being provided to external customers for reward, does not prevent the scheme from applying.
- Employers in sectors such as energy, utilities, facilities management, property services, maintenance and inspection services should review whether workers are performing "construction work" as defined under the scheme.
- Non-compliant employers may be required to make retrospective payment of long service leave charges with interest and face significant civil penalties.
- While this is a Victorian judgment, similar schemes exist in all other States and Territories. Employers should consider whether those schemes may also apply to their operations.
In depth
Legislative framework
Victoria's portable long service leave scheme for the construction industry is established under the Construction Industry Long Service Leave Act 1997 (Vic) and its Rules, and administered by CoInvest. Under the scheme, employers are required to pay a long service leave charge for workers employed to perform "construction work", being work carried out in the "construction industry" which is defined broadly in the Rules.
Relevantly, the definition of construction industry includes the construction, installation, maintenance and repair of a wide range of infrastructure and facilities, including structures or works used for the generation, supply or transmission of electric power.
The Rules contain an exception for maintenance or repair work that is "routine or minor" in nature where the work is performed for an employer that is not engaged substantially in the construction industry.
Background and litigation history
EnergyAustralia is a power supplier and as a part of its business operates the Yallourn power station in Victoria. CoInvest determined that EnergyAustralia was required to make portable long service leave contributions for employees engaged in maintaining and repairing the power station.
EnergyAustralia challenged that determination, arguing that:
- It was not operating in the construction industry.
- The relevant employees were not performing construction work for the purposes of the scheme.
- The exclusion for routine or minor maintenance and repair work applied.
In 2025, the Supreme Court rejected those arguments and held that the scale and complexity of the maintenance activities brought the work within the scheme.
Around the same time, the Supreme Court reached a similar conclusion in Detector Inspector Pty Ltd v CoInvest Ltd [2025] VSC 135, finding that employees performing inspections, maintenance and related services in residential properties were engaged in construction work for scheme purposes.
EnergyAustralia subsequently appealed to the Court of Appeal.
Court of Appeal decision
The Court of Appeal dismissed the appeal and confirmed that the proper inquiry is whether the relevant workers are employed to perform construction work in the construction industry as defined by the scheme.
The Court emphasised that:
- Liability is determined by the scheme, rather than by an employer's general industry classification.
- The focus is on the character of the work undertaken by the relevant workers.
- Construction work can include substantial maintenance and repair activities undertaken by an employer's own workforce for its internal operational purposes, notwithstanding that the work is not provided to external customers for reward.
- An employer's primary business need not be construction for the scheme to apply.
The Court also provided guidance on the "routine or minor" exception. In determining whether an employer is engaged substantially in the construction industry for the purposes of that exception, relevant considerations include:
- The scale and extent of the construction work undertaken
- The proportion of the workforce engaged in performing that work
Implications
- The Court of Appeal decision confirms that the portable long service leave scheme may apply far more broadly than many employers may have expected.
- Employers who may not fit within the typical mould of the “construction industry” should carefully consider whether workers are covered by the scheme and whether contributions are payable (both in Victoria and other relevant jurisdictions).
- Non-compliance can have significant consequences, including retrospective liability for unpaid long service leave charges with interest, as well as substantial penalties for failures to register employees and maintain required records.