Canberra not-for-profit in dispute with government over long service leave payment demand

After 18 months of being rebuffed and ignored by the ACT government, a Canberra not-for-profit body is being forced to take its case to court in an effort to clarify confusion over a demand to back-pay long service leave entitlements.

Mental Health Australia said it stands to lose more than $250,000 after receiving what it describes as "bad advice and mixed messages" from the ACT Long Service Leave Authority.

Now the organisation, which has been based in Canberra for around 20 years and has around 19 part-time and full-time employees working in various administration and health advocacy roles, is concerned that its situation is being used as a legal test case by the ACT government to clarify poorly framed legislation.

The ACT's Long Service Leave Authority administers a portable scheme which allows employees or subcontractors to work for different employers within various job sectors such as construction, cleaning, security and community service, but still accrue a long service leave entitlement.

The registered charity body had been part of the scheme for many years until advice was received from the authority in 2016 that it was no longer eligible and would be deregistered from January 1, 2017.

Mental Health Australia chief executive officer Frank Quinlan says its dispute with the government could be solved by the minister "at the stroke of a pen". Picture: Supplied

Mental Health Australia chief executive officer Frank Quinlan says its dispute with the government could be solved by the minister "at the stroke of a pen". Picture: Supplied

"We acted on this advice, in good faith," the chief executive officer of Mental Health Australia, Frank Quinlan, said.

However, the authority then reversed its decision and is now demanding that the body, which is funded by a federal grant and receives no ACT government support nor provides any mental health or community services to the ACT community, re-register and back-pay the government for the time it was out of the scheme.

Numerous entreaties were made by the charity to discuss the issue with the authority but these proved unsuccessful, so the charity now has no option but to defend its position in court.

"What is intensely frustrating about this situation is that it could be resolved at the minister's discretion with a stroke of the pen," Mr Quinlan said.

"I can't for the life of me understand why this matter needs to be resolved in court unless the government's intention all along was to use our organisation for its legal test case.

"And while all of this is going on, the ACT government has the portable long service leave scheme under review".

There are 23 not-for-profit organisations, of which the MHA is one, funded through the federal government's Health Peak and Advisory Bodies program.

Several of these national peak bodies based in Canberra were contacted by The Canberra Times but were not prepared to admit whether they were affected.

Mr Quinlan said that was in no way a tactic by the body to avoid paying its proper entitlements.

"We are an organisation which prides itself on exceeding its obligations as an employer," he said.

"The question for us now is whether we still have to make provisions outside the scheme for long service leave.

"Without any discussion or consultation we were sent a bill for back payment by the authority, and then shortly after [they] sent a demand for payment.

"It just doesn't make sense that a not-for-profit would be treated this way.

"This money could have been far better used to employ someone who would have made a real and significant change to other people's lives."