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My name is ***** ***** I am a NSW Solicitor. Thank you for your question, and will do my best to assist you with your question. Please understand this is not legal advise Please understand this is not legal advice but a guide to assist you.
Have they terminated her for misconduct?
What state of Australia does she work in?
Because she has done more than the minimum years required the law in victoria no longer has her forfeit the money and they have to pay her.
Here is a link about LSL in victoria
She is lucky this change was made in 2005
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I am sorry to hear about that but due to her resigning this really means nothing and she cannot really sue for unfair dismissal but she still is entitled to her Long Service leave and if they do not pay her she can sue for it.