I could be wrong, but I was under the understanding that once you've been with a company for 7 years you are entitled to your LSL upon resignation (like you would be any annual leave that you'd accrued). They don't have to let you take it as leave until you've been there for 10 years, but it does become a resignation entitlement after 7.

I'd been with my company for 9.5 years when I went on mat leave and they have let me take my LSL while on leave so that I can supplement my pay.

Definately something I would follow up because it doesn't sound right.