Bills Digest no. 69 2009–10
Coal Mining Industry (Long Service Leave Funding)
Amendment Bill 2009
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introduced: 18 November
House: House of Representatives
Portfolio: Employment and Workplace
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
To amend the Coal Mining
Industry (Long Service Leave Funding) Act 1992 and the
Fair Work Act 2009 (FW Act) to ensure that long service
leave entitlements continue to accrue and the costs to coal
industry employers of meeting employee long service leave payments
can be met from the industry fund.
Long service leave benefits were granted
to black coal miners under an industrial award of the former Coal
Industry Tribunal in 1949.
The then Commonwealth Minister, the Hon J.J. Dedman, introducing
the legislation in 1949 to establish excise arrangements to fund
the long service leave award provisions, stated that it was
impracticable for long service leave costs to be borne solely by
individual coal employers and concluded that these would need to be
financed on an industry-wide basis. Other stated objectives were the support of labour
mobility within the coal industry and protection for employees
against employers going out of business or becoming insolvent.
The coal mining long service leave award allowed miners to count
retrospective service up to a maximum of 13 years for the purposes
of accumulating long service leave. For each year of service,
miners were granted one week leave.
After June 1949, each employee would accumulate leave at a rate
equivalent to 13 weeks for each 10 years of service, and in 1966
the qualifying period was reduced to 8 years of continuous
To finance the coal industry long service leave award provision,
a Commonwealth excise was imposed which in 1949 was 6d on 1 ton of
coal; by 1982 this was 20c and by 1993 it had become 5 per cent of
company payroll levy.
The Hawke Government commissioned a review of coal mining long
service leave funding arrangements in 1990. It created the Coal Mining Industry
(Long Service Leave Funding) Corporation as a Commonwealth
statutory corporation in 1992 via the Coal Mining
Industry (Long Service Leave Funding) Act 1992 and
The 1992 legislation restructured the operation of the Fund by
replacing the excise payable from coal sold, to a scheme based on a
rate applied to the industry pay-roll similar in principle to
pay-roll tax. Through a pay-roll levy system, it reimburses
employers for payments to eligible employees of long service leave
entitlements and advises the Minister as to the rates of levy that
should be imposed on employers. The Department of Education and
Employment and Workplace Relations (DEEWR) administers the Coal
Mining Industry (Long Service Leave Funding) Act 1992.
The coal mining long service leave scheme has worked thus:
- Award provisions set the rate of long service leave
accumulation in the industry for employees
- The Coal Mining Industry Long Service Leave Funding Act
1992 creates the Coal Mining Industry (Long Service Leave
Funding) Corporation. It operates in New South Wales, Queensland,
Western Australia and Tasmania. It is managed by a joint
- Producers pay payroll levy, currently set at 2.7 per cent of
payroll, to the
Coal Mining Industry (Long Service Leave Funding) Corporation via
the Coal Industry (Long Service Leave) Payroll Act
- Coal Mining Industry (Long Service Leave Funding) Corporation
transfers funds into Commonwealth Consolidated Revenue
- Funds are transferred back to Coal Mining Industry (Long
Service Leave Funding) Corporation by DEEWR
- Coal Mining Industry (Long Service Leave Funding) Corporation
manages funds, tracks entitlements and reimburses employers for
their cost of meeting employee long service leave entitlements
- Monthly levy collection transfers are made from the
consolidated revenue fund to the central fund.
Particular issues for long service leave entitlements arise
under the Fair Work Act 2009 as long service leave has not
been prescribed as an award provision; nor did the Workplace
Relations Amendment (Transition to Forward with Fairness) Act
2008 which framed award modernisation specify long service
leave as a modern award provision.
In other words, modern awards (as these are being developed) do
not prescribe a long service leave entitlement. Long service leave
is prescribed under the National Employment Standards but without a
schedule of leave accrual. Actual long service leave entitlements
for employees are preserved under the FW Act s National Employment
Standards (NES) by preserving instruments such as State and
Territory long service leave legislation, old federal and state
awards or other instruments.
The Bill s Explanatory Memorandum explains how the Government
thus intends to preserve coal mining long service leave
entitlements and fund leave acquittals in the absence of award
from 1 January 2010, the present industry
awards prescribing long service leave will be superseded by modern
awards under the Fair Work Act 2009 (the FW Act). Modern
awards will not include long service leave entitlements. Rather,
existing award based entitlements will be preserved as a statutory
entitlement under the National Employment Standards, pending
development of national long service leave arrangements.
As a consequence of these changes, because the
(Coal Mining Long Service Leave) Funding Act does not currently
cover entitlements determined by the National Employment Standards,
employers will not be entitled to reimbursement from the Fund in
respect of the long service payments they make to employees.
The amendments contained in the Bill address
this situation. The amendments ensure that, from 1 January 2010,
employers will be entitled to reimbursement from the Fund in
respect of long service payments they make to employees pursuant to
the preserved entitlements in the FW Act, in addition to the
current arrangements for reimbursement of entitlements paid under
industrial instruments and contracts. This is a technical amendment
which will not affect employees long service leave entitlements or
employers long service leave Fund obligations.
This Bill also contains the following
amendments to ensure that the scheme applies universally in the
black coal mining industry from 1 January 2010:
- the definition of black coal mining industry in the Funding Act
(which flows through to related legislation) will be aligned with
the definition in the Coal Award; and
- the current long service leave entitlements in The Coal Mining
Industry (Production and Engineering) Consolidated Award 1997 (the
main industry award) will be extended to all eligible employees who
do not otherwise have an award-derived long service leave
Item 1 and item 2 align,
respectively, the definitions of black coal mining industry and
eligible employee in the Act with definitions in the new Black Coal
Mining Industry Award as it comes into force from 1 January 2010.
The definition of eligible employees is widened to include those
employed in mine rescue service as well as prescribed persons
employed in the black coal mining industry.
Item 3 and item 4 define
employer and employee to be national system employers and national
system employees as expressed in sections 13 and 14 of the FW
Item 6 repeals subsection 44(3), replacing it
with new subsection 44(3) which ensures an
employer s entitlement to reimbursement from the Fund for payments
made to eligible employees where the employee s entitlement to long
service leave is derived from either:
- section 113 of the FW Act (the NES provision pertaining to long
- a relevant industrial instrument, or
- a contract of employment.
Item 7 deals with the application of these
amendments, meaning employment occurring on or after the
commencement of this Schedule.
Provisions under this Schedule extend the operation of the NES
long service leave standard (FW Act at section 113) to eligible
employees and their employment as if the Coal Mining Industry
(Production and Engineering) Consolidated Award 1997 would have
applied to the employee immediately before commencement of the FW
Act s National Employment Standards. The effect being that coal
mining employees who would not otherwise have had award-derived
long service leave, will accrue this entitlement from 1 January
The Bill is similar in purpose to the Long Service Leave
Legislation Amendment (Telstra) Act 2009 in preserving long
service leave entitlements, in this case, across an industry.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2463.
. J Dedman, Second Reading Speech: States
Grants (Coal Mining Industry Long
Service Leave) Bill 1949 , House of Representatives,
Debates, p. 1794.
. P Reith,
Review of Black Coal Mining Industry Long Service Leave Funding
Arrangements: Report to the Minister for Workplace
Relations and Small Business, World Competitive Practices,
June, 1998, pp. 6 7.
24 November 2009
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