Introductory Info
Date of introduction: 26 November 2025
House introduced in: House of Representatives
Portfolio: Employment and Workplace Relations
Commencement: Schedule 1, Part 1 would commence the day after Royal Assent. Schedule 1, Part 2 would commence the first day of the second calendar month to start after Royal Assent.
Purpose of the Bill
The purpose of the Coal Mining Industry (Long Service Leave) Legislation Amendment Bill 2025 (the Bill) is to amend:
to establish an unpaid levy payment arrangement (ULPA) framework.
The Bill responds to eligibility disputes over the coverage of certain employers in the black coal mining industry (BCMI).
Under the proposed ULPA framework, a person (i.e. an employer or former employer) holding levy liabilities relating to unpaid long service leave (LSL) entitlements for coal mining employees can opt to make repayments in instalments under an ULPA. ULPAs would require review and approval by the Board of Directors (Board) of the Coal Mining Industry (Long Service Leave Funding) Corporation (Corporation).
Where a person complies with an approved ULPA, that person would be eligible to receive a 20 per cent waiver of the outstanding levy liability. The Coal Mining Industry (Long Service Leave) Fund (Fund), the pooled investment fund managed by the Corporation, will cover shortfalls of levy payments so that employees receive full entitlements despite the remission, or waiver, of any liabilities.
Structure of the Bill
The Bill comprises 1 Schedule divided into 2 parts.
Part 1 of the Bill would amend the Collection Act to update the calculation of additional levy that is payable in respect of unpaid levy amounts, and to remove an unnecessary definition.
Part 2 of the Bill would amend the Administration Act to enable the making of certain assumptions about employees covered by an ULPA, where there is insufficient information to work out the entitlement, if any, of the employee to LSL. These amendments would mean:
- the Minister could determine, by legislative instrument, assumptions that must or may be made by the Corporation regarding LSL entitlements under ULPAs
- the Corporation could make any other reasonable assumptions about the matters about which there is insufficient information.
Part 2 of the Bill would also amend the Collection Act to insert proposed Schedule 1 to that Act, which would establish the legal basis and procedures for, and effects of, making ULPAs. Proposed Schedule 1 to the Collection Act would comprise 3 parts:
- Proposed Schedule 1 Part 1 provides a simplified outline of the schedule, relevant definitions, and places unpaid levy subject to court orders outside the ULPA framework.
- Proposed Schedule 1 Part 2 establishes the framework for creating ULPAs and related matters, including:
- notice and submission requirements
- procedures for preparing, reviewing and approving draft payment arrangements
- the Corporation’s information-gathering powers
- permitted assumptions that can be made by a person giving an ULPA to the Corporation
- approval and refusal criteria, correction of minor errors, and approved form requirements and
- providing for the reviewability of Corporation decisions by the Administrative Review Tribunal.
- Proposed Schedule 1 Part 3 would provide for the implementation of approved ULPAs including provisions for:
- determining the amounts and target days on which ULPA instalment payments are to be made, as well as when target days can be postponed
- circumstances in which a person complies or does not comply with an ULPA
- waiving 20 per cent of outstanding levy liability for a person who complies with an ULPA
- the effect of failure of compliance with an ULPA.
Background
Functioning of the portable long service leave scheme
The Bill’s Explanatory Memorandum (EM) provides a brief explanation of the Commonwealth’s portable long service leave scheme (Scheme) for the BCMI. The Scheme entitles eligible employees to LSL entitlements on the basis of time served in the BCMI, rather than with any particular employer (EM, p. 1).
LSL entitlements are paid from the Fund, which is funded by a levy on eligible wages payable by employers of eligible employees (EM, p. 1).
As explained on the Corporation’s website, the Corporation manages the Fund, and collects payroll levies from employers as a ‘mandatory employer tax’ which does not come out of employee wages.
The Scheme is the source of LSL entitlements for employees in the BCMI. The Scheme applies to exclude certain other LSL entitlements, such as those that might otherwise apply under the National Employment Standards (NES) or State or Territory laws (Administration Act, sections 39E and 39EA). Under the Fair Work Act 2009 (FW Act), the Black Coal Mining Industry Award 2020 - MA000001 (BCMI Award) cannot include LSL terms (section 155). However, enterprise agreements can include terms relating to LSL. Section 39EB of the Administration Act provides that it is not intended to override entitlements or rights in respect of LSL under an industrial instrument that covers the employee.
As well as the 2 Acts that would be amended by the Bill and broader workplace legislation, such as the FW Act, the Scheme is regulated under the:
Disputes regarding eligibility of workers for the scheme
There have been disputes over the coverage of the Scheme with respect to who is an eligible employee. The Coal Mining Industry (Long Service Leave Funding) Amendment Act 2009 (2009 Amending Act) amended the definition of ‘eligible employee’ in the enabling legislation for the Scheme (EM, p. 1). Eligible employees must be employed in the BCMI, and BCMI is defined by reference to the BCMI Award.
Subsequently, eligibility disputes arose regarding the coverage of employees, typically regarding employees on the ‘periphery’ of the BCMI, such as machine maintenance workers and electrical workers (EM, p. 1).
Section 7 of the Collection Act provides for the accrual of additional levy, which accrues on a day when levy is payable but remains unpaid. The additional levy operates as a penalty and is calculated according to subsection 7(2).
Significant amounts of additional levy can accrue where employers have failed to pay levies in respect of employees who have later been found to be covered under the Scheme (EM, p. 1).
The EM cites 2 recent decisions of the Full Bench of the Federal Court as having clarified the eligibility of employees under the Scheme (EM, p. 1). These cases are:
- Hitachi Construction Machinery (Australia) Pty Ltd v Coal Mining Industry (Long Service Leave Funding) Corporation [2024] FCAFC 166 (Hitachi)
- Orica Australia Pty Ltd v Coal Mining Industry (Long Service Leave Funding) Corporation [2025] FCAFC 65 (Orica).
Orica is, at the time of writing, the subject of an appeal before the High Court of Australia.
These cases concerned whether certain classes of employees were eligible employees covered by the Scheme. Outcomes in these cases turned on the definition of the BCMI as introduced by the 2009 Amending Act. In both Hitachi and Orica, it was held that employees had been part of the BCMI and were covered by the Scheme. Employers had previously treated these employees as falling outside of the Scheme and did not pay levy for them.
In a media release on the Bill, Minister for Employment and Workplace Relations, Amanda Rishworth, stated
The Government has worked closely with industry, unions and stakeholders to design a practical response to complex legacy issues. This legislation reflects that collaboration and our commitment to fairness for both employees and employers.
The independent review of the scheme
On 1 June 2021 the Morrison Government announced an independent review of the Scheme by KPMG. In December 2021, KPMG published the report titled Enhancing certainty and fairness: Independent Review of the Coal Mining Industry (Long Service Leave Funding) Scheme (Independent Report). It identified that the 2009 Amending Act contributed to issues which remained unresolved at the time of the report, forming the basis of many concerns raised in the Independent Report (p. 26).
The Independent Report contains 20 recommendations. Provisions in the Bill appear to implement or respond to several of these recommendations, including:
- Recommendation 2, regarding developing legislative amendments to address legacy issues with past application of coverage provisions
- Recommendation 6, to provide for settling employer liabilities in certain circumstances, to promote compliance with the scheme without affecting the ability of employees to receive accrued entitlements
- Recommendation 7, to consider the merits of a limitation period for the assessment and collection of levy liabilities to promote timely administration of the scheme.
Recommendation 4, to enact legislative amendments to ensure casual employees are treated no less favourably than other employees, was addressed by Schedule 6 to the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023, as identified in the EM to the bill introducing that Act (p. 28).
However, other recommendations in the Independent Report are not addressed by the Bill. Notably, this includes Recommendation 1, regarding definitions in the Administration Act.
Policy position of non-government parties/independents
At the time of writing, no comments on the Bill by non-government parties or independents could be identified.
Stakeholder comments
Industry bodies have made comments supportive of the proposals in the Bill:
- Australian Industry Group has stated that ‘the introduction of the Bill into Parliament is very welcome’, referencing its involvement in the Government’s consultation process
- The Mining and Energy Union welcomed the legislation, stating that the Bill would ensure that workers would receive entitlements that they are owed, and close loopholes that have wrongly excluded some workers from the Scheme. The Union stated that the Bill would create a practical pathway for employers to settle outstanding LSL liabilities.
Key issues and provisions
Review and approval processes for unpaid levy payment arrangements
The EM describes 5 stages for the approval of ULPAs as being:
- Stage 1: Opting-in
- Stage 2: Submitting a draft payment arrangement for review by the Corporation
- Stage 3: Review by the Corporation
- Stage 4: Preparing and submitting a ‘final’ payment arrangement
- Stage 5: Board consideration of payment arrangement
References in this section to proposed provisions are references to the proposed Schedule 1 to the Collection Act unless otherwise stated.
Stage 1: Opting in
If a person (an employer) wants to enter into an ULPA, they must give the Corporation written notice of their intention (proposed subclause 5(1)).
Notice to enter into an ULPA must be given before the end of two 2 months after the unpaid levy calculation day (defined under proposed clause 3 as the commencement day for proposed Schedule 1, or a later day determined by the Minister), or a day determined by the Minister that is more than 2 months after the unpaid levy calculation day (proposed subclause 5(2)).
The Minister can determine such a day for the notice period even if the two-month period mentioned in paragraph 5(2)(b) has elapsed (proposed subclause 5(4)).
Stage 2: Submitting a draft payment arrangement for review by the Corporation
Where a person gives such notice, the person may give a draft payment arrangement to the Corporation for review (proposed subclause 6(2) and clause 8), in a form approved by the Corporation (proposed clause 7 and subclause 16(1)).
Giving a draft payment arrangement is a precondition for a person to give an ULPA to the Corporation for approval (proposed subclause 9(1)). A draft payment arrangement must be given to the Corporation within 6 months of the notice of intention being given (proposed subparagraph 6(3)(a)(ii)) or a longer period determined by the Minister by legislative instrument (proposed subclause 6(4)).
The Corporation may approve an extension of no more than 3 months for giving a draft payment arrangement (proposed paragraph 6(3)(b) and subclause 6(5)).
Stage 3: Review by the Corporation
An employee or consultant of the Corporation must review a draft payment arrangement and consult with the person who submitted it within 2 months (proposed subclause 8(2)).
The EM explains that it is anticipated some employers will be able to submit complete or well-developed arrangements at this stage, whereas others, especially with incomplete records or debts further back in time, may need to seek advice from the Corporation about what records will suffice to support their proposed arrangement (p. 14, paragraphs 46–47).
Without limiting proposed paragraph 8(2)(b), the employee or consultant may offer the person advice or suggestions about compliance, assumptions that may or must be made, and revisions or inclusions to be made (proposed subclause 8(3)). Any such advice or suggestions will not prejudice Board decisions on approval or refusal of ULPAs (proposed subclause 8(4)).
Stage 4: Preparing and submitting a ‘final’ payment arrangement
Where a person has given a draft payment arrangement to the Corporation in accordance with proposed clauses 6 and 7, the person may give an ULPA to the Corporation.
The ULPA must individually specify employees of the person (proposed subclause 9(4) and paragraph 9(3)(a)), and for each of those employees, one or more periods (proposed paragraph 9(3)(b)). These are the employees and periods covered by the ULPA.
The ULPA must be given to the Corporation within 5 months of giving the draft payment arrangement (proposed subparagraph 9(5)(a)(ii)) or a longer period determined by the Minister by legislative instrument (proposed subclause 9(6)).
The Corporation may approve an extension of no more than 6 months for giving an ULPA (proposed paragraph 9(5)(b) and subclause 9(7)).
Proposed clause 10 sets out the form and content requirements for ULPAs. ULPAs must be in a form approved by the Corporation under proposed clause16.
The EM explains that various clauses, including clause 16, would engage the right to privacy (p. 23, paragraph 100). The collection and disclosure of personal information is stated to be necessary where the ULPAs deal with personal information of employees, such as names, employment periods and remuneration (EM, p. 23, paragraph 101). The EM states that any personal information collected under the amendments in the Bill would be handled in accordance with the Corporation’s obligations under the Privacy Act 1988 (p. 23, paragraph 100), and that any disclosure of information to the Corporation or auditors would be reasonable, necessary and proportionate for the purpose of preparing and approving arrangements (p. 23, paragraph 102.)
Working out liabilities and offsetting them by long service leave cessation payments
The content of an ULPA must specify the ‘subclause 10(8) amount’ in respect of wages. This is equal to the original amount of unpaid levy in respect of the wages, if the original amount were worked out in accordance with the assumptions mentioned or made under proposed clause 11 (these assumptions are covered below). In addition, an ULPA must include:
- an audit report in accordance with the requirements in proposed clause 12, namely that the report is prepared by an auditor, stating that the auditor opines that the subclause 10(8) amount is correct, and includes the reasons for so opining and
- information about covered wages and employees as required by the form.
- Importantly, the base amount of liability, relevant for working out a person’s liability under an ULPA, is determined by reference to
- the subclause 10(8) amount but
- this is offset by any relevant long service leave cessation payment (RLSLCP) amounts (proposed paragraph 10(3)(a), clause 25 and subclause 26(2)).
Proposed clause 2 would define ‘long service leave cessation payment’ (LSL cessation payment) in relation to a person, to mean:
a payment made by an employer that was:
(a)made to the person, or to the person’s legal personal representative, when (or after) the person ceased to be an employee of the employer; and
(b)in lieu of untaken long service leave; and
(c) made in pursuance (or purported pursuance) of:
(i)a law of a State or Territory; or
(ii) an industrial instrument; or
(iii) the National Employment Standards (within the 9 meaning of the Fair Work Act 2009).
Cessation payments
generally
are provided for under
part 5A division 3 of the Administration Act. LSL cessation payments effectively provide for the payout of long service leave entitlements where an employee’s employment ceases. In turn, RLSLCPs have the effect of reducing the subclause 10(8) amount
by the RLSLCP amount (
proposed subclause 26(2)), reducing the levy liabilities of a person under the ULPA, reflecting the fact that the employer will have already paid the employee an LSL cessation payment.An RLSLCP is defined under
proposed subclause 10(5), as an LSL cessation payment made:
- at or after the time at which unpaid levy, in respect of any of the wages covered by the agreement that the person paid to the employee, first become payable (proposed paragraph 10(5)(a)) and
- before the time the person gives the ULPA to the Corporation (proposed paragraph 10(5)(b)).
The EM states that
proposed subclause 10(5) works to provide a ‘clear nexus between the long service leave cessation payment and the wages proposed to be covered by an arrangement’ (EM, p. 19, paragraph 73).A person cannot use RLSLCPs to offset an amount greater than the subclause 10(8) amount (EM, p. 33, paragraph 146). If the RLSLCP is greater than the subclause 10(8) amount, the RLSLCP exactly offsets the subclause 10(8) amount (
proposedsubclauses26(3) and
(4)).If a long service leave cessation payment has been made, the ULPA may specify the payment, including details related to the payment (
proposed subclause 10(4)). Where an ULPA so specifies at least one cessation payment, the arrangement must specify the total amount of these payments (
proposed paragraph 10(6)(b)) and provide details for each employee to whom any of the payments relate
(
proposed paragraph 10(6)(a)).The EM explains that this information is necessary because the capping of the offset from RLSLCPs under
proposed clause 26 operates with respect to a person’s unpaid levy for each relevant employee (EM, p. 19, paragraph 75).
Stage 5: Board consideration of payment arrangement
Proposed clause 14 deals with the Board’s decision on an ULPA. The Board must decide to either approve or refuse to approve the ULPA (
proposed subclause 14(2)) and give written notice of its decision (
proposed subclause 14(4)) with a statement of reasons if the ULPA is not approved (
proposed paragraph 14(5)(a)).
The Board must approve the ULPA under
proposed subclause 14(6) unless the Board is satisfied on reasonable grounds that:
- any of the requirements under proposed clauses 9–12 are not met
- the Board has requested further information under proposed clause 13, and the person has failed to comply with the notice of the request or
- for any employee covered by the ULPA, were the ULPA to be approved, the Corporation would have insufficient information to work out LSL entitlements under Part 5A of the Administration Act relating to a relevant employment period of the employee (this ground of approval is examined below regarding the making of assumptions).
Review by the Administrative Review Tribunal
Proposed clause 17 would allow a person to apply to the Administrative Review Tribunal for review of a decision of the Board to refuse:
- to approve a longer period to
- give a draft payment arrangement under proposed paragraph 6(3)(b)
- give an ULPA under proposed paragraph 9(5)(b) or
- comply with a notice requesting further information under proposed paragraph 13(2)(b)
- to approve an ULPA under proposed paragraph 14(2)(b).
Proposed clause 24 would also allow a person to apply to the Administrative Review Tribunal for review of a decision to refuse to postpone a
target day under the ULPA, or to postpone it to a day that is earlier than the day applied for.
Target days are covered below.
Assumptions for making unpaid levy payment arrangements
The Bill would allow the making of certain assumptions in 2 scenarios:
- before an ULPA is approved: where a person is specifying or including information in the ULPA that the person will give to the Corporation (Collection Act, proposed clause 11)
- after an ULPA is approved: where the Board approves an ULPA and, because of a lack of sufficient information about the employment of a covered employee, the entitlement (if any) of the employee to LSL under part 5A of the Administration Act cannot be worked out (Administration Act, proposed section 39G at item 3).
Assumptions before an unpaid levy arrangement is approved
A person must make certain assumptions when specifying or including information in an ULPA to be given to the Corporation and may make certain other reasonable assumptions.
Proposed clause 11 requires a person to make two assumptions. The first is that ‘eligible wages’ in the Collection Act, had, at all times, the meaning it had on the commencement day of Part 2 of Schedule 1 to the Bill (
proposed paragraph 11(a)). This is intended to ‘avoid the need for employers to identify which definition applied at the time the wages were paid, simplifying calculations’ (EM, p. 20, paragraph 79).The second assumption is that
paragraph 3B(1)(b) of the Collection Act had never been enacted, and that subsection 3B(1) refers only to the base rate of pay paid to the employee including incentive-based payments and bonuses (
proposed paragraph 11(b)). This is designed to ‘eliminate the need to complete two calculations. Usually, an employer is required to apply two similar formulas and adopt the amount which is greater’ (EM, p. 20, paragraph 80).In addition to these mandatory assumptions, a person making an ULPA may make reasonable assumptions where they do not have sufficient information to work out whether an incentive-based payment or bonus was paid, or the amount of timing of such a payment or bonus (
proposed paragraph 11(c)). Such reasonable assumptions must be based on information about incentive-based payments or bonuses paid or intended to be paid to a class of employees, of which the employee was a member.
Assumptions after an unpaid levy arrangement is approved
The Minister would be empowered to make legislative instruments determining the assumptions that may or must be made where LSL entitlements cannot be worked out for a
relevant employment period (Administration Act,
proposed subsection 39G(3)). Any rules made would be subject to Parliamentary scrutiny and sunsetting (EM, p. 11, paragraph 25).The Corporation could also make any reasonable assumptions about the matters about which there is insufficient information (
proposed paragraph 39G(2)(c)).
Proposed subclause 14(7) of Schedule 1 to the Collection Act defines
relevant employment period to mean a period covered by an ULPA, and it
would be defined for the Administration Act in the same way (proposed
subsection 39G(4)).
Interaction with the power to refuse to approve arrangements
As mentioned above, the Board may refuse to approve an ULPA if the Board is satisfied on reasonable grounds that there will be insufficient information for working out certain LSL entitlements (
proposed paragraph 14(6)(c)). The EM explains that this ground ‘is based on the principle that it is not appropriate to approve a payment arrangement where the corresponding employee long service leave entitlement cannot be calculated’ (p. 22, paragraph 92).At the same time, the EM explains that making assumptions is necessary where there is insufficient information, given the historical nature of unpaid levies means no complete or detailed records may exist regarding employees’ qualifying service (p. 10, paragraphs 19–20). The insufficiency of information may be more likely where the FW Act only requires employee records to be kept for 7 years (EM, p. 10, paragraph 18). As a result, it is expected that ‘some employers will have limited historical records to support the preparation of a payment arrangement’ (EM, p. 20, paragraph 78).
Uncertain construction of coverage terms
Special leave to appeal from
Orica was
granted by the High Court of Australia on 6 November 2025. At the time of writing, the outcome of this appeal is unknown; it is possible that the outcome of the appeal may further alter the coverage of the Scheme. Until that appeal is decided, there is uncertainty as to the scope of eligible employees under the Scheme.
Compliance requirements once arrangement is approved
A person who enters into an ULPA must comply with the ULPA to be eligible for 20 per cent of their levy liabilities to be remitted. Additionally, so long as the person is compliant with the ULPA,
proposed subclause 19(2) will disapply specific provisions from unpaid levy covered by the ULPA, namely those relating to:
- the usual provisions under the Collection Act for extension of time and instalment payments
- the accrual of additional penalty levy
- the power to sue the person holding the liability to recover the amount of levy.
Proposed clause 21 provides for where a person complies with an ULPA; a person complies as soon as the target amount for the 6th target day under the ULPA has been paid (
proposed subclause 21(2)).
Proposed clause 28 provides for where a person fails to comply with an ULPA. A person is deemed never to have been compliant with the ULPA if they have not paid a
target amount for a
target day by the end of that
target day (
proposed subclause 21(3)).The EM provides hypothetical examples of compliance and non-compliance (pp. 25–28).
Days and amounts of payments
The terms
target day and
target amount are defined by reference to a table contained in
proposed subclause 22(1):
The first due day is defined under proposed subclause 22(2) as the day that is:
- six months after the day the Board approves the ULPA, if the person is a small business employer under the FW Act on the day the Board approves the ULPA (proposed paragraph 22(2)(b)) or otherwise
- 30 days after the day the Board approves the ULPA.
A person complies with an ULPA where the amount for the
6th target day under the ULPA has been paid (
proposed subclause 21(2)).Under
proposed clause 23, a person may apply to postpone a target day for no later than 6 months after the original target day specified in the table, with no less than 2 months’ notice before the original target day.
Proposed clause 27 provides for the remission of unpaid levy when a person complies with an ULPA. The levy that is remitted is unpaid levy in respect of the wages covered by the arrangement that remains payable by the person at the time of compliance. This will be equivalent to 20% of the payment amount agreed under the ULPA.