Chapter 1Introduction
1.1The Coal Mining Industry (Long Service Leave) Legislation Amendment Bill 2025 (bill) would amend the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992 (Collection Act) and the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Administration Act) to establish a framework for employers to meet their historical unpaid levy liabilities over a six-year period.
1.2In her second reading speech, the Hon Amanda Rishworth MP, Minister for Employment and Workplace Relations (Minister Rishworth), highlighted that this bill 'will deliver fairness and certainty for workers in the black coal mining industry and their employers' and 'ensure eligible workers have a clear pathway to access their hard earned long service leave entitlements quickly and in full'.
Context of the bill
Coal Mining Industry (Long Service Leave Funding) Scheme
1.3The Coal Mining Industry (Long Service Leave Funding) Scheme (Coal LSL Scheme) is an Australian Government initiative that was established in 1949 for the benefit of employees working in the black coal mining industry. The scheme provides for employees in the black coal mining industry to have portable long service leave entitlements, allowing them to accrue leave as they move between sites and employers.
1.4To be eligible for the Coal LSL Scheme, an employee's primary role must be directly related to the daily operations of a black coal mine, with long service leave accrued in hours, based on the employee's employment status (full time, part time or casual). Once a black coal mining industry employee completes at least eight years of qualifying service, that employee is entitled to long service leave.
1.5Under the Coal LSL Scheme, entitlements are funded by a levy on eligible wages, payable by employers of eligible employees. The levies paid are then placed into the Coal Mining Industry (Long Service Leave Funding) Fund (Coal LSL Fund), which is an investment fund managed by the Coal Mining Industry (Long Service Leave Funding) Corporation (Coal LSL Corporation). Once an employee has taken their long service leave, the employer can then claim reimbursement from the Coal LSL Corporation which is paid from the Coal LSL Fund.
Independent review of the Coal LSL Scheme
1.6On 1 June 2021 the then Minister for Industrial Relations, Senator the Hon Michaelia Cash requested an independent review of the Coal LSL Scheme (independent review) to ensure the Coal LSL scheme's 'ongoing success' and to 'meet the industry's changing needs'. KPMG was engaged to undertake the review and in December of 2021, KPMG delivered its independent review report to the Australian Government. The independent review found that:
… for the large majority of employees engaged in permanent positions in the black coal mining industry, the Coal LSL Scheme meets its fundamental objective by connecting eligible employees with their portable LSL entitlement.
1.7However, the independent review found some areas for improvement and made 20 recommendations, with 10 of the recommendations directed to the Australian Government and the remaining 10 directed to the Coal LSL Corporation. In the Australian Government's response to the independent review, it agreed or agreed in principle to all recommendations, except recommendation 10a, which was noted. Several of the recommendations would be implemented by this bill, including:
Recommendation 2: to develop legislative amendments to address legacy issues with past application of coverage provisions
Recommendation 6: to provide for settlement of 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.
Coal Mining Industry (Long Service Leave Funding) Corporation
1.8The Coal LSL Corporation is a corporate Commonwealth entity and the agency responsible for administering the Coal LSL Scheme and managing the Coal LSL Fund. The role of the Coal LSL Corporation is to:
collect funds from employers by way of levy;
invest funds and ensure Fund sufficiency to finance the cost of reimbursements of long service leave;
ensure accurate and compliant record keeping;
reimburse employers’ authorised payments of long service leave; and
enable recognition of long service leave entitlement for eligible employees.
Federal Court decisions
1.9In 2010, amendments were made to the definition of an 'eligible employee' in the Administration Act 'to align with changes in mining operations where components of core mining functions were outsourced to service providers'. These amendments were acknowledged to have created 'significant uncertainty' for what constitutes an eligible employee among stakeholders. The Coal LSL Corporation noted that following these amendments 'employer adherence with statutory obligations has been an ongoing issue'.
1.10Two recent decisions made by the Full Bench of the Federal Court (Hitachi Construction Machinery (Australia) Pty Ltd v Coal Mining Industry (Long Service Leave Funding) Corporation [2024] FCAFC 166 and Orica Australia Pty Ltd v Coal Mining Industry (Long Service Leave Funding) Corporation [2025] FCAFC 65) clarified the Coal LSL Scheme's application to certain black coal mining industry employees who were previously thought to be ineligible by some employers which has resulted in some employers accruing significant liabilities, potentially in the millions of dollars.
1.11This bill seeks to establish a payment arrangement process to provide a sustainable way for employers who have been affected by these two decisions to settle arrears.
Key provisions of the bill
1.12The bill is comprised of one Schedule divided into three parts. The following section provides a summary of the three parts of the bill. This includes the mechanism for employers with unpaid levy liabilities to enter into voluntary payment arrangements, amendments that would replace the defunct method for calculating additional levy payable on late payments with a contemporary rate and, the 20 per cent waiver on outstanding levy liabilities for employers who comply with their unpaid levy payment arrangements.
Unpaid levy payment arrangement
1.13Part 2 of the bill would amend both the Collection Act and Administration Act to provide a framework for resolving historical eligibility disputes for the Coal LSL Scheme in the black coal mining industry. This framework will provide the payment arrangement for employers to repay their debts over a six-year period.
1.14According to the Explanatory Memorandum (EM), the amendments would insert a new Schedule 1 into the Collection Act which would enable voluntary payment arrangements for historical overdue levy payments. It would also amend the Administration Act to permit flexibility when the Coal LSL Corporation is creating or updating black coal mining industry employee records related to historical service. Due to the historical nature of the unpaid levies, the EM acknowledges that records relating to the qualifying service of employees may be unavailable in granular or complete data. To enable the Coal LSL Corporation to update or create an employee's service record, new subsection 39G would allow it to make 'reasonable assumptions' to determine an employee's long service leave entitlement.
Stages of approval for unpaid levy payment arrangements
1.15As explained in the EM, there would be five stages of approval for a payment arrangement:
Stage 1: Opting-in;
Stage 2: Submitting a draft payment arrangement for review by the Coal LSL Corporation;
Stage 3: Review by the Coal LSL Corporation;
Stage 4: Preparing and submitting a ‘final’ payment arrangement; and
Stage 5: Board consideration of payment arrangement.
Stage 1: Opting-in
1.16If an employer is considering entering into a payment arrangement, the first step they must take is to 'opt-in' to the process by giving the Coal LSL Corporation written notice of their intention. This notice of intention must be given before the end of the two months after the unpaid levy calculation day (day after the bill receives Royal Assent).
Stage 2: Submitting a draft payment arrangement for review by the Corporation
1.17Once the employer has opted-in, they must provide a draft payment arrangement to the Coal LSL Corporation. By providing the draft payment, this would facilitate early consultation with the Coal LSL Corporation to identify any issues before the payment arrangement is considered by an auditor and then submitted to the Coal LSL Corporation Board.
1.18The draft payment arrangement would be required to be lodged within six months of the employer providing their written notice of intention. The bill provides for the Minister to determine a longer period, under subclause 6(4) by legislative instrument, to enable flexibility to deal with unforeseen developments that could require immediate or prompt changes. An employer could also request an extension of up to three months, provided this is before the expiry of lodging a draft payment arrangement.
Stage 3: Review by the Coal LSL Corporation
1.19Once an employer has lodged a draft payment arrangement to the Coal LSL Corporation, it must be reviewed and the Coal LSL Corporation must consult with the employer within two months of receipt. During consultation, the Coal LSL Corporation may provide suggestions or advice to the employer on their draft payment arrangement. This stage is to support the employer and minimise the risk of their payment arrangement being refused by the Coal LSL Corporation Board (Coal LSL Board).
Stage 4: Preparing and submitting a ‘final’ payment arrangement
1.20Once a draft payment arrangement has been reviewed by the Coal LSL Corporation, the employer would then be able to submit a final payment arrangement to the Coal LSL Corporation for approval by the Coal LSL Board. The payment arrangement must specify the individual employees who will be covered by the payment arrangement and the periods of qualifying service that the payment arrangement will cover for each of the employees to which they have outstanding unpaid levy debts.
1.21Other requirements for information that would have to be included in the payment arrangement include:
amount which would be paid in instalments (subclause 10(8) amount);
audit report stating that the auditor opines that the subclause 10(8) amount is correct;
information about employees; and if applicable
information about long service leave cessation payments.
Stage 5: Board consideration of payment arrangement
1.22Once submitted, the Coal LSL Board would make a decision either to approve or refuse the payment arrangement within 30 days of lodgement and give written notice of this decision, with a statement of reasons if the payment arrangement is not approved, to the employer. The Coal LSL Board would be permitted to seek further information from the employer, if necessary, and the employer would have 30 days, or longer if approved by the Coal LSL Corporation, to comply with the request.
1.23Should a payment arrangement be refused by the Coal LSL Board, the employer would be able to seek a review from the Administrative Review Tribunal. However, the EM notes that Stage 3 of the process and the audit report is intended to minimise the likelihood of payment arrangements being refused.
Compliance with the approved payment arrangement
1.24Part 3 of the bill amends the operation of certain provisions in the Collection Act, while a payment arrangement is in progress, that relates to an employer's compliance with a payment arrangement.
Compliant employers
1.25An employer would be taken to have complied with their payment arrangement as soon as the target amount (80 per cent) for the sixth target day has been paid (which occurs in the sixth and final year of their payment arrangement). Once an employer has paid 80 per cent of the amount owed, the remaining 20 per cent will be waived. However, the 20 per cent debt waiver would have no impact on worker entitlements and eligible employees would still receive the full entitlements they are owed.
Non-compliant employers
1.26An employer would be considered non-compliant if, come the sixth target day, the employer has paid less than the target amount. Any outstanding amounts at this time would become due and additional levy would apply. The Coal LSL Corporation could sue to recover the unpaid levy amounts, including the additional levy.
Fixing the defunct additional levy rate
1.27Part 1 of the bill would repeal and replace subsection 7(2) of the Collection Act to 'provide a new percentage that would apply to calculate an amount of additional levy payable under subsection 7(1) of the Collection Act'. Currently, subsection 7(2) provides that an amount of additional levy is calculated at two percentage points above the 'maximum indicator interest rate' that is quoted by the Reserve Bank of Australia (Reserve Bank) for that day. The EM notes that this is no longer published by the Reserve Bank.
1.28The proposed change is for the percentage applicable to the additional levy to be two percentage points above the cash rate target most recently published by the Reserve Bank. The EM further states that:
As additional levy accrues daily, the percentage applicable in subsection 7(2) would apply on each day additional levy is owed. This is intended to ensure the additional levy provision functions effectively as a penalty and deters future potential non-compliance with the Scheme.
Financial implications
1.29According to the EM, the bill would not have an impact on Commonwealth finances as the Coal LSL Scheme is funded 'by a levy imposed on eligible wages paid to eligible employees payable by the person who paid those wages'. Any shortfall of levy payments resulting from the proposed waivers would be covered by the Coal LSL Fund:
Given the relatively small number of anticipated payment arrangements, the value of the remittance, and the timeframe and front-loaded nature of instalment obligations, the financial impact of the relevant amendments in Schedule 1 is unlikely to be significant or have an immediate impact on Fund viability.
Consideration by other parliamentary committees
1.30When examining a bill, the committee considers any relevant comments published by the Senate Standing Committee for the Scrutiny of Bills (Scrutiny Committee) and the Parliamentary Joint Committee on Human Rights (Human Rights Committee).
1.31The Scrutiny Committee considered the bill in its Scrutiny Digest 2 of 2026, but made no comment on the bill.
1.32The Human Rights committee considered the bill in its Report 1 of 2026, but made no comment. The EM notes that the bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Conduct of the committee's inquiry
1.33The committee advertised the inquiry on its website and invited submissions by 6 March 2026.
1.34The committee received 7 submissions, which are listed at Appendix 1. The submissions are also available on the committee's website. The committee agreed to conduct the inquiry on the written evidence and did not hold a public hearing.
1.35The committee thanks the organisations who contributed to the committee's inquiry.