Bills Digest no. 69 2009–10
Coal Mining Industry (Long Service Leave Funding) Amendment Bill 2009
WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced
and does not canvass subsequent amendments. This Digest does not have
any official legal status. Other sources should be consulted to determine
the subsequent official status of the Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Date introduced: 18 November 2009
House: House of Representatives
Portfolio: Employment and Workplace Relations
Commencement: 1 January 2010
Links: The 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 at http://www.comlaw.gov.au/.
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.[1]
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.[2] 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 service.
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.[3]
The Hawke Government commissioned
a review of coal mining long service leave funding arrangements in 1990.[4] 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 related
Acts.
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 union-management board
- Producers
pay payroll levy, currently set at 2.7 per cent of payroll,[5] to the Coal Mining Industry (Long Service Leave
Funding) Corporation via the Coal Industry (Long Service Leave)
Payroll Act 1992
- 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.[6]
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 provisions:
… 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 entitlement.[7]
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 Act.
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
service leave)
- 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 2010.
Concluding
comments
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.
[2]. J Dedman, ‘Second Reading Speech: States Grants (Coal Mining Industry Long
Service Leave) Bill 1949’, House of Representatives, Debates,
p. 1794.
[6]. 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.
Steve O'Neill
24 November 2009
Bills Digest Service
Parliamentary Library
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