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Coal Mining Industry (Long Service Leave) Legislation Amendment Bill 2011

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2010-2011

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

SENATE

 

 

 

 

COAL MINING INDUSTRY (LONG SERVICE LEAVE) LEGISLATION AMENDMENT BILL 2011

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Tertiary Education, Skills, Jobs and Workplace Relations, Senator the Hon Chris Evans)



 



 

COAL MINING INDUSTRY (LONG SERVICE LEAVE) LEGISLATION

AMENDMENT BILL 2011

 

OUTLINE

This Bill gives effect to proposals, developed by an Industry Working Party (IWP), to reform the long service leave arrangements in the black coal mining industry.  The IWP comprised of representatives from the NSW Minerals Council Limited, the Queensland Resources Council, the Construction, Forestry, Mining and Energy Union - Mining and Energy Division, the Electrical Trades Union, the Australian Manufacturing Workers Union, the Association of Professional Engineers, Scientists and Managers Australia, the NSW Colliery Officials Association and the Mine Managers Association of Australia.

The Bill will amend the following Acts:

·            Coal Mining Industry (Long Service Leave Fund) Act 1992

·            Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992

·            Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992

·            Coal Mining Industry (Long Service Leave Funding) Amendment Act 2009

A priority concern of the IWP was to ensure long service leave entitlements applied universally in the black coal mining industry.  Amendments were made in 2009 to address this concern. Schedule 2 of the Coal Mining Industry (Long Service Leave Funding) Amendment Act 2009 (2009 Amendment Act) extended the preserved award-based long service leave entitlements to all the eligible employees who did not otherwise have an award-derived long service leave entitlement (non-award employees) from 1 January 2010. 

The amendments contained in this Bill implement the remaining reforms proposed in the IWP agreement. 

Minimum entitlements

The Bill legislates the minimum long service leave entitlement for all eligible employees in the black coal mining industry based on the precursor award entitlement.  Provision is made for all eligible employees - full-time, part-time and casual - to accrue long service leave in the black coal mining industry.  An eligible employee will be entitled to long service leave when they have completed a period, or periods, of qualifying service totalling 8 years or more.

The legislated entitlement will allow for greater clarity and transparency in the application of the portable long service leave arrangements in the black coal mining industry.



 

Revised levy and employer reimbursement arrangements

The Bill changes the basis on which the levy is imposed and facilitates changes to the employer reimbursement arrangements. 

A key imperative of the IWP is to improve the operation of the scheme so that the amounts that employers are reimbursed from the Fund in respect of long service leave payments more closely correspond to the amounts that they have paid into the Coal Mining Industry (Long Service Leave) Fund (the Fund) by way of levy.  Accordingly, the definition of eligible wages has been revised to reflect actual remuneration practices in the black coal mining industry.  The Bill also provides for the Board of the Coal Mining Industry (Long Service Leave Funding ) Corporation (the Corporation) to make Employer Reimbursement Rules which will set out how the amount the Corporation will reimburse an employer is to be determined. 

Improved compliance arrangements

The Bill provides for a greater compliance role for the Corporation.  The Corporation has the power to require persons to produce information or documents and standing to pursue alleged contraventions of a civil penalty provision on behalf of the Commonwealth.  Additional penalty provisions have been included and existing penalty levels have been increased in line with contemporary standards.

The Board

The Bill makes changes to the structure and representation of the Board of Directors of the Corporation to better reflect the current industry representative status of certain employee-representative and employer-representative groups, and to increase the terms of directors from 2 to 4 years.  

Transitional arrangements

Schedule 5 establishes a regime for transition from the award-derived long service leave scheme (preserved under section 113 of the Fair Work Act 2009 in respect of award employees and extended to non-award employees by Schedule 2 of the 2009 Amendment Act) to the new statutory long service leave scheme established by this Bill. 

 

FINANCIAL IMPACT STATEMENT

This Bill does not impact on Commonwealth finances.  The scheme is funded by a levy on employers in the black coal mining industry.  The levy is then applied to reimburse employers in respect of long service leave payments made to employees.

 

 

 

Abbreviations used in this EM

 

Meaning

2009 Amendment Act

Coal Mining Industry (Long Service Leave Funding) Amendment Act 2009

 

AAT

Administrative Appeals Tribunal

 

Administration Act

 

 

Coal Mining Industry (Long Service Leave) Administration Act 1992 (the new title of the Coal Mining Industry (Long Service Leave Funding) Act 1992 as amended by this Bill)

 

CFMEU

Construction, Forestry, Mining and Energy Union

 

Corporation

Coal Mining Industry (Long Service Leave Funding ) Corporation , as established by s 6 of the Funding Act

 

Fund

Coal Mining Industry (Long Service Leave) Fund maintained by the Corporation under section 40 of the Funding Act

 

Funding Act

Coal Mining Industry (Long Service Leave Funding) Act 1992

 

FW Act

Fair Work Act 2009

 

FWA

Fair Work Australia

IWP

Industry Working Party

 

Payroll Levy Act

Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992

 

Payroll Levy Collection Act

Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992



 



 

NOTES ON CLAUSES

Clause 1 - Short title

1.          This is a formal provision specifying the short title of the Act.

Clause 2 - Commencement

2.          This clause specifies when the various provisions of the Act commence.

Clause 3 - Schedule(s)

3.          This clause provides that an Act that is specified in a Schedule is amended or repealed as set out in that Schedule.  The Schedule contains amendments to the Coal Mining Industry (Long Service Leave Funding) Act 1992 ; Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992; Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992; and Coal Mining Industry (Long Service Leave Funding) Amendment Act 2009 .

 

4.          Any other item in a Schedule operates according to its terms.





SCHEDULE 1 - LONG SERVICE LEAVE ENTITLEMENT

Overview

5.          The amendments in Part 1 of Schedule 1 establish a statutory long service leave scheme for all eligible employees in the black coal mining industry and provide for consequential amendments.   All eligible employees - full-time, part-time or casual - will be entitled to accrue qualifying service and long service leave credits under this scheme.

 

6.          An eligible employee will be entitled to long service leave when they have completed a period, or periods, of qualifying service of 8 years or more.  An employee will be permitted to have breaks in service in the black coal mining industry of no more than 8 continuous years without losing the periods of qualifying service accrued.  Long service leave credit will be calculated in accordance with the formula set out in clause 39AA.

 

7.          An employee who ceases to be an eligible employee may be paid for their accrued long service leave credits even if they have not qualified for a long service leave entitlement in certain circumstances.

 

8.          This Part also contains provisions which would enable certain types of employees to enter into an agreement with their employer which diverts the payroll levy which would have been payable by the employer to fund the long service leave entitlements of the employee into other payments for the benefit of the employee, for example additional superannuation contributions.  The types of employees eligible to enter into such waiver agreements will be specified in regulations.  These are expected to include employees who are unlikely to accrue enough qualifying service to take long service leave or are unlikely to take long service leave even where they have accrued an entitlement.

 

9.          FWA will be empowered to deal with disputes relating to long service leave.  Breaches of this Part will be civil penalty provisions actionable in the Federal Court or the Federal Magistrates Court. 

 

10.      The amendments in Part 2 of Schedule 1 relate to reimbursements made by the Corporation in relation to long service leave payments made by employers under Part 5A of the Act.  One of the key changes to the scheme agreed by the IWP is in the calculation of the amount that an employer is to be reimbursed.  The intention is that the reimbursement amount in respect of a long service leave payment made to an employee should correspond more closely to the amount that has been paid into the Fund in relation to that employee.  This Part provides for the Board of the Corporation to make Employer Reimbursement Rules which will relate to the amount that an employer is to be reimbursed for a payment by the employer to an employee under Part 5A.  It is intended that the method of calculating the reimbursement amount will differ depending on whether the employee’s qualifying service relates to before, or on or after, 1 January 2012.

 

11.      In addition, this Part includes a revised provision in relation to the payment of the Corporation to an employee or their representative, where the employer is insolvent, being wound up or no longer exists.

 

12.      Part 3 of Schedule 1 includes amendments relating to the title and objects of the Funding Act, which will be renamed the Coal Mining Industry (Long Service Leave) Administration Act 1992.  Part 3 also includes consequential amendments to the Payroll Levy Act and the Payroll Levy Collection Act as a result of these changes.

 

PART 1 - MAIN AMENDMENTS



Coal Mining Industry (Long Service Leave Funding) Act 1992

Items 1 to 23 - subclause 4(1) - definitions

13.      Items 1 to 23 insert definitions into the Funding Act, which will be renamed the Coal Mining Industry (Long Service Leave) Administration Act 1992.

Item 24 - after paragraph 7(d) - maintaining records as a function of the Corporation

14.      Item 24 inserts paragraph 7(da), which will give the Corporation the new function of maintaining records relating to the employment of eligible employees, the qualifying service completed by eligible employees, the long service leave entitlements of eligible employees, the employers of eligible employees and the amounts that are, or may become, payable to employers under Part 7.

 

15.      The Corporation’s records will allow eligible employees, former eligible employees and employers to verify with the Corporation the amount of qualifying service an employee has completed, their long service leave entitlements and amounts that may be payable to employers.

Item 25 - after Part 5 - entitlement to long service leave

16.      Item 25 inserts Part 5A which deals with an eligible employee’s entitlement to long service leave.  

Part 5A - Entitlement to long service leave

Division 1 - Entitlement, amount and grant, etc.

17.      An employee who is an eligible employee will be entitled to long service leave when they have completed 8 years of qualifying service.  The amount of long service leave the employee becomes entitled to after 8 years of qualifying service will be calculated using a formula which includes the employee’s working hours.  Rules will apply as to how the employee is able to take their long service leave and how the employee may be paid for the period of their leave.

Clause 39A - Entitlement to long service leave

18.      Subclause 39A(1) provides that an employee who is an eligible employee will be entitled to long service leave when they have completed a period, or periods, of qualifying service that adds up to at least 8 years.  The 8 year total can be reached by one 8 year period of qualifying service or by adding together two or more periods of qualifying service (so long as those  periods are not separated by a break of more than 8 years).

Qualifying service

19.      Subclause 39A(2) defines qualifying service as a period when an employee is an eligible employee by one or more employers.

 

20.      LSL credit can only be accrued during periods of qualifying service.

 

21.      A period during which an eligible employee is on leave or is absent from work will be a period of qualifying service unless it has been expressly excluded by subclause 39A(2).  The periods which will not count as qualifying service are:

·       a period of unauthorised absence;

·       a period of unpaid leave or unpaid authorised absence, other than:

o    a period of absence under Division 8 of Part 2-2 of the FW Act (which deals with community service leave); or

o    a period of stand down under Part 3-5 of the FW Act; or

o    a period during which the employee is absent from work because of a personal illness, or a personal injury, for which the employee is receiving compensation under a law of the Commonwealth, a State or a Territory that is about workers’ compensation or under an industrial instrument; or

o    a period of leave or absence so prescribed by regulation;

·        if an employee ceases to be an eligible employee for a continuous period of 8 years or more, any period before the break period of 8 years or more;

·       a period of unauthorised absence;

·       any period where a waiver agreement is in effect between the employee and an employer;

·       any period so prescribed by regulation.

 

22.      To avoid doubt, the following periods of absence will be counted as a period of qualifying service:

·       a period of absence under Division 8 of Part 2-2 of the FW Act (which deals with community service leave);

·       a period of stand down under Part 3-5 of the FW Act;

·       a period during which the employee is absent from work because of a personal illness, or a personal injury, for which the employee is receiving compensation under a law of the Commonwealth, a State or a Territory that is about workers’ compensation or under an industrial instrument;

·       a period of leave or absence so prescribed by regulation.

 

23.      An employee will only be able to accrue a maximum one week of qualifying service each week.  For example, an employee who works for two employers during the course of one week will only accrue one week of qualifying service for that week.

 

24.      Historically, where there were breaks in service that exceeded 3 months, the Coal Industry Tribunal or the Australian Industrial Relations Commission determined ‘bridging applications’ if the relevant union or employer organisation could not agree on an application.  Legislating to allow for breaks of up to 8 years gives greater transparency and certainty to the process for employees and employers in the black coal mining industry.  The 8 year break period was agreed upon by the IWP as representing a period that arbitrators never exceeded under the old bridging application system.

Calculation of qualifying service for casuals

25.      A casual employee’s qualifying service will be calculated in one week units.  Where a casual employee is an eligible employee at any time during a week, the employee will be taken to have been an eligible employee for the whole week.

 

26.      For example, where a casual employee works one shift during a week, the employee will accrue one week of qualifying service.  Where a casual employee works one shift which spans two weeks (by starting at the end of one week and finishing at the beginning of another), the employee will accrue two weeks of qualifying service.

Effect of break period once entitled to long service leave

27.      Subclause 39A(4) provides that, despite paragraph 39A(2)(c), if an eligible employee became entitled to long service leave and did not take that long service leave before ceasing to be an eligible employee for 8 or more years, the employee will upon being an eligible employee once more be entitled to count periods of service before their 8 or more year break as qualifying service.



 

 

Example

 

39A(2)(c)

39A(4)

 

Jean was an eligible employee

 

Scott  was an eligible employee

↓

↓

 

Jean did not become entitled to long service leave while she was an eligible employee

 

Scott became entitled to long service leave while he was an eligible employee but did not take it

↓

↓

 

Jean then ceases to be an eligible employee for 8 or more years

 

Scott then ceases to be an eligible employee for 8 or more years

↓

↓

 

Jean then becomes an eligible employee again

 

Scott then becomes an eligible employee again

↓

↓

Jean will not be able to count for the purposes of qualifying service any period which occurred before her break of 8 or more years

 

Scott will be able to count for the purposes of qualifying service the periods which occurred before his break of 8 or more years

 

 

Clause 39AA - Amount of long service leave

28.      Subclauses 39AA(1) and (2) will contain the formula to be used for calculating the number of hours of longer service leave that an eligible employee will entitled to for a week of qualifying service completed by the employee.  The formula is:



 x working hours

 

29.      In the formula, 13 relates to weeks of long service leave the employee will become entitled to and 416 relates to the number of weeks of qualifying service over the 8 years needed to qualify for long service leave (i.e. 8 x 52 weeks = 416 weeks).

Working hours

30.      Working hours will have a different meaning for full-time, part-time and casual employees.

 

31.      It will not be possible for any employee to have more than 35 working hours during one week for the purposes of long service leave accrual.

 

32.      For a person who is a full-time employee at all times during the week, working hours will mean 35 hours.  This will be the case even if the employee actually works more or less than 35 hours during the week.

 

33.      For a person who is a part-time employee at any time during the week, working hours will mean the lesser of (or either of, if they are equal) the total number of ordinary hours of work of the employee, or 35 hours. Ordinary hours of work is defined in subclause 4(1).

 

34.      For a person who is a casual employee at any time during the week (and was not a part-time employee at any time during the week), working hours will mean the lesser of (or either of, if they are equal) the total number of hours worked by the employee as a casual employee during the week, or 35 hours.

Clause 39AB - Grant of long service leave

35.      Subclause 39AB(1) allows an eligible employee to apply, in writing, to his or her employer to take a period of long service leave.  While there are no requirements about how much notice an eligible employee will be required to give his or her employer for this purpose, an employer may refuse to grant the employee’s application to take long service leave under reasonable business grounds under subclause 39AB(4) if not enough notice is given by the employee.

 

36.      An employee will only be able to apply to take a period of long service leave that is a single continuous period of at least 14 days.

 

37.      Also, an employee may only apply to take long service leave if the period they are applying for does not exceed the employee’s LSL credit at the time the leave is to be taken.

 

38.      The note to subclause 39AB(2) alerts the reader that an employee is not taken to be on long service leave on public holidays and during certain other periods of absence, as set out in clause 39AE.

 

39.      As soon as practicable, but no later than 14 days after the application is made, the employer must give the employee a written response stating whether or not the employer grants the long service leave and if the employer refuses to grant the long service leave, the reasons for the refusal.  For this purpose, 14 days means 14 calendar days. Subclause 39AB(6) provides that this will be a civil penalty provision.

 

40.      An employer may only refuse to grant long service leave on reasonable business grounds.  Subclause 39AB(6) provides that this will be a civil penalty provision.  FWA will have jurisdiction to deal with disputes about long service leave, including an employer’s refusal to grant long service leave (see clause 39D).

Meaning of LSL credit

41.      The long service leave credit ( LSL credit ) of an employee on any particular day is calculated by adding the number of hours of long service leave that the employee is entitled to under clause 39AA for each week of qualifying service completed by the employee before the calculation, less the number of hours of long service leave (if any) granted to the employee under this clause.

 

42.      LSL credit can only be accrued during periods of qualifying service.

Example

 

Xavier is a full-time eligible employee who has completed 12 years of qualifying service. Using the formula in clause 39AA, it is calculated that he is entitled to 682.5 hours of long service leave.

 

 x (35 hours x 52 weeks x 12 years) = 682.5

 

Xavier has previously taken 102 hours of long service leave under clause 39AA.



Xavier’s LSL credit is 580.5 hours (682.5 - 102).

 

 

43.      The note to subclause 39AB(5) informs the reader that the number of hours of long service leave that an employee is entitled to in respect of certain qualifying service may be affected by clause 39CE.  Clause 39CE deals with the effect of payment in respect of qualifying service.

 

44.      The amount of LSL credit to be deducted from an employee’s account will be determined by the number of hours they are paid for during their long service leave which will be subject to agreement between the employer and the employee.

Example

 

Erik works part-time for eight hours a day, three days a week and wants to take two weeks’ long service leave.  Erik elects to be paid at his usual part-time rate for the period during which he is on long service leave.  He will be paid for (and have deducted from his LSL credit) 48 hours while he is on long service leave.  Erik’s LSL credit is only deducted by the amount of hours he is paid for (48 hours), regardless of the amount of time he is absent from work (14 days).

 

 

Clause  39AC - Payment for long service leave

45.      If an eligible employee takes a period of long service leave, the employer will be required to pay the employee for the long service leave no less than the base rate of pay before any amounts are deducted under a salary sacrifice arrangement and including incentive-based payments and bonuses that would have been payable to the employee during the period had the employee not taken the leave.  Subclause 39AC(2) provides that this will be a civil penalty provision.

 

46.      The notes to subclause 39AC(2) point the reader to Part 7A and Division 4 of Part 5 which provide pecuniary and other penalties for contraventions of civil penalty provisions.

 

47.      For the purposes of this clause, base rate of pay is the base rate of pay before any amounts are deducted under a salary sacrifice arrangement. An incentive-based payment is one that is paid to the employee at least once a month, and a bonus is one that is paid to the employee at least once a month.

Clause 39AD - Manner of payment for long service leave

48.      If an eligible employee takes a period of long service leave, the employer will be required to pay the employee for the long service leave either at the same time as the employer would have paid the employee during the period if the employee had not taken the leave or, if the employee’s industrial instrument expressly permits the employee to be paid in advance, and the employee requests to be paid in advance, in accordance with the employee’s request.

 

49.      The two options for payment are mutually exclusive.  An employee will be required to make a choice between being paid in advance for all of the long service leave and being paid at the same time as they would normally have been paid during the period.

 

50.      Subclause 39AD(2) provides that this will be a civil penalty provision.

 

51.      The notes to subclause 39AD(2) point the reader to Part 7A and Division 4 of Part 5 which provide pecuniary and other penalties for contraventions of civil penalty provisions.

Clause 39AE - Public holidays etc. not to count as long service leave

52.      Subclause 39AE(1) provides that if a period during which an eligible employee is on long service leave includes a day or part-day that is a public holiday in the place where the employee is based for work purposes, the employee will be taken not to be on long service leave on that whole day, and the public holiday is taken not to break the continuity of the long service leave.

Example

 

Ororo has taken 14 days of long service leave.  The fourth day of her long service leave happens to be a public holiday (Mackay Show Day) in Mackay, Queensland where she lives. Ororo is taken not to be on long service leave for the whole of that day. Ororo is paid for Mackay Show Day as she would be paid for a public holiday if she were not on long service leave.  Mackay Show Day is taken not to break the continuity of Ororo’s long service leave, and despite not being taken to be on long service leave that day, Ororo still fulfils the requirement under paragraph 39AB(2)(a) that an employee may only apply to take a period of long service leave that is a single continuous period of at least 14 days.

 

 

53.      Subclause 39AE(2) provides that if a period during which an eligible employee is on long service leave includes a period of absence from employment under Division 8 of Part 2-2 of the FW Act (which deals with community service leave), the employee is taken not to be on long service leave for the period of absence, and the period of absence is taken not to break the continuity of the long service leave.

Example

 

Andrew has taken 14 days of long service leave.  During his period of long service leave, Andrew spends three days on jury duty.  Andrew is taken not to be on long service leave for those three days.  Andrew is paid for those three days as he would be paid for a period of absence from employment under Division 8 of Part 2-2 of the FW Act if he were not on long service leave.  The three days of jury duty are taken not to break the continuity of Andrew’s long service leave, and despite not being taken to be on long service leave for those days, Andrew still fulfils the requirement under paragraph 39AB(2)(a) that an employee may only apply to take a period of long service leave that is a single continuous period of at least 14 days.

 

 

Division 2 - Waiver agreements

54.      In certain circumstances, an eligible employee may be unlikely to either accrue enough qualifying service or LSL credit to take long service leave, or unlikely to take long service leave even if they have accrued the necessary qualifying service or LSL credit.

 

55.      As such an employee would not take long service leave under this scheme, their employer would not need to claim reimbursement from the Fund in respect of the employee even though the employer will have paid levy in respect of that employee.  To negate the need of an employer of such an eligible employee to pay the payroll levy, the employer and employee may enter into a waiver agreement .  Under a waiver agreement, the employer would be required to make payments for the benefit of the employee (e.g. additional remuneration or superannuation contributions) in lieu of paying levy.  An employee who is party to a waiver agreement will not accrue qualifying service while the waiver agreement is in place.

Clause 39B - Waiver agreements may be made with certain employees

56.      As an alternative to paying the levy in clause 4 of the Payroll Levy Collection Act, an employer may in certain circumstances make a waiver agreement with a prescribed employee.  The kinds of employees who will be able to make a waiver agreement will be prescribed by regulations.

 

57.      An employee who is party to a waiver agreement does not accrue qualifying service for the time that they are covered by the waiver agreement (see paragraph 39A(2)(c)).

 

58.      A waiver agreement allows an employer to either pay additional remuneration to the employee as directed by the employee, or make additional contributions for the employee’s benefit to a superannuation fund nominated by the employee in lieu of paying the payroll levy payable by the employer in respect of eligible wages paid to the employee.

 

59.      The value of the additional remuneration, contributions or both must be equal to or greater than the payroll levy the employer would otherwise have been required to pay

 

60.      If the rate of the payroll levy changes during the life of a waiver agreement so that the value of the additional remuneration or contributions (or both) is no longer equal to or greater than the amount of payroll levy that would have been payable by the employer in respect of eligible wages paid to the employee had the waiver agreement not been in effect, the waiver agreement will be need varied in accordance with the terms of the agreement (see subclause 39B(2)).

 

61.      Subclauses 39B(3) and (4) specify the form and content of a waiver agreement. Subclause 39B(5) requires the employer to lodge a waiver agreement with the Corporation as soon as it is practicable.  The waiver agreement cannot take effect until after it has been lodged with the Corporation.

 

62.      A waiver agreement will take effect from the date that it is specified to take effect (but that date must be after it is lodged with the Corporation).  It will continue to have effect until the Corporation refuses to approve it (under 39BC(5)), it is terminated under clause 39BB or the employee ceases to be an eligible employee or prescribed employee of a kind mentioned in subclause 39B(1).



 

Clause 39BA - Variation of waiver agreements

63.      If a waiver agreement is in effect between an employee and an employer, the employee and employer may agree to vary the agreement.

 

64.      The form of the variation is set out in subclause 39BA(2).  Subclause 39BA(3) requires the employer to lodge a varied waiver agreement with the Corporation as soon as it is practicable.  The variation will have no effect until the varied waiver agreement has been lodged with the Corporation.

Clause 39BB - Termination of waiver agreements

65.      If a waiver agreement is in effect between an employee and an employer, the employee and employer may agree to terminate the agreement. The employer may only refuse to terminate a waiver agreement if the employer has reasonable grounds to do so.

 

66.      The form of the termination is set out in subclause 39BB(3).  Subclause 39BB(4) requires the employer to give the Corporation written notice of the termination, including the date on which the waiver agreement terminates.

Clause 39BC - Approval of wavier agreements and variations by the Corporation

67.      The Corporation has the power to refuse to approve a waiver agreement or variation of a waiver agreement.  Within 30 days after a waiver agreement or a varied waiver agreement is lodged with the Corporation, the Board must decide to approve or refuse to approve the agreement or variation and give the parties to the agreement written notice of the decision.  If the Board does not decide within the 30 day time period, the Board will be taken to have approved the waiver agreement or variation.

 

68.      If the Board refuses to approve a waiver agreement or variation, the Board must set out the reasons for the refusal and include a statement informing the parties that an application may be made to the AAT for review of the Board’s decision.

 

69.      In the event that the Board refuses to approve a waiver agreement, the agreement ceases to have effect on the day the parties are notified of the Board’s refusal to approve.  The waiver agreement will still have been in effect and valid for the period between lodgement with the Corporation and notification of the Board’s refusal to approve.  No back-payment of the levy will be necessary by the employer for the period of time during which the waiver agreement was in effect.

 

70.      In the event that the Board refuses to approve a variation of a waiver agreement, the variation ceases to have effect on the day the parties are notified of the Board’s refusal to approve.  The varied terms of waiver agreement will still have been in effect and valid for the period between lodgement with the Corporation and notification of the Board’s refusal to approve but upon receipt of notification from the Board of the Board’s refusal to approve the variation, the original terms of the waiver agreement will apply.

 

71.      The Board may only approve a waiver agreement or variation if the Board is satisfied that all the requirements in subclause 39BC(3) have been met.  This is to ensure that the waiver agreement or variation is a genuine agreement between the parties who are permitted to make such an agreement.

Clause 39BD - Effect of waiver agreements on payroll levy

72.      The effect of clause 39BD is that no levy under section 4 of the Levy Collection Act is payable by any employer of an employee who is party to a waiver agreement.

 

73.      The note to 39BD clarifies to the reader that returns made by the employer under section 5 of the Payroll Levy Collection Act while the waiver agreement is in effect will still need to include information in relation to the employee.

Division 3 - Payments on cessation of employment as an eligible employee

74.      In a number of circumstances, an eligible employee who has accrued some amount of qualifying service and LSL credit may cease to be employed, or employed as an eligible employee, within the black coal mining industry.  Division 3 provides the circumstances in which such an employee may be paid for their LSL credit.

Clause 39C - Payment on cessation - general

75.      Clause 39C deals with payment where an employee ceases to be an eligible employee and, at the time of ceasing to be an eligible employee, has a period of untaken long service leave under Part 5A.

 

76.      Under subclause 39C(1), such an employee will be able to make a request in writing to their employer for a payment and the employer must, within 30 days after the request, pay the employee no less than the amount that would have been payable to the employee under Part 5A had the employee taken the period of long service leave immediately before ceasing to be an eligible employee, less any amount previously paid to the employee under the clause.

 

77.      If the employee dies before they make the request to their employer, subclause 39C(2) will allow the employee’s legal personal representative the same rights that the employee has under subclause (1). However, if the employee has died, the amount payable to their legal personal representative must be no less than the amount that would have been payable under Part 5A had the employee taken all their untaken long service leave at the time they ceased to be an eligible employee.

 

78.      The employee is entitled to be paid for their untaken long service leave as it is an entitlement they have accrued.

 

79.      Subclauses 39C(1) and (2) are civil penalty provisions and the notes point the reader to Part 7A and Division 4 of Part 5A part which provide pecuniary and other penalties for contraventions of civil penalty provisions.

Clause 39CA - Payment on cessation - ill health and retirement

80.      Clause 39CA deals with payment where an employee ceases to be an eligible employee because of ill health or because of retirement on or after 60 years of age and the employee has completed a period or periods of qualifying service but is not yet entitled to long service leave.

 

81.      Such an employee will be able to make a request in writing to their employer for a payment and, under subclause 39C(2), the employer must, within 30 days after the request, pay the employee no less than the amount that would have been payable to the employee under Part 5A had the employee been entitled to long service leave for the period of qualifying service and taken the period of long service leave immediately before ceasing to be an eligible employee, less any amount previously paid to the employee under this clause.

 

82.      The employee is entitled to be paid for what LSL credit they have accrued, even though they have not accrued a long service leave entitlement, as an acknowledgment that the employee is unlikely or may be unable to return to the black coal mining industry.

 

83.      Subclauses 39C(1) and (2) are a civil penalty provisions and the notes to point the reader to Part 7A and Division 4 of Part 5A which provide pecuniary and other penalties for contraventions of civil penalty provisions.

Clause 39CB - Payment on cessation - redundancy

84.      Clause 39CB deals with payment where an employee ceases to be an eligible employee because of redundancy and has completed at least 6 years of qualifying service.

 

85.      Such an employee will be able to make a request in writing to their employer for a payment and, under subclause 39CB(2), the employer must, within 30 days after the request, pay the employee no less than the amount that would have been payable to the employee under Part 5A had the employee been entitled to long service leave for the period of qualifying service and taken the period of long service leave immediately before ceasing to be an eligible employee, less any amount previously paid to the employee under this clause.

 

86.      The employee is entitled to be paid for the LSL credit they have accrued, even though they have not accrued a long service leave entitlement, as an acknowledgement that the employee ceased to be an eligible employee because of redundancy.

 

87.      Subclauses 39CB(1) and (2) are civil penalty provisions and the notes point the reader to Part 7A and Division 4 of Part 5A which provide pecuniary and other penalties for contraventions of civil penalty provisions.

Clause 39CC - Payment on cessation - death

88.      Clause 39CC deals with payment where an eligible employee dies, whether they have a period of untaken long service leave or were not yet entitled to long service leave but had completed any period or periods of qualifying service.

 

89.      If, at the time of the employee’s death, the employee had a period of untaken long service leave under Part 5A, the employer must, within 30 days after the request is made by the employee’s legal personal representative, pay the employee’s legal personal representative no less than the amount that would have been payable to the employee under Part 5A had the employee taken all their untaken long service leave immediately before the employee died.

 

90.      If, at the time of the employee’s death, the employee was not yet entitled to long service leave but had completed any period or periods of qualifying service, the employer must, within 30 days after the request is made by the employee’s legal personal representative, pay the employee’s legal personal representative no less than the amount that would have been payable to the employee under Part 5A had the employee been entitled to long service leave for the period of qualifying service and taken all of the period of long service leave immediately before the employee died.

 

91.      The provisions which require the employer to make the payment are civil penalty provisions and the notes point the reader to Part 7A and Division 4 of Part 5A that provide pecuniary and other penalties for contraventions of civil penalty provisions.

Clause 39CD - Effect of payment in respect of untaken long service leave

92.      Clause 39CD makes it clear that a payment upon the death of an employee in respect of a period of untaken long service leave will extinguish the employee’s entitlement under Part 5A to the period of untaken long service leave.

Clause 39CE - Effect of payment in respect of qualifying service

93.      Subclauses 39CE(1) and (2) outline when qualifying service will continue to be counted as qualifying service for the purposes of subclause 39A(1) where an employee has been paid an amount under clause 39CA or 39CB.

 

94.      If an employee has been paid an amount under the ‘ill health and retirement’ or ‘redundancy’ payment provisions and becomes an eligible employee again within 8 years of ceasing to be an eligible employee, their qualifying service (for which they were paid an amount) will continue to be a period of qualifying service.

 

95.      However, if that employee subsequently becomes entitled to long service leave in respect of that period of qualifying service, they will not be entitled for any hours of long service leave in respect of that qualifying service.

 

96.      Subclause 39CE(4) makes clear that an employer need only ever make one payment in respect of any particular period of an employee’s qualifying service.

Division 4 - Remedies relating to long service leave

Subdivision A - FWA

Clause 39D - FWA may deal with disputes relating to long service leave

97.      Clause 39D gives FWA jurisdiction to deal with an LSL dispute arising under Part 5A.  FWA’s jurisdiction here is modelled on FWA’s power to deal with a dispute about the National Employment Standards.

Subdivision B - Court orders

Clause 39DA - Employees etc. may apply to court in respect of certain contraventions

98.      Clause 39DA gives the Federal Court and the Federal Magistrates Court jurisdiction to deal with a contravention or proposed contravention of a civil penalty provision under this Part, and also gives standing to employees, employee organisations and industrial associations to apply to the Federal Court or Federal Magistrates Court in certain circumstances.

 

99.      The Federal Magistrates Court may provide a simpler and less expensive jurisdiction for employees.

Clause 39DB - Orders that can be made by the court

100. Clause 39DB allows the Federal Court and the Federal Magistrates Court to make orders arising from a contravention or proposed contravention of a civil penalty provision under this Part awarding compensation, granting an injunction or interim injunction or any other order that the court considers necessary.



 

Division 5 - Relationship with other laws and industrial instruments

Clause 39E - Relationship with the National Employment Standards

Clause 39EA - Relationship with State and Territory long service leave laws       

101. These clauses make it clear that this Part applies to eligible employees and their employers to the exclusion of the provisions in the National Employment Standards dealing with long service leave and any State or Territory laws dealing with long service leave.

Clause 39EB - Relationship with industrial instruments

102. Clause 39EB makes it clear that this Part establishes minimum entitlements and rights in respect of long service leave for eligible employees and does not override more beneficial entitlements or rights arising from an industrial instrument that covers the employee.

Division 6 - Miscellaneous

Clause 39F - Entitlements and rights in respect of long service leave subject to alteration, cancellation etc.

103. Clause 39F makes clear that any benefits or rights in respect of long service leave are subject to cancellation, revocation, termination or variation under legislation and no compensation is payable in that event.

Item 26 - after Part 7 - civil penalty orders

104. Item 26 inserts Part 7A, which deals with civil penalty orders.

Part 7A - Civil penalty orders

Division 1 - Obtaining a civil penalty order

Clause 49A - Civil penalty orders

105. Clause 49A deals with the enforcement of civil remedy provisions by a court.

 

106. Subclause 49A(1) provides that the Corporation has standing to, on behalf of the Commonwealth, apply to the Federal Court or the Federal Magistrates Court seeking an order that a person alleged to have contravened a civil penalty provision pay the Commonwealth a pecuniary penalty.  Subclause 49A(2) provides that such an application must be made within 6 years of the alleged contravention.

 

107. Subclause 49(3) provides that the Court, if satisfied that a person has contravened the civil penalty provision, may order a person to pay to the Commonwealth a pecuniary penalty as determined by the court.  Subclauses 49(5) and 49(6) set the maximum pecuniary penalty.  The maximum penalty is higher under the Administration Act than the Payroll Levy Collection Act and the maximum penalty is 5 times higher for a Corporation than an individual.

 

108. Subclause 49A(7) sets out the relevant matters that the court may take into account in determining the pecuniary penalty.

Clause 49AA - Civil enforcement of penalty

109. Clause 49AA provides that a pecuniary penalty is a debt payable to the Commonwealth and enforceable as a judgement debt.

Clause 49AB - Conduct contravening more than one civil penalty provision

110. Clause 49AB is a standard double jeopardy provision.  It provides that if conduct contravenes more than one civil penalty provision proceedings may be instituted under this Division against a person in relation to the contravention of any one or more of those provisions.  However, subclause 49AB(2) provides that a person will not be liable to more than one pecuniary penalty under a law of the Commonwealth in relation to the same conduct.

Clause 49AC - Multiple contraventions

111. Clause 49AC provides for the circumstance in which a court may make a single civil penalty order against a person for multiple contraventions of a civil penalty provision. 

 

112. Subclause 49AC(2) provides that the penalty must not exceed the sum of the maximum penalties that could be ordered if a separate penalty were ordered for each of the contraventions.

Clause 49AD - Proceedings may be heard together

113. Clause 49AD provides that the court may direct that 2 or more proceedings for civil penalty orders be heard together. 

Clause 49AE - Civil evidence and procedure rules for civil penalty orders

114. Clause 49AE provides that a court must apply the rules of evidence and procedure for civil matters when hearing and determining an application relating to a contravention, or proposed contravention, of a civil penalty provision.

Clause 49AF - Contravening a civil penalty provision is not an offence

115. Clause 49AF makes it clear that a contravention of a civil remedy provision is not a criminal offence and therefore cannot result in a criminal conviction. 

Division 2 - Civil proceedings and criminal proceedings

116. Division 2 includes provisions which support the operation of the dual civil and criminal penalty regime.

Clause 49B - Civil proceedings after criminal proceedings

117. Clause 49B prevents a court making a civil penalty order against a person for a contravention of a civil penalty provision if the person has been convicted of an offence for the same, or substantially the same, conduct.

Clause 49BA - Criminal proceedings during civil proceedings

118. Subclause 49BA(1) provides that where criminal proceedings are commenced or have already been commenced against the person for an offence and the offence is constituted by the same, or substantially the same, conduct the proceedings for a civil penalty order are stayed.

 

119. Subclause 49BA(2) provides that if the person is not convicted the proceedings may be resumed but otherwise they are to be dismissed.

Clause 49BB - Criminal proceedings after civil proceedings

120. Clause 49BB makes it clear that regardless of whether a civil penalty order has been made against a person in relation to the contravention criminal proceedings may be commenced against a person for the same or substantially the same contravention.

Clause 49BC - Evidence given in civil proceedings not admissible in criminal proceedings

121. Subclause 49BC(1) provides that evidence given by an individual in civil proceedings is not admissible in criminal proceedings against that individual. 

 

122. Subclause 49BC(2) provides that subclause 49BC(1) does not apply to criminal proceedings in relation to the falsity of the evidence given by the individual in the proceedings for the civil penalty order.

Division 3 - Miscellaneous

Clause 49C - Ancillary contravention of civil penalty provisions

123. Clause 49C sets out the range of ancillary contraventions of the civil penalty provisions which are taken to be contraventions.

Clause 49CA - Continuing contraventions of civil penalty provisions

124. Subclause 49CA(1) provides that if an act or thing is required under a civil penalty provision to be done within a particular period or before a particular time then the obligation to do that act or thing continues until the act or thing is done regardless of whether the period has expired or the time has passed.

 

125. Subclause 49CA(2) provides that a person who contravenes a civil penalty provision that requires an act or thing to be done within a particular period or before a particular time commits a separate contravention of that provision in respect of each day during which the contravention occurs.  This includes the day the relevant civil penalty is made or any day later.

Clause 49CB - Mistake of fact

126. Clause 49CB sets out the circumstances which will establish the defence of mistake of fact against an alleged contravention of a civil penalty provision.

Clause 49CC - State of mind

127. Clause 49CC provides that it is not necessary to prove a person’s state of mind, including intention, knowledge, recklessness or negligence for any contravention of a civil penalty provision other than subclause 49C(1). 

Clause 49CD - Civil penalty provisions contravened by employees, agents or officers

128. Clause 49CD provides that if an element of a civil penalty provision is done by an employee, agent or officer of a body corporate and that person is acting within the scope of his or her employment or within his or her authority then the element of the civil penalty provision is to be attributed to the body corporate.

Clause 49CE - Civil penalty provisions contravened by executive officers

129. Clause 49CE sets out the range of circumstances in which an executive officer of a body corporate will be taken to have contravened the civil penalty provisions when the body corporate has contravened the civil penalty provision.

Clause 49CF - Establishing whether an executive officer took reasonable steps to prevent the contravention of a civil penalty provision

130. Clause 49CF sets out the circumstances the court is to have regard to in establishing whether an executive officer took reasonable steps to prevent the contravention of a civil penalty provision for the purposes of clause 49CE.

Item 27 - subsection 50(1)

Item 28 - after subsection 50(1) - delegation to a Director only

131. Item 28 inserts a new provision subsection (1A) that provides that the Corporation’s power to issue a notice to produce may only be delegated to an officer of the Corporation.  The definition of ‘officer’ in the Commonwealth Authorities and Companies Act 1997 is referred to.  A director or senior manager of the Corporation will be able to issue a notice requiring a person to produce information or documents under clause 52A.

 

132. Item 27 makes a consequential amendment to subsection 50(1).

Item 29 - after section 52 - power to require persons to produce information or documents

133. Item 29 inserts new provisions relating to the power of the Corporation to require persons to produce information or documents, merits review of certain decisions by the Corporation and the jurisdiction and powers of the Federal Court and the Federal Magistrates Court.

Clause 52A - Power to require persons to produce information or documents

134. Subclause 52A(1) provides that the section applies if the Corporation believes on reasonable grounds that a person has information, or a document containing information, of any of the specified kinds.

 

135. Subclause 52A(2) provides that the Corporation is able to by written notice require the person to give the information to the Corporation by the time, and in the manner and form, specified in the notice, or produce the document, or a certified copy of the document, to the Corporation by the time, and in the manner, specified in the notice.

 

136. Importantly, the privilege against self-incrimination and legal professional privilege are not affected by clause 52A.

Clause 52B - Review by the Administrative Appeals Tribunal

137. Clause 52B provides that certain decisions of the Board of the Corporation can be reviewed by the AAT.

 

138. An employee or employer to whom the decision relates can apply to the AAT for a review of a decision by the Board under subclause 44(1) or (2) which relate to reimbursement for payments relating to long service leave, a decision by the Board to refuse to approve a waiver agreement under clause 39BC and a decision by the Board to refuse to approve a variation of a waiver agreement under clause 39BC.

Clause 52C - Conferral of jurisdiction on the Federal Court and the Federal Magistrates Court

139. Subclause 52C(1) provides that jurisdiction is conferred on the Federal Court and the Federal Magistrates Court in relation to any civil matter arising under the Administration  Act or the Payroll Levy Collection Act.

 

140. Subclause 52C(2) provides for the circumstances in which the jurisdiction conferred on the Federal Court under subclause (1) is to be exercised in the Fair Work Division of the Federal Court.

Clause 52D - Powers of courts

141. Clause 52D makes clear that the powers conferred on the Federal Court and the Federal Magistrates Court are in addition to, and not instead of, any other powers of the Court.

Item 30 - section 54

Item 31 - at the end of section 54 - regulations

142. Item 31 inserts a new subsection in section 54 which allows for Regulations to be made requiring an employer of an eligible employee to maintain records relating to the specified matters.  Subclause 2(b) provides that the regulations may specify a penalty not exceeding 50 penalty units, for offences against the regulations.  Item 30 makes an amendment consequential to the inclusion of subsection 54(2).



 



PART 2 - AMENDMENTS RELATING TO FUNDING

Coal Mining Industry (Long Service Leave Funding) Act 1992



Item 33 - subsection 4(1) - definition of industrial authority repealed

Item 34 - subsection 4(1) - definition of relevant industrial instrument repealed

143. Items 33 and 34 repeal definitions that are no longer relevant to the scheme.

Item 32 - subsection 4(1) - definition of Employer Reimbursement Rules

Item 35 - at the end of subsection 11(1) - payments out of the Fund under clause 44

Item 36 - at the end of section 40 - separate notional accounts within the Fund

Item 37 - subsection 43(1) to (4) - sufficiency of the Fund

Item 38 - subsection 43(5) - obtaining advice from an actuary

Item 39 - subsection 43(6) - reimbursement of employers

Item 40 - sections 44 to 46 - payments to employees if employer insolvent, etc.

144. These items give effect to changed reimbursement arrangements under the amended scheme.   From 1 January 2012 an employer will be reimbursed in accordance with Employer Reimbursement Rules (the Rules) made by the Board of the Corporation.  Under the current scheme, an employer is reimbursed the full amount of any long service leave payments made to an eligible employee irrespective of how much levy has been paid in respect of that employee.  The IWP have agreed to change the way an employer is to be reimbursed so that  the amount an employer is reimbursed for a long service leave payment to an eligible employee will correspond more closely to the amount of levy that has been paid into the Fund in relation to the employee.  It will not always be the case that an employer is reimbursed the full amount that they are required to pay the employee under Part 5A.  It is intended that, in transitioning to the new scheme, the Rules will provide for different reimbursement formulae depending on whether an employee’s qualifying service period occurs before or on or after 1 January 2012.

 

145. Following the commencement of this Act where an employer makes an application to the Corporation to be reimbursed levy for a payment under Part 5A the Corporation must pay the employer out of the Fund an amount decided by the Board in accordance with the Rules.

 

146. Item 32 provides that Employer Reimbursement Rules has the meaning given by clause 45.  Clause 45 provides that the Rules are to be made by the Board and are to be made as a legislative instrument.  The Rules should relate to the amount that an employer is to be reimbursed for a payment by the employer to an employee under Part 5A; the amount that an employer is to be reimbursed for a payment by the employer to the legal personal representative of an employee who is deceased; and the creation of a notional account for each person who is, or was, an eligible employee representing his or her share of payments in the Fund on or after 1 January 2012, whether or not the relevant employer actually receives any of that share.

 

147. Provision is made in subclause 45(2) that the Rules relating to amounts mentioned in paragraphs 45(1)(a) or (b) may be different on the basis of employment as an eligible employee before 1 January 2012 and employment as an eligible employee on or after 1 January 2012. 

 

148. Given that the reimbursable amount will be determined differently for payments relating to whether the employee’s qualifying service period occurs before, or on or after 1 January 2012, item 36 adds a new subsection 40(6) to make it clear that the Corporation may create separate notional accounts within the Fund to reflect payroll levy paid by employers before 1 January 2012 and such levy paid on or after 1 January 2012.

 

149. A note under subclause 44(2) draws attention to clause 52B which provides that an application may be made to the AAT for a review of a decision of the Board as to the amount that is reimbursable to an employer.

 

150. Item 37 repeals subsection 43(1) to (4) and provides that the Board must seek advice from an actuary as to whether the rate of payroll levy being imposed at the time is adequate to ensure that the Fund will be sufficient to reimburse employers in accordance with the Rules and if it is not what rate would be adequate.  The Board is to seek such advice at least once every 3 years.

Item 41 - sections 48, 48A and 48B - payments to employees if employer insolvent etc.

151. Item 41 repeals sections 48, 48A and 48B as they are no longer relevant to the scheme and inserts in their place a provision dealing with payments to employees in the event of their employer’s insolvency, etc.

Clause 48 - Payments to employees if employer insolvent etc.

152. In the event that an employer becomes insolvent, is being wound up or ceases to exist an eligible or former eligible employee may apply in writing to the Corporation for payment in respect of a period of untaken long service leave under Part 5A of the Act.  The Board will then need to verify that the employer is insolvent, being wound up or has ceased to exist and if it finds it to be the case the Corporation must pay the employee in respect of the employee’s untaken long service leave the amount that would have been payable by the employer under Part 5A the amount the employee would have been payable had they taken the period of long service leave immediately before the relevant circumstance.  Unlike the amount the Corporation will ordinarily reimburse an employer which will be determined in accordance with the Rules, the amount will always be the full amount owed by the employer to the employee under Part 5A.

 

153. Subclause 48(4) makes it clear that the payment by the Corporation discharges the liability of the employer to make the payment and extinguishes the employee’s entitlement under Part 5A to the period of untaken long service leave.

 

154. Subclause 48(5) defines employer to make it clear that it is to be the current employer of an eligible employee and for a former eligible employee it is the employer of the employee immediately before the employee ceased to be an eligible employee.





PART 3 - OTHER AMENDMENTS

Coal Mining Industry (Long Service Leave Funding) Act 1992

Item 42 - title

Item 43 - section 1 - name of act

155. Items 42 and 43 amend the long and short titles of the Funding Act to reflect the amendments made by this Bill.  The Funding Act will be renamed the Coal Mining Industry (Long Service Leave) Administration Act 1992 (the Administration Act).

Item 44 - section 3

Item 45 - after paragraph 3(a) - object

Item 46 - paragraph 3(b) - payments made in respect of long service leave

156. These items amend the objects of the Funding Act to reflect the broader operation of the Administration Act.

Item 47 - section 51 - consequential amendment

Item 48 - section 52 - consequential amendment

Item 49 - section 53 - repeal section 53

157. Item 49 repeals section 53, which is an old transitional provision that no longer has effect.  Items 47 and 48 make consequential amendments to  sections 51 and 52.

Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992

Item 50 - subsection 8(2) - insert new title of Administration Act

158. This item makes a consequential amendment to the Payroll Levy Act as a result of renaming the Funding Act the Administration Act (item 43).  

Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992

Item 51 - section 3 - definition of Administration Act

Item 52 - section 3 (definition of Corporation ) - consequential amendment

Item 53 - section 3 (definition of eligible employee ) - consequential amendment

Item 54 - section 3 (definition of Fund ) - consequential amendment

Item 55 - section 3 (definition of Funding Act) - repeal

159. These items make consequential amendments to the Payroll Levy Collection Act as a result of renaming the Funding Act the Administration Act (item 43).      



 



SCHEDULE 2 - CONSTITUTION OF THE BOARD

Overview

160. Schedule 2 provides for changes in the constitution and operation of the Board to better reflect the current industry representative status of certain employee-representative and employer-representative groups, and to increase the terms of directors from 2 years to 4 years.  It also makes a variety of technical and consequential amendments.

Coal Mining Industry (Long Service Leave Funding) Act 1992

Item 1 - subsection 4(1) - consequential amendments

Item 2 - subsection 4(1) - consequential amendments  

161. Items 1 and 2 make consequential changes to subsection 4(1) to reflect the amendments in Items 3 and 4.

Item 3 - subsection 13(2) - appointment of directors to represent New South Wales, Queensland, Tasmania

162. Currently, 2 directors are to be appointed to represent the companies engaged in black coal mining in New South Wales, Queensland or Tasmania.

 

163. Item 3 changes this requirement to 1 director to represent companies in New South Wales or Tasmania and another to represent companies in Queensland.  This reflects the contemporary industry status of companies engaged in black coal mining in these states.

Item 4 - subsection 13(4) - appointment of directors to represent the CFMEU

164. Currently, one director is to be appointed to represent the United Mine Workers Division of the CFMEU.  Item 4 makes provision to have two directors appointed in this role.

 

165. This reflects the contemporary role of the CFMEU in the black coal mining industry.  Item 4 will also replace the reference to the ‘United Mine Workers Division of the Construction, Forestry, Mining and Employees Union’ with a reference to the ‘Mining and Energy Division of the Construction, Forestry, Mining and Energy Union’ which reflects the contemporary structure and name of the CFMEU.

Item 5 - subsections 13(5) and (6) - appointment of directors to represent employee and employer associations

166. Currently, one director is to be appointed to represent the Electrical Trades Union of Australia; the Federated Engine Drivers’ and Fireman’s Association of Australia; and the Metals and Engineering Workers’ Union.  Another director is currently to be appointed to represent the Australian Collieries Staff Association; the Colliery Officials Association of New South Wales; and the New South Wales Mine Managers Association.

 

167. Item 5 makes provision for one director to be appointed to represent the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union; the Association of Professional Engineers, Scientists and Managers Australia; the Colliery Officials Association of New South Wales; and the Mine Managers Association of Australia.  This reflects the contemporary names and industry representative status of these bodies.

Item 6 - subsection 13(7) - Mining and Energy Division of the Construction, Forestry, Mining and Energy Union

168. Item 6 replaces the reference to the ‘United Mine Workers Division of the Construction, Forestry, Mining and Employees Union’ with a reference to the ‘Mining and Energy Division of the Construction, Forestry, Mining and Energy Union’ which reflects the contemporary structure and name of the CFMEU.

Item 7 - subsection 13(8) - consequential amendments

Item 8 - subsection 13(9) - consequential amendments

169. Items 7 and 8 make consequential amendments to subsections 13(8) and (9) to reflect the amendments in items 3 and 5.

Item 9 - subsection 14(4) - consequential amendments

Item 10 - paragraph 14(5)(b) - consequential amendments

170. Item 9 allows a Director to be appointed Chairperson or Deputy Chairperson for up to 4 years (currently 2 years).  Item 10 provides that the offices of the Chairperson and Deputy Chairperson to be rotated every 4 years (currently 2 years) between the two categories of Directors (the two categories being employee-representative Directors and employer-representative Directors).

Item 11 - subsection 17(2) - technical amendment

171. Item 11 replaces the reference to ‘clause 22’ (which has previously been repealed) with a reference to ‘clause 27J of the Commonwealth Authorities and Companies Act 1997 ’.  Clause 27J of the Commonwealth Authorities and Companies Act 1997 deals with restrictions on voting.

Item 12 - paragraph 18(a) - technical amendment

172. Item 12 substitutes ‘directors’ with ‘Directors’ wherever occurring.

Item 13 - section 23 - term of appointment of Directors

173. Item 13 provides that a Director is to be appointed for a period not exceeding 4 years (currently 2 years).

Item 14 - application of amendments

174.  Item 14 provides that the amendments made by Items 3, 4, 5, 9, 10 and 13 apply in relation to appointments or reappointments of Directors, the Chairperson or Deputy Chairperson on or after 1 January 2012. The persons who currently hold these appointments are not affected by these amendments but their successor(s) will be.



SCHEDULE 3 - LEVY AND COLLECTION ARRANGEMENTS

Overview

175. Part 1 of Schedule 3 contains the definitions of base rate of pay and eligible wages , which form the basis on which payroll levy is payable and an employee’s long service leave entitlements are paid.  These amendments are a result of an IWP proposal that is intended to ensure that the amount of levy paid into the Fund in relation to an employee more closely corresponds with the amount reimbursed to an employer for the payment of an employee’s long service leave entitlement.

 

176. Part 2 of Schedule 3 contains amendments relating to the requirement of employers to pay levy, submit returns and provide an annual report to the Corporation. 

 

177. It also amends the penalty amounts of civil penalty provisions so that they are expressed in penalty units rather than dollar values.

PART 1 - AMENDMENTS RELATING TO LEVY

Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992

Item 1 - section 3 - definition of base rate of pay

178.  Item 1 provides that base rate of pay has the same meaning as in the FW Act.  An employee’s base rate of pay will be relevant to the calculation of an employee’s eligible wages (clause 3B).

Item 2 - section 3 - definition of eligible wages

179. Item 2 repeals the existing definition of eligible wages and inserts an amended definition.  It provides that eligible wages has the meaning given by clause 3B.

Item 3 - section 3 - definition of salary sacrifice arrangement

180. Item 3 provides the definition of salary sacrifice arrangement in section 3.  A salary sacrifice arrangement is an arrangement under which an employee chooses to forgo a percentage or amount payable to the employee in relation to the performance of work but receives some other form of benefit or remuneration.

Item 4 - after section 3A - meaning of eligible wages

181. Clause 3B gives the revised meaning of eligible wages .  What constitutes an employee’s eligible wages is determined by the type of employee and the basis on which they are paid.

 

182. Where the eligible employee is a paid a base rate of pay and is not a casual employee, their eligible wages are the greater of:

·       the base rate of pay paid to the employee, including incentive-based payments and bonuses; or

·        75% of the base rate of pay paid to the employee, including:

o incentive-based payments and bonuses; and

o overtime or penalty rates; and

o allowances (other than those for reimbursement of expenses).

 

183. Where the eligible employee is paid an annual salary, the eligible wages are the annual salary paid to the employee, including incentive-based payments and bonuses but excluding:

·            overtime or penalty rates; and

·            shift-loadings.

 

184. Where the eligible employee is a casual employee, the eligible wages are the base rate of pay paid to the employee including incentive-based payments and bonuses.

 

185. A casual employee’s base rate of pay is determined by what the casual employee is actually paid as a base rate of pay.

 

186. Base rate of pay is the base rate of pay before any amounts deducted under a salary sacrifice arrangement and a reference to the annual salary is a reference to the annual salary before any amounts are deducted under a salary sacrifice arrangement.

 

187. An incentive-based payment is a payment that is paid to the employee at least once a month and a bonus is a bonus that is paid to the employee at least once a month.

Item 5 - application of Item 4

188. This item provides that the amendment made by item 4 of this Schedule applies in relation to levy payable in respect of employment on or after 1 January 2012.



 



PART 2 - AMENDMENTS RELATING TO AUDIT AND REPORTING REQUIREMENTS ETC.

Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992

Item 6 - section 3 - definition of employer

189. This item provides that ‘employer’ has the same meaning as in the Administration Act.

Item 7 - section 3A - consequential amendment

Item 8 - at the end of section 3A - physical elements for certain offences

190. Item 8 inserts a new subsection 3A(2) that contains a table outlining the physical elements for certain offences.  Item 7 is a consequential amendment.

Item 9 - section 4 - due date for payment

191.  Item 9 substitutes a new section 4 which provides that levy is payable at the same time that a return is required by the Levy Collection Act - that is, 28 days after the end of a month in which a person employs an eligible employee (see item 10).

 

192. The amendment made by this item applies in relation to levy payable in respect of employment on or after 1 January 2012 (see item 21).

Item 10 - subsections 5(1) and (1A)

Item 11 - subsection 5(3) - returns by employers and offence of strict liability

193.  Items 10 and 11 clarify the existing offence relating to employers’ returns.

 

194. Item 10 substitutes a new subsection 5(1) which requires a person who employs an eligible employee at any time during a month to make a return within 28 days after the end of that month, in accordance with subclause 5(2).

 

195. Item 11 substitutes a new subsection 5(3) which makes it an offence of strict liability for a person to contravene the requirement in subsection 5(1) to make a return.  The penalty is 30 penalty units.  The notes point the reader to clause 6.1 of the Criminal Code for offences of strict liability and to subsection 3A(2) of this Act for the physical elements of this offence.

 

196.  The amendments made by items 10 and 11 apply in relation to returns made in respect of employment on or after 1 January 2012 (see item 22).

Item 12 - subsection 9(2) - consequential amendment

Item 13 - subsections 9(3) and 9(4) - annual report of Corporation

197. Item 13 repeals the existing subsections 9(3) and (4). The Board is no longer required to give notice to the Minister before proceedings are brought to recover unpaid levy.  The Minister no longer has the option to make directions as to how amounts paid as a result of recovery of levy or additional levy are dealt with.  Item 13 inserts a new subsection 9(3) which details information about recovery of levies that must be contained in the annual report of the Corporation.  The annual report of the Corporation for a financial year must include the particulars of any amounts paid to, or recovered by, the Corporation or another person under the recovery of levy or additional levy provisions during the financial year.

 

198. The note to subsection 9(3) points the reader’s attention to section 9 of the Commonwealth Authorities and Companies Act 1997 , which imposes annual reporting requirements.



199.  The amendment made by item 13 applies to the financial year that started on 1 July 2011 and to later financial years (see item 23).

Item 14 - section 10 - reporting requirements about payment of levies

200.  Item 14 repeals section 10 and substitutes new sections 10, 10A and 10B which strengthen the audit reporting requirements of the scheme.

 

201. New section 10 now requires any person who employs an eligible employee at any time during a financial year to provide the Corporation a report prepared by an auditor no later than 6 months after the end of that financial year. This clarifies that all employers of eligible employees are required to provide an auditor’s report, not just those employers who are required by the Corporations Act 2001 to appoint an auditor.

 

202. New section 10 also requires the employer to provide the Corporation with an auditor’s report, rather than an auditor’s certificate as is currently required.  The auditor’s report requires the auditor to do more than merely certify that the information provided by the employer is correct.  The auditor’s report should contain the auditor’s opinion whether the person has paid all amounts of levy or amounts of additional levy that the person was required to pay; and if the person has not - in what respect and to what extent the person has not paid those amounts; and if the person was paid an amount under Part 7 of the Administration Act (dealing with payments out of the Fund) - whether the amount paid is correct.  Notably, paragraph 10(1)(d) requires the auditor to provide reasons for the opinions contained in the report.

 

203. New section 10A allows the Corporation to require, by written notice, the auditor of a person who employs an eligible employee at any time during a particular period to give a report.  The auditor’s report should contain the auditor’s opinion on whether the person has paid all amounts of levy or amounts of additional levy that the person was required to pay; and if the person has not - in what respect and to what extent the person has not paid those amounts; and if the person was paid an amount under Part 7 of the Administration Act (dealing with payments out of the Fund) - whether the amount paid is correct.

 

204. The Corporation can specify a time in the notice by which the auditor must provide the report to the Corporation, but that time must be at least 28 days after the notice is given to the auditor.

 

205. Notably, paragraph 10A(1)(d) requires the auditor to provide reasons for the opinions contained in the report.

 

206. As is currently the case under section 10, failure to comply with these enhanced audit reporting requirements are offences of strict liability.  However, the penalties have been increased from $1000 to 30 penalty units.  Audit reports are the principal source of information for the Corporation to ensure levies payable by employers are in fact being paid.  Failure by some employers to pay levies would impact on the Corporation’s ability to reimburse long service leave payments made by employers and would, over time, result in an increase in the rate of the payroll levy applied to employers.  These measures are aimed in part at ensuring that an equitable share of the cost of long service leave is borne by employers of eligible employees.

 

207. New sections 10 and 10A apply to the financial year that started on 1 July 2011 and to later financial years (see items 24 and 25 respectively).

 

208. New subsection 10B(1) replaces the existing subsection 10(4) and provides that the employer is  liable to pay an auditor such fees as the auditor reasonably charges for preparing a report in respect of the person for the purposes of clause 10 or 10A.

 

209. New subsection 10B(2) provides that if a person’s auditor gives a report under subsection 10A(1) and the report states that, in the opinion of the auditor, the person has paid all amounts of levy or additional levy that the person was required to pay in respect of the period, the Fund will reimburse to the person the amount they paid to the auditor under subsection 10B(1).

Item 15 - subsection 12(4) - penalty

Item 16 - subsection 13(8) - penalty

Item 17 - subsection 13(8B) - no defence of reasonable excuse for failure to comply with notice

Item 18 - 14(3) - penalty

 

210. Items 15, 16 and 18 update the penalty provisions to accord with the current drafting style to provide for the penalties in penalty units.  Item 17 removes the defence of reasonable excuse for failure to comply with a notice.



 

Item 19 - after paragraph 15(e) - requirement for employer to appoint an auditor

211. Item 19 inserts paragraph 15(ea) to allow the Governor-General to make regulations requiring employers to appoint an auditor.

Item 20 - paragraph 15(f) - maximum fine able to be prescribed by regulations

212. The maximum fine able to be prescribed by regulations under paragraph 15(f) for offences against the regulations will be 50 penalty units instead of $1000.

Item 21 - application of item 9

213.  Item 21 provides that section 4 of the Payroll Levy Collection Act, as substituted by item 9 of this Schedule, applies in relation to levy payable in respect of employment on or after 1 January 2012.

Item 22 - application of items 10 and 11

214. Item 22 provides that the amendments made by items 10 and 11 of this Schedule apply in relation to returns made in respect of employment on or after 1 January 2012.

Item 23 - application of item 13

215. Item 23 provides that the amendment made by item 13 of this Schedule applies to the financial year that started on 1 July 2011 and to later financial years.

Item 24 - application of clause 10 of the Payroll Levy Collection Act

216. Item 24 provides that section 10 of the Payroll Levy Collection Act as inserted by item 14 of this Schedule, applies to the financial year that started on 1 July 2011 and to later financial years.

Item 25 - application of clause 10A of the Payroll Levy Collection Act

217. Item 25 provides that section 10A of the Payroll Levy Collection Act as inserted by item 14 of this Schedule, applies to the financial year that started on 1 July 2011 and to later financial years.

Item 26 - application of items 15 to 18

218.  Item 26 provides that the amendments made by items 15 to 18 of this Schedule apply in relation to acts and omissions that occur on or after 1 January 2012.  If an act or omission is alleged to have occurred between 2 dates, one before and one on or after 1 January 2012, the act or omission is taken to have occurred before 1 January 2012.



 



SCHEDULE 4 - AMENDMENT OF THE COAL MINING INDUSTRY (LONG SERVICE LEAVE FUNDING) AMENDMENT ACT 2009

Overview

219. This Schedule makes a small technical amendment to Schedule 2 of the 2009 Amendment Act.



220. Schedule 2 of the 2009 Amendment Act extended long service leave entitlements to all eligible employees in the black coal mining industry who did not have an award-derived long service leave entitlement at that time (non-award employees), with effect from 1 January 2010.  This provision was intended to operate prospectively, that is, only service after 1 January 2010 would be qualifying service for the purposes of calculating the long service leave entitlements of non-award employees.  Although intended to operate prospectively, it may be arguable that the provision as drafted could allow service before 1 January 2010 to be taken into account in calculating the post-1 January 2010 long service leave entitlements of non-award employees.  This was not the intention of the IWP when they agreed to extend long service leave entitlements to non-award employees. 

 

221. As part of the transitional arrangements to move eligible employees from the award-derived long service entitlement (preserved under section 113 of the FW Act in respect of award employees and extended to non-award employees by Schedule 2 of the 2009 Amendment Act) to the new statutory entitlement established by this Bill, the IWP has agreed that all eligible employees in the black coal mining industry, including non-award employees, would have their qualifying service from 1 January 2000 assessed under the new rules.   

 

222. The combined effect of this amendment to Schedule 2 of the 2009 Amendment Act, together with the transitional provisions in Schedule 5 of the Bill, ensure that long service leave entitlements of non-award employees in the black coal mining industry will be calculated on the basis of accrued service dating back to 1 January 2000.

Item 1 - Subitem 1(4) of Schedule 2 - definition of employment as an eligible employee

223. Item 1 amends subitem 1(4) of Schedule 2 of the 2009 Amendment Act to insert a definition of employment as an eligible employee to clarify that service completed by a non-award employee between 1 January 2000 and the commencement of the Bill will be service for calculating eligibility for long service leave. This item takes effect from 1 January 2010, the date on which non-award employees in the black coal mining industry became eligible for long service leave.

Item 2 - Schedule 2 - repeal

224. Item 2 repeals Schedule 2 of the 2009 Amendment Act on commencement of the main provisions of the Bill, that is, on 1 January 2012.  As the Bill establishes a statutory entitlement to long service leave for all eligible employees in the black coal mining industry on the same basis as the award existing in 2009 and for non-award employees for service accruing from 1 January 2000, this Schedule is spent. 



SCHEDULE 5 - TRANSITIONAL PROVISIONS

Overview

225. Schedule 5 establishes a regime for transition from the award-derived long service leave scheme (preserved under section 113 of the FW Act in respect of award employees and extended to non-award employees by Schedule 2 of the 2009 Amendment Act) to the new statutory long service leave scheme established by this Bill.  In effect, the transitional regime applies the new aggregate service rules to all qualifying service completed by eligible employees and former eligible employees between 1 January 2000 and 31 December 2011.

 

226. The Corporation is required to calculate the periods of service of all employees since 1 January 2000 and the entitlement to long service leave for each employee whose period of service totals at least 8 years and qualifies the employee for long service leave.

 

227. The Corporation will keep a record of all service for eligible employees in the industry and an associated record of income from levy payments generally attributable to each employee.  This record will be the basis for determining payment to the employer in accordance with Employer Reimbursement Rules which the Corporation will make.  .

PART 1 - PRELIMINARY



Item 1 - Interpretation

228. Item 1 defines terms relevant to the transitional provisions.



PART 2 - RECOGNITION OF LONG SERVICE LEAVE BEFORE 1 JANUARY 2012



Item 2 - Recognition of long service leave - eligible employees

229. Item 2 requires the Corporation to calculate the periods of qualifying service during the 12 years before the commencement of the new law for all employees that are eligible employees on or after 1 January 2012.  The Corporation will have the names of all current eligible employees through the payroll levy collection process.  Where an eligible employee’s service totals at least 8 years, the Corporation will also calculate that employee’s entitlement to long service under Part 5A.

Item 3 - Recognition of long service leave - former eligible employees

230. Item 3 enables former eligible employees to apply to the Corporation to have any periods of qualifying service during the 12 years before the commencement of the new law recognised as qualifying service.  An application must be made on or before 30 September 2012 (unless a later date is prescribed by the regulations) and must include the required information - periods of employment as an eligible employee, whether the employment was full-time, part-time or casual, and the employer for each period.  The Corporation must verify that information and, if the information is correct, calculate the employee’s entitlement to long service leave.  If the information is not correct the Corporation must take steps to resolve what periods of service and what entitlement falls within the new law.

Item 4 - Recognition of long service leave before 1 January 2000

231. Item 4 clarifies that the entitlement of award employees to long service leave arising from service before 1 January 2000 is not affected by items 2 and 3.  However, any service before 1 January 2000 will be assessed in accordance with the old rules (i.e., any applicable award-derived long service leave terms as preserved by section 113 of the FW Act) rather than in accordance with the new rules.

 

232. Non-award employees who did not have any entitlement to long service leave before the enactment of the 2009 Amendment Act will not have any service before 1 January 2000 recognised for long service leave purposes. 

Item 5 - Certain service not recognised

233. This item prevents ‘double-dipping’ in calculating an employee’s qualifying service under the transitional provisions.  Service is not recognised for the purposes of accruing a long service leave entitlement where an employee had expressly bargained away that entitlement as part of negotiations under an Australian workplace agreement or where the employee had already taken long service leave before 1 January 2012, whether under the industry scheme or a State law.



PART 3 - KEEPING RECORDS OF RECOGNISED LONG SERVICE LEAVE



Item 6 - Records relating to eligible employees

234. Item 6 requires the Corporation to notify each eligible employee, on or before 30 September 2012 (or a later date prescribed by the regulations), of the contents of its records in so far as they relate to that employee, including the employee’s employment as an eligible employee, his or her employer/s and completed qualifying service with the leave entitlement for that service calculated under item 2.   Item 6 also allows an employee to seek to correct the Corporation’s record if he or she considers that any of the information is incorrect or incomplete.  The Corporation is also required to provide the employee’s current employer(s) with the same information.

Item 7 - Records relating to former eligible employees

235. Item 7 requires the Corporation to notify each former eligible employee who has made an application under item 3, on or before 31 December 2012 (or a later date prescribed by the regulations) of the contents of its records in so far as they relate to that employee, including the employee’s employment as an eligible employee and the employer/s of that employee as well as the calculation made under item 3.

Item 8 - Interaction with the new law

236. Item 8 provides for the interaction of the calculation made by the Corporation during the transitional period with the ongoing operation of the new law established by the Bill.  This means that the calculations of periods of service since 1 January 2000 that qualify for long service leave and, if eligible (by qualifying service adding up to 8 years) the amount of accrued leave during the transitional period will entitle the employee to long service leave as part of the new law.

 

237. Once the transitional period has ceased an employee will accrue long service leave entitlements under the new law but will no longer be eligible to have the service assessed between 1 January 2000 and 31 December 2011 as eligible service under the new law. 

 

238. Item 8 also provides that the qualifying service assessed under the transitional provisions will be added to the leave entitlement that is accrued under the new law (under paragraph 39AB(5)(a).

 

239. As set out above, item 4 clarifies that no employee who had an award-derived long service entitlement dating back before 1 January 2000 will be adversely affected, as that entitlement will continue to be assessed and employers will continue to be reimbursed for long service leave payments under the old law. 

 

240. As part of the new law, disputes between an employer and an employee about the employee’s entitlements will fall within the jurisdiction of FWA under clause 39D in Part 1 of Schedule 1.

Item 9 - Records created after 1 January 2012

241. Item 9 clarifies that a person who is not an eligible employee in the black coal mining industry on 1 January 2012 will only have the benefit of the transitional rules if he or she makes an application within the period specified in item 3.  If no application is made during the transitional period, that employee’s long service leave entitlements will be calculated in accordance with the old rules  (i.e., any applicable award-derived long service leave terms as preserved by section 113 of the FW Act) rather than in accordance with the new rules.





 

PART 4 - MISCELLANEOUS

Item 10 - Actuarial advice relating to sufficiency of fund

242. Item 10 requires the Board of the Corporation to obtain advice from an actuary whether the payroll levy is adequate to meet the reimbursement of employers under the Employer Reimbursement Rules and if not the rate of levy that would be adequate.

Item 11 - Transitional regulations

243. Item 11 allows for the making of regulations to give effect to the transitional provisions.  The making of these regulations will facilitate the smooth transition from the old scheme to the new scheme, in particular the administrative arrangements for the calculation of the new entitlements of current and former eligible employees.  The regulations will also allow for matters of a transitional nature to assist with the smooth transition to the new law in the new Part 5A relating to entitlement to long service leave and Part 7 relating to the amounts that are or may become payable to employers.