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Education and Employment Legislation Committee
04/03/2020
Estimates
ATTORNEY-GENERAL'S PORTFOLIO
Coal Mining Industry (Long Service Leave Funding) Corporation

Coal Mining Industry (Long Service Leave Funding) Corporation

[12:51]

CHAIR: Welcome. Do you wish to make an opening statement?

Ms Perks : No, thank you.

CHAIR: Brilliant. Senator Roberts.

Senator ROBERTS: Thank you for attending today. My first question is: what has Coal LSL done since last Senate estimates in October to address the errors and wrongs identified in employer data and when will people be compensated? What is the total number and value of the errors uncovered to date?

Ms Perks : In my response I'll firstly address the eight individuals who were identified back in October. Since October, we've had interactions with the eight employees we were made aware of and their employers. We've received and reviewed the information, which has given us visibility of a discrepancy in the records of six of the eight employees. With one of the eight, it was found that an employee had confirmed that the records were correct. We are still assessing the records of the final member of the eight. The data was received late last week. So I'll talk about the six.

Of the six, they are all aligned with one employer. Through that assessment, we understand the employees had a complex employment structure prior to 12 months ago with the employer, which resulted in the administration errors in the reporting of the long service leave hours. That employer amended their structure 12 months ago and is reporting the long service leave hours in the last 12 months in that more simplified manner to minimise any chance of administration errors. However, as we're now aware of these errors which could have arisen from the data prior to 12 months ago, the employer, in discussions with us, has agreed to a review of all of their workforce going back to 2010 to see if there are any discrepancies that need to be amended for that period of reporting.

Senator ROBERTS: Who was the employer?

Ms Perks : It was Programmed TESA Group.

Senator ROBERTS: Now that you've identified some errors and some employees, have you gone through any others?

Ms Perks : The other employees of the eight were linked to another employer who is an employer of casuals in the workforce. There weren't any discrepancies found with that employer and the data that they had submitted. What we are doing now though is assessing whether there are any other anomalies that should be assessed through the employers who employ casual workers. Any misreporting of hours will have an impact in two areas to the fund. One will be a financial impact. The other would be an underaccrual of hours for the casuals. What we're particularly focused on is if there's any under-reporting of hours which are under 35 hours for the casuals, because if the reporting has been at a level of 35 hours a week they would've accrued the equivalent of a full-timer under our legislation. Any discrepancies need to be amended, but we're particularly focused on any discrepancies that could have resulted in an under-reporting of hours for the employees.

Senator ROBERTS: And how wide are you casting the net?

Ms Perks : We'll be looking at all employers who employ casual workers in our records.

Senator ROBERTS: Does Coal LSL believe there is a conflict of interest given that your board comprises directors from black coalmining employer companies and directors appointed to represent the Mining and Energy Division in the Hunter Valley of the Construction, Forestry, Maritime, Mining and Energy Union, especially as these parties have entered into agreements that disadvantage casual black coalmine workers?

Ms Perks : Being a corporate Commonwealth entity, we have obligations under the Public Governance Performance and Accountability Act. Directors who are appointed by the minister have a strict obligation to adhere to their director's duties. If they didn't adhere to their duties, I would suggest that would be dealt with by the minister.

Senator ROBERTS: I see that as a sidestepping. Really, we have got conflicts, potentially, as I see it, between employers who are represented on the Commonwealth reporting entity and, supposedly, representatives of the employees also there and—not the representatives—both entities, the employers and the CFMMEU in the Hunter Valley, have colluded to underpay these casual miners. So surely that must raise alarming questions?

Ms Perks : I can only talk to my interactions with the directors. I have been CEO since January 2017 and all the interactions that I have had with the board through that period have been appropriate, and directors certainly have met their directors' duties. Any conflict of interest, if there's a matter which is particular to a director's day job, the director would make note of that conflict, and the chair would assess whether that director should be removed from the discussion or not have access to the papers. So that is part of our governance regime and is part of every board and subcommittee opening agenda item to address that matter.

Senator ROBERTS: What I'm saying is it is not necessarily that the directors have a conflict; they may be completely ignorant of this. But the lady next to you, Senator Payne, came to me after the last Senate estimates session and said she was very disturbed about the things that were unearthed in Senate estimates. We have got an employee organisation, the CFMMEU in the Hunter Valley, and we have got employers working together to strip miners of their basic entitlements. I mean, that's as plain as day. So surely that's raised questions with you?

Ms Perks : I can only talk to the long service leave scheme.

Senator ROBERTS: What I'm saying is the two entities involved who were on the board, some of their people have been involved in stripping miners of their rights.

Ms Perks : Decisions that are made in the day jobs isn't part of the remit of the board of Coal LSL and the decisions and discussions that are made through our remit.

Senator ROBERTS: Mr Simon Turner's service record is still incorrect. Coal LSL has acknowledged Mr Turner remains, 'An industry eligible employee whilst in receipt of Workers' Compensation payments, and his service history must be amended accordingly.' Yet I hear that, 'Coal LSL has contacted Chandler Macleod a couple of times since to check on the progress of completing the forms,' with no result. Will Coal LSL take immediate action and enforcement action against Chandler Macleod to correct this discrepancy?

Ms Perks : We're in discussions continually with Chandler and Mr Turner and we'll be reviewing the records on hand. Should we see it appropriate to use our powers under section 52A to subpoena information from Chandler, we will, but that will be part of our assessment.

Mr Kembrey : I met with Mr Turner as recently as this week over the phone to discuss his ongoing dispute with his former employer. We have again offered Mr Turner the opportunity to provide us with his records from his perspective so we can review and compare those and engage Chandler Macleod in that discussion. Furthermore, we have undertaken to escalate the matter again with Chandler Macleod. The difficulty that we have, of course, is that we're trying to mediate this dispute between the two parties and we have indicated that, if we don't get a satisfactory outcome and we believe there's still matters to be pursued, matters outstanding, we will use, as Ms Perks said, our powers under the legislation to subpoena material.

Senator ROBERTS: My understanding is that Coal LSL has accepted incorrect employee work hours routinely, where the reported hours are under the work hours—less than the work hours.

Mr Kembrey : Are you talking about in Mr Turner's case?

Senator ROBERTS: Primarily, yes. What action are you taking against Chandler Macleod?

Mr Kembrey : As I said previously, we have talked to Mr Turner about providing what he believes his record should state. As you rightly point out, we have what Chandler Macleod have told us so we want to do some comparative work there because, without Mr Turner's evidence in that regard, we can't pursue that matter further. But the ongoing issue of underreporting, I think, Ms Perks just dealt with in the previous answer to your question. It's something we take seriously and we have ongoing strategies to deal with that.

Senator ROBERTS: Over the past few years, Simon Turner has made three written requests to Chandler Macleod to have his payment made pursuant to the Coal Mining Industry (Long Service Leave) Administration Act. According to section 39CA, payments should be made within 30 days. It has not been made in full. What are you doing about it? Do you give the same answer as the previous one?

Mr Kembrey : Yes, we have encouraged Mr Turner to provide us with the records of some further evidence to assist us in this investigation and hopefully they'll be forthcoming.

Senator ROBERTS: Why did Coal LSL not action a review or audit of data integrity right through your records until such time as this matter was raised in Senate estimates by me? Who's in charge of corporate governance?

Ms Perks : It is Ms Jenkins, who was acting CEO while I was on leave, is in charge of corporate governance. What I will say to answer that question is accurate record keeping is an important part of our functions and we have three mechanisms—

Senator ROBERTS: That's why I'm asking for it.

Ms Perks : I'll answer. We have three mechanisms as an ongoing process to continually verify the records and we hold records for 123,000 employees, so it is a large scheme. We have internal reviews that are ongoing, employee-initiated processes and the independent audit process.

Senator ROBERTS: But correct me if I am wrong, last Senate estimates you just took the word of the employer and didn't check any.

Mr Kembrey : At the last Senate estimates, I think your questions related particularly to Mr Turner. We were dealing with that one individual case but more broadly—

Senator ROBERTS: I stand to be corrected but that's not my understanding. I think I heard somewhere that you never check. Someone said you just take what the employer gives you?

CHAIR: Senator Roberts, that is your last question.

Ms Perks : I was going to give the context of the ongoing review and the further action that we'll be doing. We do rely on the independent audit process, an important part of our data verification. As a result of the visibility of discrepancies that you brought to our attention—thank you—we will be engaging with the auditors to help them better understand certain areas we'd like them to focus on, particularly in regards to calculation of casual hours and levy remits. We will be embarking on an education program with auditors. We will continue to look at how we internally provide stronger review processes to ascertain any discrepancies in hours. As you can appreciate, with casuals, it is complex because of the nature of the work. To see a work pattern and understand a discrepancy is more complex, but certainly we rely on the three mechanisms to continually assess the records and if we do find an error in records, we will do what we can in our powers to update that record.

Senator ROBERTS: I'd like to say thank you. While I appreciate your acknowledgement, the real thanks need to go to people like Simon Turner who have battled, battled, to just get someone to listen.

Proceedings suspended from 13:04 to 14:03