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Education and Employment Legislation Committee
23/10/2019
Estimates
EMPLOYMENT, SKILLS, SMALL AND FAMILY BUSINESS
Coal Mining Industry (Long Service Leave Funding) Corporation

Coal Mining Industry (Long Service Leave Funding) Corporation

[15:59]

CHAIR: We now welcome representatives from the Coal Mining Industry (Long Service Leave Funding) Corporation. I welcome Ms Jenkins and Mr Kembrey to their first estimates appearance. Do you wish to make an opening statement?

Ms Jenkins : No.

Senator ROBERTS: Thank you for coming today. This is a very complex issue; we've listened to about eight people, and it's a very serious issue. I have never seen anything like it before. So unless I say otherwise, my questions are directed to Suzanne Jenkins, the acting chief executive officer. Would you please explain why you are accepting payments for supposedly casual production employees when there is no such classification in the federal black coal award?

Ms Jenkins : Thank you for the question. Under our missing service review processes, we assess each application on its merits based on the duties of the employee. On that basis, we will assess them as an eligible employee or not. On the basis of that, we will then ask for an employer to pay a levy for any eligible wages due to that employee.

Senator ROBERTS: Are you saying that all production workers in the black coal industry in New South Wales are full-time?

Ms Jenkins : No.

Senator ROBERTS: Is their classification full-time?

Ms Jenkins : No, I'm not saying that.

Senator ROBERTS: How can you be sure, because the black coal award requires that only full-time employees be working on production.

Ms Jenkins : If it's okay, I'll ask my colleague Mr Kembrey to answer.

Senator ROBERTS: No, I'm asking you.

Ms Jenkins : As I explained, we operate under our legislation, which is the Coal Mining Industry (Long Service Leave) Administration Act. Under that act, we have a definition of what an eligible employee is. It's on the basis of that definition that we assess whether or not an employee is eligible.

Senator ROBERTS: So if there were—

CHAIR: Senator Roberts, if Mr Kembrey is able to assist Ms Jenkins, that certainly would be of benefit to the committee.

Mr Kembrey : Could I just get you to clarify the question again?

Senator ROBERTS: Sure. What I'm really looking at is: has your corporation taken any steps to ensure the information as supplied by the employer to you is correct?

Mr Kembrey : We work with employers that are registered to pay.

Senator ROBERTS: Have you taken any steps to ensure that the information that comes from the employer about the employees they're paying is correct?

Mr Kembrey : Yes.

Senator ROBERTS: What are those steps? What specifically?

Mr Kembrey : Clarification around the payment of the levy. We take it on board from the employer if they're paying a levy in regard to an employee; that the employer considers that employee an eligible employee for the purposes of the act.

Senator ROBERTS: My understanding is that LSL has to report to the federal minister every year, Ms Jenkins.

Ms Jenkins : On a number of matters.

Senator ROBERTS: Correct.

Ms Jenkins : What specific matter are you referring to?

Senator ROBERTS: I understand that when the employers send you a report, it is self-audited. How do you know it's correct?

Ms Jenkins : Every employer is required to undertake an independent audit of their levy returns over the previous financial year. It's not self-audited; it's audited by an independent auditor.

Senator ROBERTS: But it's provided by the employer.

Ms Jenkins : That's correct.

Senator ROBERTS: How do you make sure it's correct?

Ms Jenkins : We have our technical compliance team that reviews audit reports for any notation of error—which there are from time to time—and adjustments are made from that. We don't take it upon ourselves to go and audit the audit reports.

Senator ROBERTS: Have you had any complaints from employees? Have you been approached by employees?

Ms Jenkins : About what?

Senator ROBERTS: About providing pay slips and providing time sheets that disagree with the employer?

Ms Jenkins : Sorry, can you rephrase that question. Have we—

Senator ROBERTS: Have employees, specifically of Chandler Macleod, come to you and shown you that their employers' records are not correct?

Ms Jenkins : We have dealt with a complaint along those lines.

Senator ROBERTS: I've seen eight people, spoken with eight people, and they tell me there are hundreds more.

Ms Jenkins : In terms of how we receive information, we liaise and receive information from an employer. So if an employee—

Senator ROBERTS: Have you done anything about employees who have come to you with records and pay slips and time sheets showing that their employers' records are wrong?

Ms Jenkins : We've had one specific complaint where we've had to take the issue up with the employer, again to ascertain whether or not the records or information we've received was correct, and the employer in that instance confirmed that the records we had received were correct.

Senator ROBERTS: Records from who?

Ms Jenkins : The employer.

Senator ROBERTS: The employer. How is it then that we know of people whose records were incorrect and we know that casual employees have been underpaid and not credited the full 35 hours?

Ms Jenkins : For Coal LSL, our response to an issue that an employee has with their employer is that it's a matter between the employee and the employer.

Senator ROBERTS: So you don't take responsibility for the accuracy of the payments?

Mr Hehir : If it's a matter of an underpayment, that's better addressed to the Fair Work Ombudsman if there's an underpayment of wages.

Senator ROBERTS: We will be doing that, thank you. I'm specifically interested in LSL, because we have met with people in the Hunter Valley, working at a coalmine full-time on a two-year roster projected out, treated as casuals. Whether or not they're underpaid is a separate issue—they have been underpaid. But I'm concerned that they haven't got their full LSL entitlements, and I want to know what you're doing specifically to check.

Ms Jenkins : If we're advised of that through an employee complaint, we take up the issue with the employer, because that is the line of information that we—

Senator ROBERTS: So you accept the employer?

Ms Jenkins : That's what we required to do under the legislation.

Senator ROBERTS: So you've never audited the process?

Ms Jenkins : Excuse me, sorry?

Senator ROBERTS: You've never audited the process to make sure the employer is not correct and the employee is correct?

Ms Jenkins : No.

Senator ROBERTS: You've never investigated the details?

Ms Jenkins : No, we've raised it with the employer to investigate the details, because current—

Senator ROBERTS: So you've taken the employer's word for it?

Ms Jenkins : Yes.

Senator ROBERTS: You say that you've only received one complaint?

Ms Jenkins : Along those lines. I can't be sure. I know of one specific complaint, because I personally handle formal complaints for the corporation.

Senator ROBERTS: You said a minute ago only one complaint, now you're not sure whether it was one complaint. What is it?

Ms Jenkins : We may have received informal complaints, which wouldn't have come through to me. But I can take that on notice and follow up for the committee.

Senator ROBERTS: Yes, please. When inaccuracies occur, why are you only accepting evidence from the employer and not the employee? You're in charge of or responsible for corporate governance, correct?

Ms Jenkins : That is correct, yes.

Senator ROBERTS: So why are you only taking the evidence from the employer?

Ms Jenkins : It's my understanding that that is our requirement under the legislation—that we receive information from employers.

Senator HANSON: Is that correct, Minister?

Senator Payne: I don't have the Coal LSL legislation with me, but I'm very happy to seek advice on that from the relevant agency. Unless Mr Kembrey has anything to add on the provisions of the legislation, I'll take that on notice.

Mr Kembrey : Senator, I think the questions you're asking are quite broad. But, when we have instances where employees—and these are particular employees that may not be receiving a long service leave benefit—provide us with information around what they may have been paid, or argue around their eligibility, that is material that we will review and we will approach employers. We have had cases where we're in disagreement with employers and we have used powers within our legislation to request further documentation for the validation of that. In a situation where we have approximately 50,000 active employees in the industry, it is difficult for us to monitor—

Senator ROBERTS: We know of hundreds of people who are currently being underpaid—not your responsibility—and being underreported for LSL, and they're not being treated fairly. It seems to be that they have complicity in this with a major union, a major employer and a major employer of labour hire people—casual employment under a black coal industry award that is for only full-time employees. I want to know what you're doing to make sure those people are treated fairly, because they haven't been treated fairly. That's why I'm asking Ms Jenkins.

Mr Hehir : If I may assist, my understanding is that there is some disagreement between some employers and the coal long service leave board in relation to who is required to pay levies. My understanding is that the coal long service leave board is attempting to recover funding from those companies. My further understanding is that the Ai Group has made an application to the Fair Work Commission to vary the scope of the Black Coal Mining Industry Award in terms of who's eligible to pay. It's difficult, of course, to know whether the employees you're talking about might be employed by someone who believes they aren't required to pay the levy. There's a possibility—

Senator ROBERTS: These people are being paid the levy. The levy is being paid on their behalf, but it's being underpaid. They're casual workers. They're significantly underpaid, their levy is underpaid, their hours are not reported correctly and LSL is just going along with it.

Mr Kembrey : I can't speak to the specifics of who you're talking about, because I don't have the information in front of me, but if you were to be prepared to provide that information it is something we'd take on notice and investigate.

Senator ROBERTS: Sure. We will be happy to do that. I've never seen such deceitful practices as those I heard about from eight people in the Hunter Valley recently. They've had far-reaching consequences on the lives of these miners. They've suffered with depression, illness and suicide from mistreatment—that's not your responsibility. They're emotionally, physically and mentally exhausted, and the worst of it is that they cannot even access workers compensation. This breach of trust is enormous. I've had a long history in the coal mining industry, and I've never seen people so badly abused. I've been a miner myself. I've been a coal-mining union management member. I've never seen this. The coal miners of New South Wales have a tough reputation. They deserve that and they are entitled to have it. But if this can happen to them, no worker is safe. Every worker should be concerned that this has happened as a result of systemic fraud and abuse by big union, big company, big government. We're going to have more to say about this, but I'll have to constrain myself because this is about LSL. You are not looking after responsibilities for casual employees who are employed on a full-time roster, who work shoulder to shoulder with full-time employees with a roster out two years, who are 40 per cent underpaid, who's hours are not reported correctly with LSL and who are not getting their entitlements. Many leave before they're even paid out their LSL, and I want to know what's happening to that money. If someone leaves the industry or leaves because they just can't keep up with it anymore, what happens to their money that's been paid in?

Ms Jenkins : The money stays in the fund. They have up to eight years to return to the industry, when they could start accruing long service leave again.

Senator ROBERTS: I've sighted correspondence from your corporation to Chandler Macleod in relation to an employee where you did request such advices. That's probably the employee you're talking about. What action has your corporation taken in regard to that particular matter? If no action has been taken, perhaps you might care to explain to this Senate hearing why no action has been taken?

Ms Jenkins : The action that we took was to take the issue up with the employer. When the employer verified that the information we received was correct we went back to the employee and advised him as such.

Senator ROBERTS: Any further action?

Ms Jenkins : No.

Senator ROBERTS: Any investigation of the employer's records?

Ms Jenkins : That was undertaken as part of the investigation prior to contacting the employer. All of that information has been released under an FOI, as well.

Senator ROBERTS: Isn't it the case that if the understatement of the reported hours from employees would result in lost benefit to the employee and in a longer time to accrue long service leave entitlements?

Ms Jenkins : Possibly. We would have to assess that, the merit of that case.

Senator ROBERTS: Wouldn't the eight people who we saw indicate a corporate governance failure?

Mr Kembrey : We aren't able to comment on that without the details. If you provide us with that evidence we will look into it.

Senator ROBERTS: The crux of the issue is, that in the black coal award, all production workers must be full time. You are handling people on a casual employment basis who are classified as casual and under-reporting hours. I will provide that information.

Mr Kembrey : Senator, the only nexus between the legislation and the Black Coal Mining Industry Award is in the definition of 'black coal mining industry'. The two aren't related. If we look at the eligibility of employees to be paid long service leave—

Senator ROBERTS: So you don't care what the classification is? You just act on the report from the employer?

Mr Kembrey : We do care what the classification is. But I think it's confusing the two documents. The only nexus is around the definition. To be an eligible employee for long service leave payments is a different criteria than the award. We refer to the definition within the act, which happens to refer to the definition of 'black coal mining industry' as a part of that definition.

Senator ROBERTS: So, whether they're classified as casual or full time, you treat them as full time when they come to you? You treat them as an employee?

Mr Kembrey : We treat them as an eligible employee for the purpose of the act, that's correct.

Senator ROBERTS: So you don't investigate whether they're casual or full time?

Mr Kembrey : Well, no. We do know that because the levy is paid in different ways, depending on whether the workers are casual, full time, or earning less salary—

Senator ROBERTS: Could you provide more details on that?

Mr Kembrey : In the payroll levy collection act, there are a number of different calculations in terms of how the levy is paid. The levy can be paid in regard to their base rate of salary, plus incentives over time and the like. I think it's 75 per cent of the base rate of pay plus incentives and overtime, or, if it is greater, the amount based on their base rate of pay plus allowances and bonuses. That's one category. There is another category in relation to casual labour, and there is another category in regard to how it's paid, if you're on an annualised salary.

Senator ROBERTS: Thank you.

Mr Kembrey : So that's in the levy collection act.

CHAIR: Just to assist you, Senator Roberts, we've got three minutes left.

Senator ROBERTS: Thank you, Chair. Ms Jenkins, you're only aware of one person that has complained to you?

Ms Jenkins : That's all I am aware of. We can have a look and see if there have been other similar cases, but that's the only formal complaint we have received and followed through with.

Senator ROBERTS: Perhaps you could also find out if it is true that the first two ministers to accept a report that included recognition of casual employees in an industry award that doesn't recognise casual employment were Ms Julia Gillard and Mr Bill Shorten.

Mr Kembrey : I'd have to take that on notice, Senator.

Senator ROBERTS: Sure. As I said, I've sighted correspondence from your corporation to Chandler Macleod in relation to an employee, where you did request advice. We know of other employees—we've talked with eight—who've got that same case. I understand that the LSL is underpinned by the black coal award?

Mr Kembrey : As I mentioned before, the definition of 'eligible employee' in the Coal Mining Industry (Long Service Leave) Administration Act refers to a definition of 'black coal mining industry' that is contained in the award. That is the nexus.

Senator ROBERTS: And the only employees in production in the black coal mining industry in New South must be full time. So how do you have casual employment?

Mr Kembrey : As I explained, the long service leave payment is—we don't discriminate on the basis of full time or casual. The nexus with the award is simply around the definition. So the 'eligible employee' piece in the award goes to the duties of that employee, or the industry that employer acts—so there are two limbs to it, if you like.

Senator ROBERTS: How can he or she be employed in the black coal industry as a full-time worker, on production, unless they are a full-time employee?

Mr Hehir : That's probably not a matter for the Coal Mining Industry (Long Service Leave Funding) Corporation, but Ms Wang might be able to assist you with the answer.

Ms Wang : You are absolutely right: the black coal mining award doesn't allow casual employees for the production workers, but casual workers can be employed under other industrial instruments, such as the enterprise agreement.

CHAIR: That finishes questions for the Coal Mining Industry (Long Service Leave Funding) Corporation. Thank you very much for coming along this afternoon. I understand other senators may have questions on notice, but consider yourselves released and have a safe trip back.