Coal Mining Industry (Long Service Leave) Administration Act 1992

The Administration Act primarily affects three groups: eligible employees, their employers, and the Corporation itself.

Eligible employees are defined in s.4(1) as national system employees (within the meaning of Fair Work Act 2009 s.13) who satisfy one of four limbs: (a) employed in the black coal mining industry by an employer in that industry whose duties are directly connected with day-to-day operation of a black coal mine; (b) employed in the industry with duties carried out at or about a place where black coal is mined and directly connected with mine operations; (c) permanently employed with a mine rescue service for the purposes of the industry; or (d) a person prescribed by regulation on the Board's recommendation (s.4(2)). The definition expressly excludes persons declared by regulation not to be eligible. The black coal mining industry takes its meaning from the Black Coal Mining Industry Award 2010 as in force on 1 January 2010 (s.4(1)).

Because qualifying service only accrues while an employee remains "eligible", changes in duties, breaks of 8 years or more, or entry into a waiver agreement can interrupt or extinguish accrual (s.39A(2)). Casual employees receive beneficial deeming rules that treat any work in a week as full-week eligibility (s.39A(3)), with further continuity mechanisms in ss.39A(3A)-(3C) to protect against artificial fragmentation. Once an employee has become entitled to LSL, a subsequent 8-year break does not erase that entitlement (s.39A(4)).

Employers are national system employers (Fair Work Act 2009 s.14) engaged in the black coal mining industry. They bear three principal obligations: (i) payment of payroll levy on eligible wages (imposed by the Payroll Levy Act and collected under the Payroll Levy Collection Act); (ii) granting and paying LSL in accordance with Part 5A, including the civil penalty obligations in ss.39AB(3)-(4) (response to application), 39AC (quantum of pay), 39AD (timing of pay) and 39BE (compliance with waiver agreements); and (iii) maintenance of records required by regulations (s.54(2)(a)). Employers are reimbursed from the Fund for LSL payments made (s.44), subject to the Employer Reimbursement Rules made by the Board as legislative instrument (s.45). Where an employer is insolvent, wound up or has ceased to exist, the Corporation may pay the employee directly (s.48), discharging the employer's liability.

The Corporation is the central administrator. Its Board comprises six part-time Directors appointed by the Minister: one each for NSW/Tasmania, Queensland and Western Australia coal companies, two from the Mining and Energy Union, and one representing five listed employee organisations (s.13). The Board must include balanced employee and employer representation in its quorum and voting majorities (ss.17-18, 20). It manages the Fund (s.10), prepares investment plans (s.42), obtains triennial actuarial advice on levy adequacy (s.43), makes the Employer Reimbursement Rules (s.45), determines factual questions for Fund payments (s.49), and decides on waiver agreement approvals (s.39BC). The Corporation also holds information-gathering powers (s.52A) and acts as authorised applicant for civil penalty proceedings (s.49A(2)).

Other affected parties include employee organisations and industrial associations with standing to bring proceedings (s.39DA(2)-(3)), the Minister (who appoints Directors, approves guidelines and borrowing, issues investment principles and receives actuarial reports and reviews), the FWC (which can deal with LSL disputes), and federal courts (which exercise jurisdiction over civil matters and can make remedial orders).

The Act does not apply to non-eligible workers in the industry or to coal mining operations outside the statutory definition of "black coal mining industry". It binds the Crown (s.5), so Commonwealth, State and Territory governments employing eligible employees are covered when acting as national system employers.

Employee rights are predominantly located in Part 5A. An eligible employee who completes 8 years of qualifying service obtains a statutory entitlement to LSL calculated under s.39AA (s.39A(1)). The LSL credit on any day is the aggregate of weekly accruals less leave already taken (s.39AB(5)). Employees may apply in writing to take a minimum 14-day continuous block (s.39AB(1)-(2)). Employers must respond within 14 days; refusal is permitted only on reasonable business grounds (s.39AB(3)-(4)). Payment must be at least the base rate (including monthly incentives and bonuses) or, for casuals, base rate plus quantifiable casual loading or ordinary rate (s.39AC). Payment follows normal cycles or, if an industrial instrument expressly permits, in advance at the employee's request (s.39AD). Public holidays and community service leave within an LSL period do not count against the entitlement and do not break continuity (s.39AE).

On cessation (other than death), an employee with untaken LSL may request payment of the amount that would have been paid had the leave been taken immediately before cessation (s.39C(1)). Similar rights exist for ill-health or retirement at 60+ where the employee has untaken qualifying service (s.39CA), redundancy after 6 years' qualifying service (s.39CB), and death (s.39CC, payable to the legal personal representative). Payments extinguish the underlying entitlement (ss.39CD-39CE). Prior service after a pro-rata payment continues to count for future entitlement unless an 8-year break occurs, but the hours attributable to that service are treated as nil (s.39CE(3)).

Eligible employees of a prescribed class may enter waiver agreements to receive additional remuneration or superannuation contributions in lieu of future LSL accrual (s.39B). The value must match or exceed the foregone levy (s.39B(2)). Agreements must address frequency of payments and variation mechanisms, be lodged and approved by the Board (s.39BC). Approved waivers suspend levy liability (s.39BD) and LSL accrual (s.39A(2)(d)). Employers must comply with the agreement or face a 60-penalty-unit civil penalty (s.39BE).

Employer duties include paying the levy (cross-referenced to the Payroll Levy Act), granting LSL on request unless reasonable business grounds exist, paying the correct amount at the correct time, complying with approved waiver agreements, maintaining records (s.54(2)(a)), and lodging waiver agreements, variations and terminations with the Corporation. Employers are entitled to reimbursement from the Fund for LSL payments made (s.44), determined under the Employer Reimbursement Rules which may differentiate pre- and post-2012 service (s.45(2)).

Corporation duties are both operational and quasi-regulatory. It must maintain the Fund, invest according to Ministerial principles and an actuarial plan (s.42), obtain triennial actuarial advice on levy sufficiency (s.43(1)-(2)), report to the Minister (s.43(5)-(6)), make and maintain the Employer Reimbursement Rules (s.45), determine factual questions for Fund payments (s.49), approve or refuse waiver agreements within 30 days (s.39BC(1)), maintain employment and entitlement records (s.7(da)), monitor levy compliance (s.7(d)), and exercise delegated information-gathering powers (s.52A). The Board must prepare and obtain Ministerial approval for management guidelines (s.11) and keep minutes and records of resolutions (s.21).

Board duties include managing the Corporation's affairs (s.10), ensuring balanced representation in decision-making (ss.17-18), seeking actuarial advice, recommending levy rates, and exercising the statutory discretions in ss.39BC, 44 and 49. Directors are subject to duties of suitability (s.13(9)), avoidance of conflicting paid employment (s.27), material personal interest rules (s.20(3)), and termination grounds (s.28).

Civil penalty provisions (each carrying 60 penalty units unless otherwise stated) appear throughout Part 5A and Part 7A. Executive officers who know of, are positioned to influence, and fail to take reasonable steps to prevent corporate contraventions are personally liable (s.49CE). Courts must consider additional factors when setting penalties for bodies corporate, including the level of personnel involved, due diligence and corporate culture (s.49A(5)).

The Administration Act uses a dual enforcement model: civil penalties enforceable under the Regulatory Powers (Standard Provisions) Act 2014 (Regulatory Powers Act) and, for certain conduct, strict liability criminal offences.

Part 7A applies Part 4 of the Regulatory Powers Act to every civil penalty provision in the Act (s.49A(1)). The Corporation is the authorised applicant (s.49A(2)) and may delegate that function to Directors, employees, contractors or their employees (s.49A(3)). The Federal Court and Federal Circuit and Family Court (Division 2) are relevant courts (s.49A(4)). When setting pecuniary penalties for corporate contraventions, courts must consider, in addition to Regulatory Powers Act s.82(6) matters, the level of employees/officers/agents involved, whether due diligence was exercised and whether the body corporate had a compliance-conducive culture (s.49A(5)).

Specific civil penalty provisions in Part 5A include:

• Employer failure to respond to an LSL application within 14 days or to give reasons for refusal (s.39AB(3)) – 60 penalty units.
• Refusal of LSL other than on reasonable business grounds (s.39AB(4)) – 60 penalty units.
• Failure to pay the correct amount for LSL (s.39AC(1)-(2)) – 60 penalty units.
• Failure to pay at the correct time or in accordance with a permitted advance request (s.39AD) – 60 penalty units.
• Failure to comply with an approved waiver agreement (s.39BE) – 60 penalty units.
• Failure to make cessation payments within 30 days of request (ss.39C(1)-(2), 39CA(2), 39CB(2), 39CC(2)) – 60 penalty units each.

Executive officer accessorial liability is imposed by s.49CE. A court determining whether an officer took "all reasonable steps" must have regard to actions taken to ensure employees, agents and contractors understood compliance requirements and actions taken after the officer became aware of the contravention (s.49CF).

The information-gathering power in s.52A is backed by a 60-penalty-unit civil penalty for non-compliance and a strict liability criminal offence carrying 30 penalty units (s.52A(6)). The notice must warn of the effect of Criminal Code ss.137.1, 137.2 (false or misleading information/documents) and s.149.1 (obstruction of Commonwealth officials).

Enforcement proceedings may be brought by employees, employee organisations or industrial associations with sufficient interest (s.39DA). The Federal Court or Federal Circuit and Family Court (Division 2) may award compensation, grant injunctions (including interim) or make any other order necessary to stop or rectify the effects of a contravention or proposed contravention (s.39DB). Jurisdiction is conferred on those courts for any civil matter arising under the Act or the Payroll Levy Collection Act (s.52C), with matters to be heard in the Fair Work Division where applicable.

No criminal penalties are imposed for LSL entitlement breaches themselves; the scheme relies on civil deterrence, reimbursement discipline and, ultimately, direct payment by the Corporation where employers default (s.48). The Board may determine facts relevant to Fund payments (s.49), and its decisions on waiver approvals and reimbursement amounts are subject to merits review by the Administrative Review Tribunal on application by the affected employee or employer (s.52B).

The Administration Act is deliberately integrated with, yet partially excludes, the broader Australian workplace relations framework.

Fair Work Act 2009 interaction is pervasive. Key definitions (employee, employer, base rate of pay, modern award, enterprise agreement, covers, National Employment Standards, FWC, industrial association, fair work instrument, public holiday) are imported directly from the Fair Work Act (s.4(1)). The LSL entitlement in Part 5A applies to the exclusion of NES Division 9 (s.39E), notwithstanding Fair Work Act s.61. LSL disputes may be dealt with by the FWC as if they were NES disputes (s.39D(2)), with Fair Work Act ss.738 and 739(5) adapted accordingly. Industrial instruments that cover an employee continue to operate to the extent they provide more generous LSL entitlements (s.39EB). The ordinary hours of work definition in s.4(1) defers to industrial instruments where they specify or provide for determination of ordinary hours.

State and Territory LSL laws are wholly displaced for eligible employees and their employers (s.39EA). This creates a uniform national scheme for black coal mining LSL, avoiding the historical patchwork that the original 1949 States Grants legislation sought to address.

Corporations Act 2001 supplies the meaning of "insolvent" used in s.48 (s.4(1)). The PGPA Act applies to the Corporation as a corporate Commonwealth entity, governing reporting, use and management of public resources (note to s.6(2)), investment of relevant money (note to s.39), and termination of accountable authorities for breach of general duties (note to s.28(2)). However, PGPA Act s.59 (investment by corporate Commonwealth entities) is expressly disapplied (s.39), allowing the Corporation to follow its own Ministerial investment principles and actuarial plan (s.42).

Regulatory Powers Act 2014 provides the enforcement machinery for all civil penalty provisions (s.49A(1)). The standard provisions on pecuniary penalties, infringement notices, injunctions and undertakings are thereby incorporated, subject to the additional corporate penalty considerations in s.49A(5).

Legislation Act 2003 is referenced for the rule-making power in s.39A(3C) and the prescription of classes (note to s.4(1)). The Employer Reimbursement Rules are made as legislative instruments (s.45(1)), as are Ministerial rules under s.39A(3C).

Remuneration Tribunal Act 1973 governs Director remuneration (s.24(3)). The Acts Interpretation Act 1901 supplies rules for acting appointments (notes to ss.31-32).

Criminal Code offences for false or misleading information, documents and obstruction are incorporated by reference in s.52A(3) notices.

The Act does not displace general contract of employment rights, workers' compensation statutes (expressly preserved in s.39A(2)(b)(iii)), or superannuation guarantee legislation. Waiver agreements must not reduce the employer's superannuation obligations below the levy-equivalent value (s.39B(2)), but the Act does not otherwise regulate superannuation.

In practice, the most significant interaction is with enterprise agreements and the Black Coal Mining Industry Award 2010. Many agreements incorporate the statutory LSL scheme by reference or provide loading on the statutory minimum. The "not intended to override" language in s.39EB ensures that more beneficial instrument terms prevail.

The Administration Act has been substantially amended since 1992, most notably by the Coal Mining Industry (Long Service Leave) Legislation Amendment Act 2011 and subsequent Fair Work-related reforms.

The 2011 amendments introduced the current direct entitlement model in Part 5A. Prior to 1 January 2012 the scheme operated as a reimbursement-only system under the repealed States Grants (Coal Mining Industry Long Service Leave) Act 1949. Employers paid a levy; the Fund reimbursed LSL payments actually made. The 2011 changes responded to industry concerns about portability, casualisation and inequity between employers with long-serving workforces and those with high turnover. By creating a statutory entitlement, accrual of LSL credits became portable across employers within the industry, funded through the continuing levy. Separate notional accounts were created to preserve pre-2012 entitlements (ss.40(4), 45(2)).

Subsequent amendments aligned the Act with the Fair Work Act 2009, replacing references to the Australian Industrial Relations Commission with the FWC, importing definitions, and applying the Regulatory Powers Act civil penalty framework. The 2024 updates replaced the Administrative Appeals Tribunal with the Administrative Review Tribunal (s.52B) and updated cross-references to the Fair Work Act's community service leave and stand-down provisions.

The object was expanded by inserting paragraph (ab) to reflect the shift from pure funding to direct minimum standards (s.3). Waiver agreements were introduced to give flexibility for high-earning or short-service employees who prefer immediate remuneration or additional superannuation over deferred LSL (Division 2 of Part 5A).

These changes were driven by three policy imperatives: (1) portability in an industry with frequent contractor and site changes; (2) modernisation to match the national workplace relations system; and (3) fiscal sustainability, with regular actuarial reviews required under s.43 to ensure the levy rate remains adequate. The 8-year qualifying period and 13-week entitlement were retained from the pre-2012 award-based system to maintain industry standards while the funding mechanism was nationalised.

The text does not itself contain decided cases; however, the structure of the Act has generated several categories of anticipated or actual litigation.

First, eligibility disputes. The definition in s.4(1)(a)-(b) turns on whether duties are "directly connected with the day to day operation of a black coal mine". Courts are likely to apply the ordinary meaning of that phrase, informed by the Black Coal Mining Industry Award 2010 as at 1 January 2010. Mine rescue employees (limb (c)) and prescribed persons (limb (d)) have clearer coverage, but declarations excluding classes under s.4(1) have been challenged on procedural fairness or ultra vires grounds where the Board recommendation requirement in s.4(2) is not met.

Second, qualifying service litigation. The exclusions in s.39A(2) have produced disputes about what constitutes "unauthorised absence", the scope of the workers' compensation carve-out, and the operation of the casual deeming rules. The interaction between s.39A(4) (preservation of prior entitlement after an 8-year break) and s.39CE(2) (continuation of qualifying service after a pro-rata payment) has the potential to generate double-dipping arguments that the Board will resolve under s.49.

Third, waiver agreement approvals. Board refusals under s.39BC are reviewable by the Administrative Review Tribunal (s.52B). The statutory criteria—eligibility, genuine agreement, value test and adequacy of variation mechanism—invite merits review on the sufficiency of the additional remuneration or superannuation relative to the foregone levy. The "no reasonable grounds for believing the agreement has not been genuinely agreed" test (s.39BC(3)(b)) imports concepts from Fair Work Act agreement-making jurisprudence.

Fourth, reimbursement disputes. Board decisions on reimbursable amounts under s.44 are likewise merits-reviewable. The Employer Reimbursement Rules (s.45) may differentiate pre- and post-2012 service, leading to arguments about correct apportionment of notional accounts.

Fifth, civil penalty proceedings. The accessorial liability provision (s.49CE) and the additional corporate penalty factors (s.49A(5)) are relatively novel in the LSL context. Courts will be required to develop jurisprudence on what constitutes a "corporate culture conducive to compliance" in the coal mining industry, likely drawing analogies from work health and safety and competition law cases.

No High Court challenges to the constitutional basis of the levy or the exclusion of State laws have been recorded in the provided text, but the use of the corporations power and the interstate trade and commerce power to support the national scheme would be the expected foundation. The original 1949 States Grants legislation was upheld; the modern levy-based model has not been tested at that level.

Controversies within the industry have centred on the appropriateness of the 13/416 accrual rate for casualised workforces, the administrative burden of quarterly averaging, and the balance between employee choice in waiver agreements and the protective purpose of LSL. Unions have expressed concern that waiver agreements could be used to pressure employees into forgoing deferred leave; the Board approval requirement and genuine-agreement test are intended to mitigate that risk.

Most practitioners miss three subtle but high-impact features.

First, the casual continuity rules in ss.39A(3A)-(3C) and 39AA(3)-(5). It is not sufficient to look only at weeks in which a casual worked. The Minister may make legislative instrument rules that deem additional weeks within a quarter to be qualifying service even if the employee did not work in them, provided the employee worked in the first and last weeks of the sequence. This can dramatically increase LSL credits for intermittent casuals. Conversely, employers who fail to track quarter-based averaging correctly risk underpaying LSL or facing civil penalties under s.39AC.

Second, the interaction between s.39CE and s.39A(4). An employee who receives a pro-rata payment under s.39CA or 39CB on redundancy or ill-health retirement, then returns to the industry within 8 years, retains the prior qualifying service for future entitlement calculations—but the hours attributable to that service are reset to nil. Many compliance systems treat the service as entirely extinguished, exposing employers to double-payment claims years later.

Third, the strict two-thirds majority voting rule that includes at least two employee-representative and two employer-representative Directors (ss.18, 20). A Board resolution that appears to have majority support can still fail if the employee or employer bloc is underrepresented on the day. This has practical consequences for urgent decisions on waiver approvals or reimbursement disputes. The Minister's fallback quorum power under s.17(2) is rarely used but exists as a safety valve where PGPA Act conflict rules would otherwise prevent a valid meeting.

Additional traps include:

• The 30-day deemed approval rule for waiver agreements (s.39BC(2))—failure by the Board to decide within time automatically approves the agreement, removing any later objection to its value or genuineness.
• The requirement that regulations prescribing additional eligible employees must be recommended by the Board (s.4(2)). A regulation made without that recommendation is invalid, potentially exposing the Corporation to reimbursement claims for non-eligible employees.
• The survival of more generous industrial instrument terms (s.39EB). An enterprise agreement that provides LSL after 7 years or at a higher rate continues to apply; the statutory 8-year/13-week floor is truly a minimum.
• The extinguishment effect of Corporation payments under s.48. Once the Corporation pays an employee because the employer is insolvent, both the employer's liability and the employee's statutory entitlement are extinguished. There is no residual right to pursue the employer for any shortfall.

Compliance professionals should maintain separate pre- and post-1 January 2012 ledgers, automate quarter-based casual averaging, and ensure waiver agreements are lodged immediately upon signing to start the 30-day approval clock.

Compliance begins with accurate classification. Employers must determine whether each worker is an "eligible employee" under s.4(1). For employees whose duties are not obviously mine-site operational, obtain written advice from the Corporation or legal counsel. Maintain a register of eligible employees and update it whenever duties or site locations change.

Levy compliance requires quarterly returns under the Payroll Levy Collection Act. Eligible wages must be identified precisely; salary sacrifice arrangements are disregarded for levy purposes but are taken into account in the base/ordinary rate calculations under s.39AC(3). Where a waiver agreement is in force, the employee is taken not to be eligible for levy purposes (s.39BD), but the employer must still include the employee in returns and comply with the waiver payment obligations.

Record-keeping is mandatory. Regulations made under s.54(2)(a) require employers to keep records of employment, qualifying service, LSL entitlements and amounts that may become payable under Part 7. Records should capture start and end dates of each period of eligibility, nature of absences, weeks worked by casuals, and all LSL applications, grants, refusals and payments. Retain records for at least 7 years after the employee ceases to be eligible.

LSL administration requires written policies that:

• Explain how to calculate qualifying service, including the casual deeming and quarter-averaging rules.
• Provide a standard application form and a 14-day response protocol.
• Document the "reasonable business grounds" that will be relied upon for refusal (these must be assessed case-by-case; blanket policies risk civil penalties under s.39AB(4)).
• Detail payment calculations, including which incentive-based payments and bonuses are included (they must be paid at least monthly).
• Set out the process for handling waiver agreement requests, including mandatory lodging with the Corporation.

For waiver agreements, use the prescribed form if any, ensure the value test is demonstrably met, address frequency and variation mechanisms, obtain signed copies from both parties, and lodge with the Corporation immediately. Do not implement the waiver until the 30-day approval period has expired or written approval is received. If the Board refuses, the agreement is void from the date of notification (s.39BC(5)).

Cessation payments must be processed within 30 days of a written request. Where an employer is approaching insolvency, notify the Corporation early so that s.48 payments can be arranged without gap in employee entitlements.

Board and Corporation governance requires attention to balanced representation, conflict-of-interest rules and the two-thirds majority requirement. Directors must avoid paid employment that conflicts with their functions (s.27). The Corporation must prepare investment plans, obtain actuarial advice every three years, and report to the Minister when the Fund is projected to be sufficient for the next 12 months (s.43(6)).

Annual compliance steps include:

• Review levy calculations and returns for accuracy.
• Reconcile notional accounts with the Corporation's records.
• Update LSL entitlement statements for each eligible employee.
• Assess whether any waiver agreements require variation due to changed circumstances.
• Confirm that all records required by regulation are current and securely stored.
• Ensure that any new enterprise agreement or award variation does not inadvertently reduce LSL below the statutory minimum or create double-entitlement exposures.

Where disputes arise, attempt resolution through the FWC under s.39D before escalating to court. Keep detailed contemporaneous records of reasonable business grounds for any LSL refusal; these will be scrutinised in civil penalty proceedings.

In summary, compliance is achieved by treating LSL as a statutory entitlement rather than a discretionary benefit, maintaining meticulous records that distinguish pre- and post-2012 service, automating casual averaging calculations, routing all waiver agreements through the Corporation's approval process, and budgeting for levy as a non-discretionary cost of employing eligible coal mining labour. Regular reconciliation with the Corporation's records will avoid costly reimbursement disputes years after the event.