Creates a formal process that lets employers with historical unpaid coal‑mining long service leave (LSL) levy debts enter into a negotiated repayment plan with the Coal Mining Industry (Long Service Leave Funding) Corporation (the Corporation). (See proposed Schedule 1 to the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992.)
Replaces the existing method for calculating the extra penalty levy that applies to late levy payments. (Amendment to the Collection Act, Schedule 1 Part 1.)
Allows certain assumptions to be used when calculating historic liabilities where employers lack complete employee records. The Minister may make rules (legislative instruments) about the assumptions that may or must be used, and the Corporation may make reasonable assumptions in individual cases. (Administration Act, proposed section 39G; Collection Act, proposed clause 11.)
Sets out a multi‑stage approval process for an unpaid levy payment arrangement (ULPA): an employer opts in, prepares a draft arrangement, gets that reviewed by the Corporation, submits a final ULPA, and the Corporation’s Board approves or refuses it. (Proposed Schedule 1, Parts 2 and 3; proposed clauses 5–14.)
Requires ULPAs to list the employees and the wage periods covered, include an auditor’s report supporting the base unpaid levy amount (the “subclause 10(8) amount”), and allow specified long‑service‑leave cessation payments made to employees to reduce the employer’s ULPA liability (offset rules in proposed clauses 10, 25–26).
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Deep Dive
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What this bill would change
The Coal Mining Industry (Long Service Leave) Legislation Amendment Bill 2025 amends the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992 and the Coal Mining Industry (Long Service Leave) Administration Act 1992. Schedule 1 Part 1 updates the method for calculating additional levy on late payments under the Collection Act and removes an unnecessary definition. Schedule 1 Part 2 inserts proposed Schedule 1 into the Collection Act to create the unpaid levy payment arrangement framework and amends the Administration Act to permit assumptions about long service leave entitlements where records are incomplete. Proposed Schedule 1 Part 1 provides a simplified outline and definitions while excluding unpaid levy subject to court orders. Proposed Schedule 1 Part 2 sets out notice requirements under subclause 5(1), draft arrangement submission under clause 6, Corporation review under clause 8, final unpaid levy payment arrangement content under clause 10, Board approval criteria under subclause 14(6) and Administrative Review Tribunal review rights under clause 17. Proposed Schedule 1 Part 3 governs target days and amounts in subclause 22(1), compliance under clause 21, 20 per cent waiver under clause 27 and disapplication of recovery and penalty provisions under subclause 19(2). The Minister may determine assumptions by legislative instrument under proposed subsection 39G(3) of the Administration Act. Commencement occurs the day after Royal Assent for Part 1 and the first day of the second calendar month after Royal Assent for Part 2.
Main concepts
Official source available
Zoe has indexed the source text for search and analysis. Use the official register for the original document and download formats.
Amends the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992 and Coal Mining Industry (Long Service Leave) Administration Act 1992 to: establish a mechanism for employers with historical unpaid levy liabilities to enter into voluntary payment arrangements with the Coal Mining Industry (Long Service Leave Funding) Corporation; and replace the defunct method for calculating the additional levy that is payable on late levy payments.
Parliamentary progress
Progress
House of Representatives
Introduced and read a first time
26 Nov 2025
Second reading moved
26 Nov 2025
Second reading debate
10 Mar 2026
Notes
Documents and transcripts
Text of bill
First reading
Explanatory memoranda
Explanatory memorandum
Transcript of speeches
All second reading speeches
Minister's second reading speech
Proposed amendments
No proposed amendments have been circulated.
Schedules of amendments
No documents at present
Bills digest
Bills Digest
Notes
Referred to Committee (05/02/2026): Senate Education and Employment Legislation Committee; Committee report (23/03/2026)
Coal Mining Industry (Long Service Leave) Legislation Amendment Bill 2025 | Zoe
Provides that an employer who complies with an approved ULPA and meets the payment timetable receives a 20% waiver (remission) of the remaining covered levy liability; while compliant under the ULPA, the employer is protected from court recovery actions and from accrual of additional penalty levy for the covered amounts. (Proposed clauses 19, 21, 27.)
Prescribes the instalment schedule (six target days/target amounts) and permits limited postponement of target days subject to review; failure to meet a target day typically means the employer is treated as never having been compliant and loses the remission and protections. (Proposed clauses 22–24, 28.)
Gives review rights to the Administrative Review Tribunal for particular decisions of the Corporation (e.g. refusal to approve an ULPA or to extend certain time limits). (Proposed clauses 17, 24.)
Who is affected
Employers in the black coal mining industry who may have unpaid levies because, historically, they treated some workers as outside the portable LSL scheme but later decisions (court rulings or administrative reviews) found those workers covered. These employers are the primary payers under the ULPA framework.
Current and former employees who are (or may be) covered by the portable LSL scheme: the Bill preserves their entitlement to receive full LSL payments from the Fund, even where an employer obtains remission of part of its debt under an ULPA (the Fund absorbs shortfalls so employees’ entitlements are paid in full).
The Coal Mining Industry (Long Service Leave Funding) Corporation and its Board: they gain new decision‑making, information‑gathering and approval powers and new duties to create forms, review arrangements and manage assumptions.
Auditors and advisers who prepare the required audit reports and calculations for employers seeking ULPAs.
Why it matters (official purpose, then how that interacts with costs and incentives)
Officially, the Bill is designed to resolve "legacy" disputes and large historic liabilities that arose after court decisions clarified who was covered by the scheme. The stated aims are to encourage employer participation in resolving unpaid liabilities, enable sustainable repayment over time, and protect the Fund so employees still get paid.
How that operates in practice and the trade‑offs you should note:
Who pays: employers with historic unpaid levies are asked to make instalment payments; if they comply they get a 20% waiver of the covered liability (proposed clause 27). The Fund will effectively absorb that 20% remission to ensure employees still receive full entitlements. (Proposed clause 27 and EM discussion.)
Who decides: the Corporation’s staff review drafts; the Corporation’s Board makes the formal decision to approve or refuse an ULPA (proposed clauses 8, 13–14). The Minister can set assumption rules by legislative instrument (Administration Act, proposed subsection 39G(3)). The Administrative Review Tribunal can review certain Board decisions (proposed clause 17). These are administrative rather than judicial choices in the first instance.
Incentives and compliance: the 20% waiver and protection from additional penalty levy and recovery actions (while compliant) create a clear incentive for eligible employers to opt into the ULPA process rather than litigate or wait. The flip side is a concentrated benefit for employers who opt in and a diffuse cost to the Fund (and thus to future levy contributors or returns on investment) of the 20% waiver. (Proposed clauses 19, 21, 27.)
Information and audit burden: employers must identify covered employees and periods, provide an auditor’s report attesting to the computed base liability, and supply payroll and cessation payment details. Where records are incomplete, the Bill allows specific, ministerially‑guided assumptions to be used, but those assumptions may change employer exposure depending on how generous or conservative they are. (Proposed clauses 10–12, 11; Administration Act proposed s39G.)
Legal protections and limits: while complying employers avoid additional penalties and recovery actions for amounts covered by an approved ULPA, the Board can refuse an ULPA if there is insufficient information to calculate employee entitlements (proposed paragraph 14(6)(c)). That tension means some employers with very poor records may be unable to access the remission pathway.
Risk of substitution and moral hazard: the availability of a remission and the Fund covering shortfalls could reduce the private cost of non‑payment in earlier years. The Bill attempts to counter that through requirements (audits, named employees/periods, and Board approval criteria) and by limiting remission to 20% conditioned on compliance. (Proposed clauses 10–14, 27.)
Administrative discretion and parliamentary oversight: the Minister can make rules about assumptions by legislative instrument (subject to parliamentary scrutiny mechanisms), and the Corporation has discretion in form approval and enquiry powers. That concentrates implementation detail in regulatory instruments and administrative practice rather than the Act’s core text. (Administration Act proposed s39G; proposed clause 16.)
Practical effects on behaviour
Employers with uncertain historic exposure are incentivised to engage with the Corporation, produce the required documentation, and accept a binding instalment timetable in exchange for a 20% remission and protection from penalties and recovery for covered debts.
Employers with genuinely insufficient records may face a choice: attempt to produce an ULPA relying on the statutory assumptions (if permitted) or risk having full recovery and penalty liability enforced if the Board refuses approval.
The Corporation and Board will spend additional resources assessing draft and final ULPAs, setting forms and assumption guidance, and supervising compliance.
Implementation risks and costs to watch
Fiscal impact on the Fund: a 20% waiver for participating employers means the Fund must meet employees’ entitlements while accepting a reduction in recoverable receipts (proposed clause 27). That is a present cost to the Fund and may affect future levy settings or investment decisions if widespread.
Administrative burden and timing: multi‑stage approvals, information requests, auditor reports and potential Tribunal reviews mean the system could be time‑consuming and resource‑intensive for both employers and the Corporation (proposed clauses 6–14, 17).
Uncertainty from assumptions: where records are incomplete the Minister’s instrument and the Corporation’s application of reasonable assumptions will materially affect liability calculations; that introduces implementation risk and potential disputes about fairness or correctness (proposed clause 11; Administration Act proposed s39G).
Possible unequal effects across employers: employers who have kept good records and those who can demonstrate cessation payments will be advantaged relative to those with poor records; the Board’s discretion to refuse approval where entitlements cannot be calculated may leave some employers without access to the ULPA pathway (proposed paragraph 14(6)(c)).
Bottom line (mechanics then rationale)
Mechanically, the Bill creates a regulated, time‑limited pathway for employers with historic unpaid coal‑industry LSL levies to enter instalment agreements, subject to audit, assumptions rules, Board approval, and a 20% waiver if the employer complies with the arrangement. It also replaces the existing late‑payment penalty calculation method.
The government’s stated purpose is to resolve legacy disputes and preserve employees’ entitlements while enabling sustainable repayments by employers. That design shifts some historic collection risk away from aggressive recovery and into negotiated remediation, but it does this by reallocating a portion (20%) of recoverable amounts onto the Fund and by concentrating administrative discretion in the Corporation and the Minister’s instrument powers (proposed clauses cited above).
The portable long service leave scheme entitles black coal mining industry employees to leave based on industry service rather than any single employer, funded by employer levies paid into the Coal Mining Industry (Long Service Leave) Fund managed by the Corporation. Eligible employee status turns on employment in the black coal mining industry as defined by reference to the Black Coal Mining Industry Award 2020 following the 2009 amendments. Unpaid levy payment arrangements allow employers or former employers to settle historical liabilities through instalments over six years with a 20 per cent waiver upon full compliance. Assumptions under proposed clause 11 of Schedule 1 to the Collection Act and proposed section 39G of the Administration Act address gaps in employee records by fixing the meaning of eligible wages and permitting reasonable estimates of incentive payments. Relevant long service leave cessation payments offset liabilities where employers have already paid out untaken leave under state laws, industrial instruments or the National Employment Standards. The additional levy calculation replaces the previous formula that had become inoperable. Compliance with an approved arrangement prevents accrual of further penalties and bars recovery proceedings for covered amounts. The framework responds to Federal Court decisions in Hitachi Construction Machinery (Australia) Pty Ltd v Coal Mining Industry (Long Service Leave Funding) Corporation and Orica Australia Pty Ltd v Coal Mining Industry (Long Service Leave Funding) Corporation that clarified coverage for peripheral roles such as maintenance and electrical workers.
Who it affects
Employers and former employers in the black coal mining industry who have unpaid levy liabilities arising from employees later confirmed as eligible under the scheme, including those affected by the Hitachi and Orica decisions, face the option to enter arrangements or remain subject to existing recovery powers. Current and former employees whose long service leave entitlements depend on levy collection receive guaranteed full entitlements because the Fund covers any shortfall from the 20 per cent waiver. The Coal Mining Industry (Long Service Leave Funding) Corporation gains new information-gathering powers, review functions and approval responsibilities for arrangements. The Minister for Employment and Workplace Relations obtains power to extend timeframes and determine assumptions by legislative instrument. Small business employers benefit from a longer first target day of six months after Board approval rather than 30 days. Auditors engaged to verify subclause 10(8) amounts must prepare reports meeting prescribed standards. The Administrative Review Tribunal receives jurisdiction over refusal decisions and postponement refusals. Industry bodies such as the Australian Industry Group and the Mining and Energy Union have interests in the practical operation for their members. The scheme as a whole is affected through preservation of financial viability while resolving legacy coverage disputes.
What people will want to know
Employers want to know the exact steps and deadlines for giving notice of intention within two months of the unpaid levy calculation day, submitting a draft arrangement within six months and providing the final arrangement within five months of draft review. They need clarity on whether incomplete historical records can be supplemented by assumptions about eligible wages and incentive payments without risking refusal. Employees and their representatives seek confirmation that full long service leave entitlements will still be paid from the Fund even after the 20 per cent waiver. Parties ask how relevant long service leave cessation payments already made to former employees reduce the net liability under an arrangement. Small business employers want to understand the extended first payment deadline and whether they qualify under the Fair Work Act definition. All participants need to know the consequences of missing a target day, which deems the arrangement never compliant and restores full liability plus potential penalties. Privacy obligations arise because arrangements must include employee names, employment periods and remuneration details handled under the Privacy Act 1988. The status of the pending High Court appeal in Orica remains relevant because any change in coverage could affect which historical liabilities fall within the framework.
Status and what happens next
The bill was introduced and read a first time in the House of Representatives on 26 November 2025 with the second reading moved the same day. Second reading debate occurred on 10 March 2026. The Senate Education and Employment Legislation Committee received the referral on 5 February 2026 and reported on 23 March 2026. No proposed amendments have been circulated. The bill awaits resumption of the second reading and subsequent stages in the House before transmission to the Senate. If passed by both Houses it will receive Royal Assent and commence according to the two-part schedule. The Corporation will then publish approved forms and the Minister may issue legislative instruments setting assumptions and extending notice periods. Employers holding historical liabilities can begin preparing notices once the unpaid levy calculation day is known. The Parliamentary Library Bills Digest notes that at the time of writing the bill had not been referred to or reported on by committees, but subsequent records show the committee process completed. Further progress depends on the legislative timetable after the committee report.
Powers, duties and rights created
The Board of the Corporation must decide to approve or refuse an unpaid levy payment arrangement within 30 days of receipt or receipt of further information and must give written notice with reasons for refusal under subclause 14(4) and paragraph 14(5)(a). The Corporation may gather information during review of draft arrangements and request further information under clause 13 with a 30-day compliance period. The Minister holds power to determine longer periods for notices and submissions by legislative instrument and to prescribe mandatory or permissible assumptions under proposed subsection 39G(3). Persons submitting arrangements have the right to apply to the Administrative Review Tribunal for review of refusal decisions and unfavourable postponement decisions under clauses 17 and 24. Employers gain the right to a 20 per cent waiver and protection from recovery and additional levy once compliant. Employees hold the right to full long service leave entitlements calculated under Part 5A of the Administration Act even where assumptions are used. The Corporation must cover any shortfall in the Fund arising from waivers. Auditors have duties to opine on the accuracy of subclause 10(8) amounts in reports meeting clause 12 requirements. Persons entering arrangements must specify covered employees and periods individually and provide audit reports and cessation payment details where applicable.
Money, penalties and enforcement
Employers who comply with an approved unpaid levy payment arrangement receive a 20 per cent remission of the outstanding levy liability under clause 27, with the Fund absorbing the cost to ensure employees receive full entitlements. The arrangement requires payment of six target amounts on target days spread over up to six years, with the first target day set at 30 days after approval or six months for small business employers. Relevant long service leave cessation payments already made offset the subclause 10(8) amount on an employee-by-employee basis, capped so they cannot exceed the calculated levy liability. While compliant, the usual provisions for extension of time, instalment payments, accrual of additional penalty levy under section 7 of the Collection Act and recovery proceedings are disapplied by subclause 19(2). Failure to pay a target amount by the end of the target day deems the person never to have been compliant, restoring full liability and exposing the employer to penalties and court action. The new calculation of additional levy replaces the previous method that had become inoperable. No recovery proceedings or additional levy apply to covered liabilities during compliance. The framework therefore trades immediate full collection for structured repayment and a partial waiver to encourage participation and protect scheme viability.
Pressure points and controversies
A central policy trade-off lies between providing employers relief through a 20 per cent waiver and six-year repayment to resolve legacy liabilities and preserving the full funding base of the scheme for current and future employee entitlements. The use of assumptions where records are incomplete creates tension between practical administration and accuracy of levy calculations, particularly given the seven-year employee record retention requirement under the Fair Work Act. The pending High Court appeal in Orica introduces uncertainty over the precise scope of eligible employees, which may affect which historical liabilities can be brought into arrangements. Privacy considerations arise from the mandatory inclusion of individual employee data in arrangements, although the Explanatory Memorandum states that collection and disclosure will comply with the Privacy Act 1988. The exclusion of liabilities already subject to court orders prevents overlap with existing enforcement but may leave some employers outside the framework. The requirement for Board satisfaction that sufficient information exists to calculate entitlements under Part 5A before approval balances employee protection against the risk of refusal where records are poor. Implementation will depend on the quality of guidance and approved forms issued by the Corporation after commencement. The bill implements several recommendations from the 2021 KPMG independent review, including those on legacy issues and settlement mechanisms, while leaving others such as definitional changes unaddressed.
What changes if it passes
Employers with historical unpaid levies gain a structured, voluntary pathway to settle obligations over six years with a 20 per cent discount and protection from penalties and recovery during compliance, replacing the previous position where significant additional levy could accrue without a clear settlement mechanism. Employees receive assurance that their full long service leave entitlements will be paid from the Fund regardless of any waiver granted to employers. The Corporation obtains clearer procedures and powers to manage legacy liabilities while maintaining scheme solvency through Fund top-ups. The method for calculating additional levy on future late payments is updated to a workable formula. Assumptions about wages and incentive payments become available to simplify calculations where records are missing, reducing disputes over historical coverage. The Administrative Review Tribunal gains specific jurisdiction over key Corporation and Board decisions, providing an avenue for external scrutiny. Overall scheme administration shifts from reliance on enforcement to a compliance-oriented framework that encourages participation while protecting employee rights. If the High Court alters coverage in the Orica appeal, the practical reach of the new arrangements may require further adjustment, although the bill itself does not depend on that outcome.
Social post angles
Coal employers facing back levies can now access a six-year repayment plan with a 20 per cent discount if they meet compliance milestones, offering a practical alternative to lump-sum demands. The bill guarantees that coal mining workers will still receive their full long service leave entitlements even when employers settle historical debts at a reduced rate through the industry fund. Portable long service leave in the black coal sector gains a new mechanism to resolve coverage disputes arising from Federal Court decisions on maintenance and electrical roles. Small business coal employers receive an extended first payment deadline of six months under the new unpaid levy arrangements, recognising cash-flow realities. Assumptions about missing employee records will help calculate historical liabilities without requiring perfect documentation from decades past. The legislation responds to recommendations from the 2021 KPMG review by creating settlement pathways that protect both employer viability and worker entitlements. Compliance with an approved arrangement halts penalty levy accrual and recovery action, providing certainty for employers who follow the six-target-day schedule. Industry and union stakeholders have welcomed the framework as a collaborative solution to legacy eligibility issues in the coal mining long service leave scheme.
The Commonwealth’s portable long service leave scheme (Scheme) provides black coal mining industry employees with long service leave entitlements, based on an employee’s service in the industry rather than service with a particular employer. The Scheme is funded by employer-paid levies. Employers failing to pay levies for employees eligible for the Scheme are liable to pay additional levy as a penalty.
Previous legislative amendments introduced uncertainty regarding the Scheme’s application to classes of employees. Two recent Federal Court cases clarify the Scheme’s application to certain employees previously thought to be out of scope by some employers, resulting in some employers accruing significant liabilities.
The Coal Mining Industry (Long Service Leave) Legislation Amendment Bill 2025 (the Bill) would amend the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992 and the Coal Mining Industry (Long Service Leave) Administration Act 1992 to establish a framework for employers to meet their unpaid levy liabilities over a 6 year period. This unpaid liability framework is intended to incentivise employer participation, allow the repayment of unpaid liabilities by employers in a financially sustainable way, and protect the financial viability of the Scheme as a whole.
The Bill establishes procedures for drafting unpaid levy payment arrangements, their review and approval. The framework allows for making assumptions about liabilities where employee records are incomplete or not retained.
Covered employees are guaranteed their full entitlements. A 20 per cent waiver is applied to covered liabilities for employers who are compliant with approved unpaid levy payment arrangements. No recovery proceedings would be permitted, nor additional levy penalties applied, for covered liabilities of employers complying with unpaid levy payment arrangements.
At the time of writing, the Bill had not been referred to or reported on by any parliamentary committees.
Introductory Info
Date of introduction: 26 November 2025
House introduced in: House of Representatives
Portfolio: Employment and Workplace Relations
Commencement: Schedule 1, Part 1 would commence the day after Royal Assent. Schedule 1, Part 2 would commence the first day of the second calendar month to start after Royal Assent.
Purpose of the Bill
The purpose of the Coal Mining Industry (Long Service Leave) Legislation Amendment Bill 2025 (the Bill) is to amend:
the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992 (Collection Act) and
the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Administration Act)
to establish an unpaid levy payment arrangement (ULPA) framework.
The Bill responds to eligibility disputes over the coverage of certain employers in the black coal mining industry (BCMI).
Under the proposed ULPA framework, a person (i.e. an employer or former employer) holding levy liabilities relating to unpaid long service leave (LSL) entitlements for coal mining employees can opt to make repayments in instalments under an ULPA. ULPAs would require review and approval by the Board of Directors (Board) of the Coal Mining Industry (Long Service Leave Funding) Corporation (Corporation).
Where a person complies with an approved ULPA, that person would be eligible to receive a 20 per cent waiver of the outstanding levy liability. The Coal Mining Industry (Long Service Leave) Fund (Fund), the pooled investment fund managed by the Corporation, will cover shortfalls of levy payments so that employees receive full entitlements despite the remission, or waiver, of any liabilities.
Structure of the Bill
The Bill comprises 1 Schedule divided into 2 parts.
Part 1 of the Bill would amend the Collection Act to update the calculation of additional levy that is payable in respect of unpaid levy amounts, and to remove an unnecessary definition.
Part 2 of the Bill would amend the Administration Act to enable the making of certain assumptions about employees covered by an ULPA, where there is insufficient information to work out the entitlement, if any, of the employee to LSL. These amendments would mean:
the Minister could determine, by legislative instrument, assumptions that must or may be made by the Corporation regarding LSL entitlements under ULPAs
the Corporation could make any other reasonable assumptions about the matters about which there is insufficient information.
Part 2 of the Bill would also amend the Collection Act to insert proposed Schedule 1 to that Act, which would establish the legal basis and procedures for, and effects of, making ULPAs. Proposed Schedule 1 to the Collection Act would comprise 3 parts:
Proposed Schedule 1 Part 1 provides a simplified outline of the schedule, relevant definitions, and places unpaid levy subject to court orders outside the ULPA framework.
Proposed Schedule 1 Part 2 establishes the framework for creating ULPAs and related matters, including:
notice and submission requirements
procedures for preparing, reviewing and approving draft payment arrangements
the Corporation’s information-gathering powers
permitted assumptions that can be made by a person giving an ULPA to the Corporation
approval and refusal criteria, correction of minor errors, and approved form requirements and
providing for the reviewability of Corporation decisions by the Administrative Review Tribunal.
Proposed Schedule 1 Part 3 would provide for the implementation of approved ULPAs including provisions for:
determining the amounts and target days on which ULPA instalment payments are to be made, as well as when target days can be postponed
circumstances in which a person complies or does not comply with an ULPA
waiving 20 per cent of outstanding levy liability for a person who complies with an ULPA
the effect of failure of compliance with an ULPA.
Background
Functioning of the portable long service leave scheme
The Bill’s Explanatory Memorandum (EM) provides a brief explanation of the Commonwealth’s portable long service leave scheme (Scheme) for the BCMI. The Scheme entitles eligible employees to LSL entitlements on the basis of time served in the BCMI, rather than with any particular employer (EM, p. 1).
LSL entitlements are paid from the Fund, which is funded by a levy on eligible wages payable by employers of eligible employees (EM, p. 1).
As explained on the Corporation’s website, the Corporation manages the Fund, and collects payroll levies from employers as a ‘mandatory employer tax’ which does not come out of employee wages.
The Scheme is the source of LSL entitlements for employees in the BCMI. The Scheme applies to exclude certain other LSL entitlements, such as those that might otherwise apply under the National Employment Standards (NES) or State or Territory laws (Administration Act, sections 39E and 39EA). Under the Fair Work Act 2009 (FW Act), the Black Coal Mining Industry Award 2020 - MA000001 (BCMI Award) cannot include LSL terms (section 155). However, enterprise agreements can include terms relating to LSL. Section 39EB of the Administration Act provides that it is not intended to override entitlements or rights in respect of LSL under an industrial instrument that covers the employee.
As well as the 2 Acts that would be amended by the Bill and broader workplace legislation, such as the FW Act, the Scheme is regulated under the:
Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992 (Levy Act)
Coal Mining Industry (Long Service Leave) Payroll Levy Regulations 2018
Employer Reimbursement Rules 2017
Disputes regarding eligibility of workers for the scheme
There have been disputes over the coverage of the Scheme with respect to who is an eligible employee. The Coal Mining Industry (Long Service Leave Funding) Amendment Act 2009 (2009 Amending Act) amended the definition of ‘eligible employee’ in the enabling legislation for the Scheme (EM, p. 1). Eligible employees must be employed in the BCMI, and BCMI is defined by reference to the BCMI Award.
Subsequently, eligibility disputes arose regarding the coverage of employees, typically regarding employees on the ‘periphery’ of the BCMI, such as machine maintenance workers and electrical workers (EM, p. 1).
Section 7 of the Collection Act provides for the accrual of additional levy, which accrues on a day when levy is payable but remains unpaid. The additional levy operates as a penalty and is calculated according to subsection 7(2).
Significant amounts of additional levy can accrue where employers have failed to pay levies in respect of employees who have later been found to be covered under the Scheme (EM, p. 1).
The EM cites 2 recent decisions of the Full Bench of the Federal Court as having clarified the eligibility of employees under the Scheme (EM, p. 1). These cases are:
Hitachi Construction Machinery (Australia) Pty Ltd v Coal Mining Industry (Long Service Leave Funding) Corporation [2024] FCAFC 166 (Hitachi)
Orica Australia Pty Ltd v Coal Mining Industry (Long Service Leave Funding) Corporation [2025] FCAFC 65 (Orica).
Orica is, at the time of writing, the subject of an appeal before the High Court of Australia.
These cases concerned whether certain classes of employees were eligible employees covered by the Scheme. Outcomes in these cases turned on the definition of the BCMI as introduced by the 2009 Amending Act. In both Hitachi and Orica, it was held that employees had been part of the BCMI and were covered by the Scheme. Employers had previously treated these employees as falling outside of the Scheme and did not pay levy for them.
In a media release on the Bill, Minister for Employment and Workplace Relations, Amanda Rishworth, stated
The Government has worked closely with industry, unions and stakeholders to design a practical response to complex legacy issues. This legislation reflects that collaboration and our commitment to fairness for both employees and employers.
The independent review of the scheme
On 1 June 2021 the Morrison Government announced an independent review of the Scheme by KPMG. In December 2021, KPMG published the report titled Enhancing certainty and fairness: Independent Review of the Coal Mining Industry (Long Service Leave Funding) Scheme (Independent Report). It identified that the 2009 Amending Act contributed to issues which remained unresolved at the time of the report, forming the basis of many concerns raised in the Independent Report (p. 26).
The Independent Report contains 20 recommendations. Provisions in the Bill appear to implement or respond to several of these recommendations, including:
Recommendation 2, regarding developing legislative amendments to address legacy issues with past application of coverage provisions
Recommendation 6, to provide for settling employer liabilities in certain circumstances, to promote compliance with the scheme without affecting the ability of employees to receive accrued entitlements
Recommendation 7, to consider the merits of a limitation period for the assessment and collection of levy liabilities to promote timely administration of the scheme.
Recommendation 4, to enact legislative amendments to ensure casual employees are treated no less favourably than other employees, was addressed by Schedule 6 to the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023, as identified in the EM to the bill introducing that Act (p. 28).
However, other recommendations in the Independent Report are not addressed by the Bill. Notably, this includes Recommendation 1, regarding definitions in the Administration Act.
Policy position of non-government parties/independents
At the time of writing, no comments on the Bill by non-government parties or independents could be identified.
Stakeholder comments
Industry bodies have made comments supportive of the proposals in the Bill:
Australian Industry Group has stated that ‘the introduction of the Bill into Parliament is very welcome’, referencing its involvement in the Government’s consultation process
The Mining and Energy Union welcomed the legislation, stating that the Bill would ensure that workers would receive entitlements that they are owed, and close loopholes that have wrongly excluded some workers from the Scheme. The Union stated that the Bill would create a practical pathway for employers to settle outstanding LSL liabilities.
Key issues and provisions
Review and approval processes for unpaid levy payment arrangements
The EM describes 5 stages for the approval of ULPAs as being:
Stage 1: Opting-in
Stage 2: Submitting a draft payment arrangement for review by the Corporation
Stage 3: Review by the Corporation
Stage 4: Preparing and submitting a ‘final’ payment arrangement
Stage 5: Board consideration of payment arrangement
References in this section to proposed provisions are references to the proposed Schedule 1 to the Collection Act unless otherwise stated.
Stage 1: Opting in
If a person (an employer) wants to enter into an ULPA, they must give the Corporation written notice of their intention (proposed subclause 5(1)).
Notice to enter into an ULPA must be given before the end of two 2 months after the unpaid levy calculation day (defined under proposed clause 3 as the commencement day for proposed Schedule 1, or a later day determined by the Minister), or a day determined by the Minister that is more than 2 months after the unpaid levy calculation day (proposed subclause 5(2)).
The Minister can determine such a day for the notice period even if the two-month period mentioned in paragraph 5(2)(b) has elapsed (proposed subclause 5(4)).
Stage 2: Submitting a draft payment arrangement for review by the Corporation
Where a person gives such notice, the person may give a draft payment arrangement to the Corporation for review (proposed subclause 6(2) and clause 8), in a form approved by the Corporation (proposed clause 7 and subclause 16(1)).
Giving a draft payment arrangement is a precondition for a person to give an ULPA to the Corporation for approval (proposed subclause 9(1)). A draft payment arrangement must be given to the Corporation within 6 months of the notice of intention being given (proposed subparagraph 6(3)(a)(ii)) or a longer period determined by the Minister by legislative instrument (proposed subclause 6(4)).
The Corporation may approve an extension of no more than 3 months for giving a draft payment arrangement (proposed paragraph 6(3)(b) and subclause 6(5)).
Stage 3: Review by the Corporation
An employee or consultant of the Corporation must review a draft payment arrangement and consult with the person who submitted it within 2 months (proposed subclause 8(2)).
The EM explains that it is anticipated some employers will be able to submit complete or well-developed arrangements at this stage, whereas others, especially with incomplete records or debts further back in time, may need to seek advice from the Corporation about what records will suffice to support their proposed arrangement (p. 14, paragraphs 46-47).
Without limiting proposed paragraph 8(2)(b), the employee or consultant may offer the person advice or suggestions about compliance, assumptions that may or must be made, and revisions or inclusions to be made (proposed subclause 8(3)). Any such advice or suggestions will not prejudice Board decisions on approval or refusal of ULPAs (proposed subclause 8(4)).
Stage 4: Preparing and submitting a ‘final’ payment arrangement
Where a person has given a draft payment arrangement to the Corporation in accordance with proposed clauses 6 and 7, the person may give an ULPA to the Corporation.
The ULPA must individually specify employees of the person (proposed subclause 9(4) and paragraph 9(3)(a)), and for each of those employees, one or more periods (proposed paragraph 9(3)(b)). These are the employees and periods covered by the ULPA.
The ULPA must be given to the Corporation within 5 months of giving the draft payment arrangement (proposed subparagraph 9(5)(a)(ii)) or a longer period determined by the Minister by legislative instrument (proposed subclause 9(6)).
The Corporation may approve an extension of no more than 6 months for giving an ULPA (proposed paragraph 9(5)(b) and subclause 9(7)).
Proposed clause 10 sets out the form and content requirements for ULPAs. ULPAs must be in a form approved by the Corporation under proposed clause16.
The EM explains that various clauses, including clause 16, would engage the right to privacy (p. 23, paragraph 100). The collection and disclosure of personal information is stated to be necessary where the ULPAs deal with personal information of employees, such as names, employment periods and remuneration (EM, p. 23, paragraph 101). The EM states that any personal information collected under the amendments in the Bill would be handled in accordance with the Corporation’s obligations under the Privacy Act 1988 (p. 23, paragraph 100), and that any disclosure of information to the Corporation or auditors would be reasonable, necessary and proportionate for the purpose of preparing and approving arrangements (p. 23, paragraph 102.)
Working out liabilities and offsetting them by long service leave cessation payments
The content of an ULPA must specify the ‘subclause 10(8) amount’ in respect of wages. This is equal to the original amount of unpaid levy in respect of the wages, if the original amount were worked out in accordance with the assumptions mentioned or made under proposed clause 11 (these assumptions are covered below). In addition, an ULPA must include:
an audit report in accordance with the requirements in proposed clause 12, namely that the report is prepared by an auditor, stating that the auditor opines that the subclause 10(8) amount is correct, and includes the reasons for so opining and
information about covered wages and employees as required by the form.
Importantly, the base amount of liability, relevant for working out a person’s liability under an ULPA, is determined by reference to
the subclause 10(8) amount but
this is offset by any relevant long service leave cessation payment (RLSLCP) amounts (proposed paragraph 10(3)(a), clause 25 and subclause 26(2)).
Proposed clause 2 would define ‘long service leave cessation payment’ (LSL cessation payment) in relation to a person, to mean:
a payment made by an employer that was:
made to the person, or to the person’s legal personal representative, when (or after) the person ceased to be an employee of the employer; and
in lieu of untaken long service leave; and
made in pursuance (or purported pursuance) of:
a law of a State or Territory; or
an industrial instrument; or
the National Employment Standards (within the 9 meaning of the Fair Work Act 2009).
Cessation payments generally are provided for under part 5A division 3 of the Administration Act. LSL cessation payments effectively provide for the payout of long service leave entitlements where an employee’s employment ceases. In turn, RLSLCPs have the effect of reducing the subclause 10(8) amount by the RLSLCP amount (proposed subclause 26(2)), reducing the levy liabilities of a person under the ULPA, reflecting the fact that the employer will have already paid the employee an LSL cessation payment.
An RLSLCP is defined under proposed subclause 10(5), as an LSL cessation payment made:
at or after the time at which unpaid levy, in respect of any of the wages covered by the agreement that the person paid to the employee, first become payable (proposed paragraph 10(5)(a)) and
before the time the person gives the ULPA to the Corporation (proposed paragraph 10(5)(b)).
The EM states thatproposed subclause 10(5) works to provide a ‘clear nexus between the long service leave cessation payment and the wages proposed to be covered by an arrangement’ (EM, p. 19, paragraph 73).
A person cannot use RLSLCPs to offset an amount greater than the subclause 10(8) amount (EM, p. 33, paragraph 146). If the RLSLCP is greater than the subclause 10(8) amount, the RLSLCP exactly offsets the subclause 10(8) amount (proposed subclauses 26(3) and (4)).
If a long service leave cessation payment has been made, the ULPA may specify the payment, including details related to the payment (proposed subclause 10(4)). Where an ULPA so specifies at least one cessation payment, the arrangement must specify the total amount of these payments (proposed paragraph 10(6)(b)) and provide details for each employee to whom any of the payments relate (proposed paragraph 10(6)(a)).
The EM explains that this information is necessary because the capping of the offset from RLSLCPs under proposed clause 26 operates with respect to a person’s unpaid levy for each relevant employee (EM, p. 19, paragraph 75).
Stage 5: Board consideration of payment arrangement
Proposed clause 14
deals with the Board’s decision on an ULPA. The Board must decide to either approve or refuse to approve the ULPA (proposed subclause 14(2)) and give written notice of its decision (proposed subclause 14(4)) with a statement of reasons if the ULPA is not approved (proposed paragraph 14(5)(a)).
Proposed clause 13 allows the Board to request further information by written notice to the person, who must comply within 30 days or a longer period approved by the Corporation.The Board’s decision must be made within 30 days of the ULPA being given to the Corporation or, if the Board requests further information under proposed clause 13, within 30 days from the day that the person is required to supply that information (proposed subclause 14(3)).
The Board must approve the ULPA underproposed subclause 14(6) unless the Board is satisfied on reasonable grounds that:
any of the requirements under proposed clauses 9-12 are not met
the Board has requested further information under proposed clause 13, and the person has failed to comply with the notice of the request or
for any employee covered by the ULPA, were the ULPA to be approved, the Corporation would have insufficient information to work out LSL entitlements under Part 5A of the Administration Act relating to a relevant employment period of the employee (this ground of approval is examined below regarding the making of assumptions).
Review by the Administrative Review Tribunal
Proposed clause 17 would allow a person to apply to the Administrative Review Tribunal for review of a decision of the Board to refuse:
to approve a longer period to
give a draft payment arrangement under proposed paragraph 6(3)(b)
give an ULPA under proposed paragraph 9(5)(b) or
comply with a notice requesting further information under proposed paragraph 13(2)(b)
to approve an ULPA under proposed paragraph 14(2)(b).
Proposed clause 24 would also allow a person to apply to the Administrative Review Tribunal for review of a decision to refuse to postpone a target day under the ULPA, or to postpone it to a day that is earlier than the day applied for. Target days are covered below.
Assumptions for making unpaid levy payment arrangements
The Bill would allow the making of certain assumptions in 2 scenarios:
before an ULPA is approved: where a person is specifying or including information in the ULPA that the person will give to the Corporation (Collection Act, proposed clause 11)
after an ULPA is approved: where the Board approves an ULPA and, because of a lack of sufficient information about the employment of a covered employee, the entitlement (if any) of the employee to LSL under part 5A of the Administration Act cannot be worked out (Administration Act, proposed section 39G at item 3).
Assumptions before an unpaid levy arrangement is approved
A person must make certain assumptions when specifying or including information in an ULPA to be given to the Corporation and may make certain other reasonable assumptions.
Proposed clause 11 requires a person to make two assumptions. The first is that ‘eligible wages’ in the Collection Act, had, at all times, the meaning it had on the commencement day of Part 2 of Schedule 1 to the Bill (proposed paragraph 11(a)). This is intended to ‘avoid the need for employers to identify which definition applied at the time the wages were paid, simplifying calculations’ (EM, p. 20, paragraph 79).
The second assumption is that paragraph 3B(1)(b) of the Collection Act had never been enacted, and that subsection 3B(1) refers only to the base rate of pay paid to the employee including incentive-based payments and bonuses (proposed paragraph 11(b)). This is designed to ‘eliminate the need to complete two calculations. Usually, an employer is required to apply two similar formulas and adopt the amount which is greater’ (EM, p. 20, paragraph 80).
In addition to these mandatory assumptions, a person making an ULPA may make reasonable assumptions where they do not have sufficient information to work out whether an incentive-based payment or bonus was paid, or the amount of timing of such a payment or bonus (proposed paragraph 11(c)). Such reasonable assumptions must be based on information about incentive-based payments or bonuses paid or intended to be paid to a class of employees, of which the employee was a member.
Assumptions after an unpaid levy arrangement is approved
The Minister would be empowered to make legislative instruments determining the assumptions that may or must be made where LSL entitlements cannot be worked out for a relevant employment period (Administration Act, proposed subsection 39G(3)). Any rules made would be subject to Parliamentary scrutiny and sunsetting (EM, p. 11, paragraph 25).
The Corporation could also make any reasonable assumptions about the matters about which there is insufficient information (proposed paragraph 39G(2)(c)).
Proposed subclause 14(7) of Schedule 1 to the Collection Act defines relevant employment period to mean a period covered by an ULPA, and it would be defined for the Administration Act in the same way (proposed subsection 39G(4)).
Interaction with the power to refuse to approve arrangements
As mentioned above, the Board may refuse to approve an ULPA if the Board is satisfied on reasonable grounds that there will be insufficient information for working out certain LSL entitlements (proposed paragraph 14(6)(c)). The EM explains that this ground ‘is based on the principle that it is not appropriate to approve a payment arrangement where the corresponding employee long service leave entitlement cannot be calculated’ (p. 22, paragraph 92).
At the same time, the EM explains that making assumptions is necessary where there is insufficient information, given the historical nature of unpaid levies means no complete or detailed records may exist regarding employees’ qualifying service (p. 10, paragraphs 19-20). The insufficiency of information may be more likely where the FW Act only requires employee records to be kept for 7 years (EM, p. 10, paragraph 18). As a result, it is expected that ‘some employers will have limited historical records to support the preparation of a payment arrangement’ (EM, p. 20, paragraph 78).
Uncertain construction of coverage terms
Special leave to appeal from Orica was granted by the High Court of Australia on 6 November 2025. At the time of writing, the outcome of this appeal is unknown; it is possible that the outcome of the appeal may further alter the coverage of the Scheme. Until that appeal is decided, there is uncertainty as to the scope of eligible employees under the Scheme.
Compliance requirements once arrangement is approved
A person who enters into an ULPA must comply with the ULPA to be eligible for 20 per cent of their levy liabilities to be remitted. Additionally, so long as the person is compliant with the ULPA, proposed subclause 19(2) will disapply specific provisions from unpaid levy covered by the ULPA, namely those relating to:
the usual provisions under the Collection Act for extension of time and instalment payments
the accrual of additional penalty levy
the power to sue the person holding the liability to recover the amount of levy.
Proposed clause 21 provides for where a person complies with an ULPA; a person complies as soon as the target amount for the 6th target day under the ULPA has been paid (proposed subclause 21(2)). Proposed clause 28 provides for where a person fails to comply with an ULPA. A person is deemed never to have been compliant with the ULPA if they have not paid a target amount for a target day by the end of that target day (proposed subclause 21(3)).
The EM provides hypothetical examples of compliance and non-compliance (pp. 25-28).
Days and amounts of payments
The terms target day and target amount are defined by reference to a table contained in proposed subclause 22(1):
The first due day is defined under proposed subclause 22(2) as the day that is:
six months after the day the Board approves the ULPA, if the person is a small business employer under the FW Act on the day the Board approves the ULPA (proposed paragraph 22(2)(b)) or otherwise
30 days after the day the Board approves the ULPA.
A person complies with an ULPA where the amount for the6th target day under the ULPA has been paid (proposed subclause 21(2)).
Under proposed clause 23, a person may apply to postpone a target day for no later than 6 months after the original target day specified in the table, with no less than 2 months’ notice before the original target day.
Proposed clause 27 provides for the remission of unpaid levy when a person complies with an ULPA. The levy that is remitted is unpaid levy in respect of the wages covered by the arrangement that remains payable by the person at the time of compliance. This will be equivalent to 20% of the payment amount agreed under the ULPA.
Links
The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.
When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.
All hyperlinks in this Bills Digest are correct as of February 2026.
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