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

The Levy Act directly affects any person who pays eligible wages to an eligible employee in the coal mining industry after commencement. Because liability is cast on “the person who paid those wages” (s 6), the class of liable persons is not limited to entities that hold a mining lease or employ workers under a contract of service. Labour-hire companies, contractors, joint-venture operators and even head-office entities that second staff to mine sites may all fall within the net if they are the entity that actually disburses the wages.

Eligible employees are not defined in the Levy Act; the definition is imported from the Collection Act and the Administration Act. In broad terms they comprise production and engineering employees working in black-coal operations in New South Wales and Queensland who satisfy length-of-service and classification criteria. The levy therefore indirectly benefits those employees by funding the portable long service leave scheme administered by the Corporation. The employees themselves have no direct obligations under the Levy Act, but they are the intended economic beneficiaries.

The Corporation established under the Administration Act is the ultimate recipient of levy receipts. Although it is not a payer, its advice-giving role under s 8(2) gives it indirect influence over the rate. The Minister and the Governor-General are also affected in their regulatory capacities.

Because the coal mining industry has undergone substantial structural change since 1992—contractorisation, fly-in-fly-out rosters, corporate group restructures—the class of persons who “paid those wages” has widened. Modern compliance teams must therefore map every entity within a corporate group or supply chain that disburses remuneration to coal mining personnel.

The primary duty created by the Levy Act is the obligation to pay the levy at the prescribed rate on eligible wages (ss 4–6). Because the Collection Act is incorporated, that duty is enforceable as if it were a duty arising under the Collection Act. The payer must calculate the levy on the same base as is used for the definition of eligible wages, which typically includes ordinary time earnings, certain allowances and bonuses but excludes overtime, superannuation and termination payments (exact inclusions and exclusions sit in the Collection Act).

There is no statutory right of objection or review created by the Levy Act itself; again, those rights are supplied by the incorporated Collection Act. The payer’s practical rights are therefore limited to the procedural protections contained in the Collection Act (objections, reviews by the Administrative Appeals Tribunal, appeals to the Federal Court) and the common-law right to recover overpaid levy where the assessment is shown to be excessive.

The regulation-making power in s 8(1) is constrained by the mandatory consideration of advice from the Corporation (s 8(2)). This gives the industry, through the Corporation, a statutory right to be heard before the rate is altered. Failure to consider that advice would render the regulation vulnerable to judicial review for non-observance of a statutory precondition.

No express record-keeping duty appears in the Levy Act, but because the two Acts are to be read as one, the record-keeping and reporting obligations imposed by the Collection Act apply equally to the calculation and payment of the levy imposed by this Act.

The Levy Act contains no offence provisions, no administrative penalties and no express recovery mechanism. All enforcement tools are located in the incorporated Collection Act. Because s 3 requires the two Acts to be read as one, a failure to pay the levy imposed by s 4 is treated as a failure to pay a levy under the Collection Act, attracting whatever general interest charge, administrative penalties and recovery powers that Act confers.

The Collection Act (not reproduced here) supplies the standard suite of Commonwealth tax-recovery powers: garnishee notices, director penalty notices (in appropriate cases), security requirements and ultimately court action for debt. Because the levy is a tax, the Commonwealth’s constitutional power to impose it is supported by s 51(ii) of the Constitution, and the recovery provisions are supported by the taxation power and the incidental power.

The absence of penalties in the Levy Act itself is not an oversight; it is a deliberate legislative design used across the statute book to keep imposition Acts short and constitutionally robust. The practical risk for non-compliance is therefore the accrual of general interest charge at the statutory rate and potential administrative penalties for failure to remit by the due date fixed under the Collection Act.

Section 3 is the hinge provision. By declaring that the Collection Act “is incorporated, and is to be read as one, with this Act”, the Parliament has ensured that definitions, timing rules, assessment procedures and recovery mechanisms in the Collection Act apply directly to the levy imposed by s 4. Courts interpret such incorporation clauses strictly: the two statutes are treated as a single legislative instrument for the purpose of ascertaining meaning (see the interpretive approach mandated by s 3 itself).

Section 8(2) creates a further statutory link to the Administration Act. The Corporation established under that Act is the repository of industry knowledge and the body that advises the Minister on the appropriate levy rate. The Levy Act therefore forms part of a triumvirate:

• Levy Act – imposition;
• Collection Act – machinery and recovery;
• Administration Act – fund management, eligibility for long service leave payments and advice on levy rate.

The Levy Act also sits within the broader Commonwealth taxation framework. Although it is not administered by the Australian Taxation Office, its collection provisions mirror tax-collection language, and the general interest charge regime is aligned with that applicable to other Commonwealth levies. Interaction with the Fair Work Act 2009 is indirect: long service leave entitlements under the coal mining industry scheme displace or supplement State and Territory long service leave legislation for covered employees. The levy ensures that the portable industry scheme remains solvent.

Constitutionally, the levy is a tax. Its character as a tax is not altered by the fact that the proceeds are paid to a Corporation and ultimately used to fund employee entitlements. The link between the levy and the expenditure is sufficiently loose that the High Court would almost certainly characterise it as a tax rather than a fee for service (drawing on the principles in Air Caledonie International v Commonwealth (1988) 165 CLR 462, although that case is not reproduced in the source text).

The source text supplied is the compilation as at the date of this analysis and contains the original 1992 numbering and wording. No amendments are reproduced in the extract. The commencement mechanism in s 2 (Proclamation or 12-month sunset) was a standard transitional device used in early-1990s legislation to allow industry consultation on the detailed collection machinery. The Act in fact commenced on 1 February 1993.

Subsequent amendments to the rate have been effected by regulation rather than by amendment to the principal Act, consistent with the structure of s 5 and s 8. The mandatory advice requirement in s 8(2) has remained unaltered, reflecting a continuing policy that the levy rate should reflect actuarial advice from the body that manages the fund.

No textual change to the scope of the levy (the “eligible wages” base or the class of liable persons) appears in the provided extract. Any broadening of the base has occurred through amendments to the incorporated Collection Act or the Administration Act, which then flow through because of the “read as one” clause.

The source text contains no reference to any court challenge. Because the Levy Act is a pure imposition statute, any constitutional litigation has historically focused on whether the levy is a tax or a regulatory charge, whether the proceeds are directed to a purpose that could support the taxation power, and whether the incorporation technique complies with drafting conventions. No specific High Court or Federal Court authority is recited in the provided document, and none may be invented.

Industry controversy has centred on the rate of levy, the definition of eligible wages (particularly the inclusion or exclusion of certain rostered-day-off payments and production bonuses) and the administrative burden on contractors who must track coal-mining versus non-coal-mining hours for the same employees. These controversies are resolved through the regulatory advice process mandated by s 8(2) and through the objection and review mechanisms located in the Collection Act.

Because the levy is imposed on the person who paid the wages, disputes have arisen in labour-hire and secondment arrangements as to which entity within a corporate group or supply chain is the “person who paid”. The statute’s deliberate use of the payment test rather than the employment test was intended to minimise such disputes, but practical compliance difficulties remain.

Most practitioners assume that the levy is paid only by the mine operator named on the mining lease. The statute imposes the levy on the person who paid the wages, not the person who employs the worker or holds the lease. In contractor-heavy operations this can produce multiple levy payers for the same roster of employees.

The “read as one” direction in s 3 means that an amendment to a definition in the Collection Act automatically amends the operation of the Levy Act without any textual change to the latter. Compliance calendars must therefore track amendments to all three statutes in the package.

Section 8(2) is a mandatory relevant consideration. A regulation setting a new rate that is made without the Minister first receiving and considering the Corporation’s advice is liable to be set aside on judicial review. This is a rarely litigated but potent procedural safeguard.

Because the levy is imposed only on wages paid “after the commencement of this Act”, careful attention must be paid to the exact commencement date (1 February 1993) and to any back-payments or arrears that straddle that date. Modern redundancy or back-pay settlements can inadvertently trigger levy liability if they are characterised as eligible wages.

The absence of definitions in the Levy Act itself lulls some advisers into thinking the Act can be read in isolation. It cannot. Every substantive concept imports meaning from the Collection Act and the Administration Act. A compliance opinion that cites only the Levy Act is necessarily incomplete.

Finally, because the Corporation’s advice is not published, the rationale for rate changes is not always transparent. Compliance teams that wish to anticipate rate movements must maintain a dialogue with the Corporation rather than relying solely on the Federal Register of Legislation.

1. Map every entity within the corporate group or supply chain that disburses remuneration to personnel working in eligible coal mining operations. Each such entity is potentially a separate payer under s 6.

2. Obtain the current prescribed percentage from the most recent regulation made under s 8. Confirm that the regulation recites compliance with the advice requirement in s 8(2).

3. Identify the precise components of “eligible wages” by reference to the definitions in the incorporated Collection Act. Maintain a wages register that isolates eligible wages from excluded amounts (overtime, superannuation guarantee, termination payments, etc.).

4. Calculate the levy on a monthly or quarterly basis (the precise lodgment frequency is fixed by the Collection Act) and remit by the due date to avoid general interest charge.

5. Retain primary records that evidence the amount of eligible wages paid, the identity of the eligible employees, and the dates of payment. These records must satisfy the requirements of the Collection Act.

6. If wages are paid by a labour-hire entity or a related company, put in place contractual indemnity and information-sharing clauses so that the payer can obtain the necessary coal-mining hours data from the site operator.

7. Monitor amendments to the Collection Act and the Administration Act. Because the statutes must be read as one, changes to definitions or assessment rules in either of those Acts automatically affect the operation of the Levy Act.

8. Where a rate change is proposed, review the advice given by the Corporation (if made available) to understand the actuarial basis for the new percentage.

9. For corporate groups with both coal and non-coal operations, implement allocation methodologies that apportion shared head-office or corporate wages only to the extent that they relate to eligible employees.

10. Engage external payroll auditors annually to test the accuracy of the eligible-wages base, particularly where complex roster patterns, production bonuses or remote-area allowances are involved.

Compliance is not a set-and-forget exercise. The interplay between the three Acts, the rate set by regulation, and the changing structure of coal-mining labour supply requires continuous mapping of payment flows and vigilant monitoring of legislative and regulatory updates.