In an important judgment for contractors servicing the coal sector, a Full Federal Court has partially overturned an earlier decision and allowed an appeal by Orica relating to its long-running dispute with the Coal Mining Industry (Long Service Leave Funding) Corporation (Coal LSL) over the coverage of its explosives services employees within the scheme.

The joint judgement by Justices Collier and Snaden effectively excludes, from 2022, Orica’s shotfirers or blasting experts from eligibility for the portable long service leave (PLSL) scheme under the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth) (Administration Act).

While the decision is a win for specialist blasting contractors (noting a second major supplier, Dyno Nobel, intervened as an interested party) more broadly it does reinforce the wide coverage of the scheme and reaffirm the risks for other contractors servicing the black coal industry that their employees may be deemed eligible for payments.

Meanwhile, federal Workplace Relations Minister Amanda Rishworth has signalled the Government’s interest in legislative changes that may again shift the goalposts.

Background

In 2019, Coal LSL issued a notice to Orica to provide documents that would assist determining if its shotfiring employees were “eligible employees” under the PLSL scheme.

Orica maintained its shotfiring employees were not “eligible” – as they were employed under its much more substantial explosives business which was not directly situated under the Black Coal Mining Industry Award (BCMI Award).

However, Orica’s Minova business unit provided a range of other services directly to black coal mines, putting it squarely and “uncontroversially” within the black coal mining industry for the purpose of the BCMI award.

“It is beyond debate that Orica was, prior to its divestment of the Minova business, engaged in multiple enterprises. That one of them – the one operated by its Minova division – was involved in activities sufficient to engage the award definition of ‘black coal mining industry’ is equally clear,” the Full Court said.

“Employees engaged in the supply of shotfiring services will qualify as ‘coal mining employees’ … if they are engaged by employers whose other exertions … are directed toward activities that are apt to be recognised … as components of the black coal mining industry.”

‘Not eligible’ after divestment

Orica bought the Minova business in 2006, integrating it into operations before divestiture in February 2022.

The Full Court found, contrary to Justice Perram’s decision the relevant employees were “eligible” from 2013, that they were eligible from 2013 until February 2022.

The majority noted this would “correct” the earlier judgment:

“The shotfirers that Orica had engaged at black coal mines ‘as and from 2013’ were ‘eligible employees’ under the Administration Act.

“As we have concluded, they were ‘eligible employees’ only for part of that period.”

The BCMI Award contained an exclusion, due to the use of the word “otherwise” in “otherwise engaged in the black coal mining industry”.

The Full Court concluded “for the exclusion to apply, it was necessary to search for some activity of the employer other than the provision of shotfiring services which could be characterised as involving engagement in the black coal mining industry”.

It found employees engaged in “the supply of shotfiring or other explosive services” were not employed in the black coal mining industry (for the purposes of either the BCMI Award or the Administration Act) unless their employer is “otherwise engaged” therein.

This must be determined by whether the employer is engaged in activities listed under cl 4.2 of the BCMI award.

Aside from the existence of the Minova business until 2022, “no additional evidential basis was (provided) to support the proposition that Orica was ‘otherwise engaged’ in the black coal mining industry for the purposes of cl 4.3(g) of the BCMI Award.

“It necessarily follows that the (order made by the primary judge) is in need of refinement.”

Highlighting the complexity of the matter, one member of the bench – Justice Adam Hatcher (who is also President of the Fair Work Commission) – issued a dissenting judgment.

While agreeing with the majority to partially allow the appeal, Justice Hatcher diverted by considering that not enough evidence was provided by the parties as to whether Orica’s business was “otherwise engaged” in the black coal mining industry post-2022.

Government foreshadows legislation

Employment and Workplace Relations Minister Amanda Rishworth last week acknowledged the impact of the decision.

She announced a commitment to “progress legislation for a repayment plan, which would include a debt waiver component for employers with historical levy debts”.

While this may leave employers concerned about the Government expanding the scope of Australia’s longest (and only truly national) PLSL scheme, any such changes would almost certainly be prospective only.

The Government would “continue to work with the Coal Mining Industry (Long Service Leave Funding) Corporation and industry representatives on a balanced approach that supports employers to meet their financial obligations”, she said.

Implications for employers

Despite the clear win for specialist blasting contractors, the court effectively upheld the longstanding broad interpretation of who qualifies as an employee under the Administration Act – focusing on the substance of work performed rather than the employer’s primary business.

Thus, the decision may offer limited (or no) relief for many other employers whose employees perform services “in or about” coal mines or “in connection with” black coal mining operations, but whom otherwise consider themselves outside of the traditional coal mining industry.

Such businesses may face significant unforeseen liabilities, including for past employment periods, should Coal LSL deem their employees fall within the expansive coverage of the scheme.

Employers should implement HR and payroll audits, update contracts and policies and seek advice where roles intersect with coal mining operations.

Members who attended AREEA’s recent Special Interest Group meetings will be aware of AREEA’s focus and research into PLSL schemes across the country.

AREEA will be monitoring the Albanese Government for any amendments to coal PLSL and expansion of other like schemes – and advocating strongly for employers.

For information or advice on PLSL arrangements, [email protected].