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Sweeping reforms are required to the coal mining industry’s long service leave scheme to address a wide array of problems and restore employer and employee confidence in the scheme, AREEA has told a formal review.

In its submission to the Australian Government’s independent review of the Coal Mining Industry (Long Service Leave Funding) framework (‘Coal LSL Scheme’) AREEA has detailed fundamental, deep-seeded flaws in the scheme and its administering body.

“AREEA members have an interest in ensuring the Coal LSL Scheme is a fair and equitable system for all industry participants, and that it is managed efficiently and transparently,” AREEA Head of Policy and Public Affairs, Tom Reid, said (pictured below).

“Consultation with AREEA members operating in the black coal mining industry reveal wide-ranging concerns and a large number of required reforms to bring the scheme into line with the above principles.”

KPMG, which was tasked in June by the Commonwealth Attorney-General’s Department to undertake the review, is examining the Coal LSL Scheme across four categories: Coverage; Compliance and Enforcement; Governance; Administration; and Other Matters.

AREEA’s submission provides evidence in each area however notes four dominant themes emerged from its member consultations:

  1. Significant conflict between specialist contractors and supply sector employers with the administering body – Coal LSL Corporation (‘Coal LSL’) – about eligibility of their employees to be covered by the Coal LSL Scheme;
  1. Inequities between how casual employment and permanent employment is treated under the Scheme, including levy payments, qualifying service accrual and ambiguity about the calculation of eligible wages for casual employees paid a loaded / flat hourly rate;
  1. Widespread frustrations about the inability and/or unwillingness of Coal LSL to clarify the above and other matters, and to work with employers to resolve disputes; and
  1. Widely held view that if Coal LSL was to administer payments of LSL entitlements directly to employees, coal mining industry participants would be freed from an enormous amount of compliance and regulatory burden and have associated costs with the scheme greatly reduced.

“For contractors and service suppliers to the coal mining industry, coverage represents the single biggest issue. The overwhelming experience is that any provision of an auxiliary service to an operating coal mine is considered by Coal LSL to fall within the coverage of the scheme,” Mr Reid said.

“This has seen hundreds, potentially thousands of employers which do not consider themselves to operate primarily in the coal mining industry served with claims notices by Coal LSL due to their provision of a service to a coal mine.”

In relation to coal mining employers who are registered with the Scheme, the problems are complex and wide-ranging.

“Employers are frustrated with the way Coal LSL goes about its business like a ‘tax collector’ and offers no practical assistance or guidance to understanding their legal requirements, which can be described as ambiguous at best,” Mr Reid continued.

“There are also clear inequities and inconsistencies when it comes to the treatment of casual employees, as well as more general concerns about how claims are assessed and reimbursed to employers.

“At the end of the day, the scheme is clearly not doing its job when employers rarely, if ever, are reimbursed back the full monetary costs of the entitlement they are required to pay-out to employees.”

AREEA thanks its members for their input and involvement in this submission. Ongoing updates will be provided as the review process progresses throughout the course of the year.

For more information, contact [email protected]

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