The Bill amends two Acts governing the black coal mining industry long service leave scheme. It replaces the existing additional levy formula so that the additional levy equals the Reserve Bank of Australia’s cash rate target plus 2 percentage points (unless a rate is prescribed in regulations), and it inserts a new Schedule establishing a statutory process for approving unpaid levy payment arrangements for historical arrears.
Under the new Schedule, a person with qualifying historical unpaid levy may apply to the Board to enter an approved unpaid levy payment arrangement: instalment payments that approximate 80% of the calculated unpaid levy paid across specified target dates, with the remaining unpaid levy remitted once the arrangement’s sixth target payment is made. The Schedule sets out forms, an auditor’s report requirement, timelines for draft and final arrangements, postponement rules, grounds for Board decisions, and consequences for failure to comply.
The Bill also empowers the Minister to prescribe assumptions where employment records are insufficient so that long service leave entitlements can be worked out.
At a Glance
What It Does
It revises the additional levy calculation in the Payroll Levy Collection Act to be the RBA cash rate target plus 2 percentage points (or a regulations-prescribed rate) and adds a Schedule creating an approval process for unpaid levy payment arrangements that allow instalments approximating 80% of historical arrears with remission of the balance on compliance.
Who It Affects
Coal industry employers with historical unpaid levy, the Coal Industry Long Service Leave Corporation (the Corporation) and its Board, auditors preparing statutory audit reports, and employees whose entitlements depend on reconstructed employment records.
Why It Matters
The Bill provides a legal path to clear longstanding levy arrears while reducing immediate collection risk, but it also moves levy income onto a rate tied to monetary policy and creates compliance and administrative obligations (forms, audits, Board decisions, and tribunal review rights) that employers and regulators must operationalise.
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What This Bill Actually Does
The Bill makes two categories of changes. First, it alters the additional levy calculation: subsection 7(2) is replaced so the extra percentage applied to unpaid levy is set at 2 percentage points above the Reserve Bank’s cash rate target as published (or an equivalent RBA rate if the specific term is discontinued), unless regulations specify another rate.
Second, it introduces a detailed statutory Schedule that creates a regulated route for resolving historical unpaid levy balances.
The Schedule lets a person who has outstanding unpaid levy on a defined unpaid levy calculation day give a notice of intent, submit a draft payment arrangement for the Corporation’s review, and then lodge a formal unpaid levy payment arrangement for Board approval. The Corporation must review drafts within two months and may consult with the person; approved forms must be used and the arrangement must include an auditor’s report attesting to the accuracy of the stated subclause 10(8) amount (the base amount used for instalments).If approved, the arrangement removes certain statutory collection powers and reporting obligations in relation to the wages covered by the arrangement, and replaces them with a timetable of target payments: the first due day (30 days after approval, or 6 months for small business employers) and successive anniversary-based target days whose target amounts are 20%, 35%, 50%, 60%, 70% and 80% of the base amount respectively.
Compliance is achieved when the target amount for the sixth target day has been paid; at that point any remaining unpaid levy covered by the arrangement is remitted in full. The Board can approve limited postponements of target days for hardship or exceptional circumstances, and several Board and Corporation decisions are reviewable by the Administrative Review Tribunal.The Schedule also sets out consequences for non‑compliance: if a person fails to meet a target amount when due, the outstanding unpaid levy amount immediately becomes payable and additional levy and recovery powers re‑apply.
The Bill excludes amounts subject to court orders from the Schedule, requires approved forms to include Criminal Code warnings, and gives the Minister power by legislative instrument to determine the unpaid levy calculation day and to set assumptions where employment information is missing so that employee entitlements can still be worked out.
The Five Things You Need to Know
The Bill replaces the existing additional-levy subsection so the additional levy equals the RBA cash rate target plus 2 percentage points unless regulations prescribe an alternative rate.
A new Schedule lets employers apply for an unpaid levy payment arrangement that sets staged target payments; when the sixth target payment (80% of the base amount) is met the remaining unpaid levy covered by the arrangement is remitted.
Draft payment arrangements must be reviewed by a Corporation employee or consultant within two months, and final arrangements must include an auditor’s report that the specified base amount is correct.
The first due day is 30 days after Board approval (or 6 months for employers who are small businesses); target amounts progress by anniversaries and may be postponed once per target day for up to six months on grounds of significant hardship or exceptional circumstances.
If a person misses a target payment, the outstanding unpaid levy becomes immediately due and recovery powers, additional levy and section 6 instalment rules re‑apply to the outstanding amount.
Section-by-Section Breakdown
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Tie additional levy to the RBA cash rate plus 2 percentage points
The Bill repeals and replaces subsection 7(2) of the Payroll Levy Collection Act so the additional percentage (the extra charge on late or unpaid levy) is set at 2 percentage points above the Reserve Bank’s cash rate target as published. If the Reserve Bank stops using the specific term, the provision looks to the most recent substantially equivalent published rate. The regulations may instead prescribe an interest rate for that purpose. Practically, the additional levy will vary with monetary policy unless the regulations fix a different rate; the Bill also removes the prior subsection 7(4).
Ministerial power to prescribe assumptions where records are insufficient
The Bill inserts section 39G into the Coal Mining Industry (Long Service Leave) Administration Act to address situations where an unpaid levy payment arrangement has been approved but employment records are incomplete. Where lack of sufficient information prevents working out an employee’s long service leave entitlement, the Board’s approved unpaid levy payment arrangement must be implemented using assumptions determined under the section. The Minister may, by legislative instrument, determine such assumptions; the clause explicitly allows other reasonable assumptions to be used and cross‑references definitions from the Payroll Levy Collection Act.
Who can apply and what arrears are covered
The Schedule defines the unpaid levy calculation day and clarifies that the scheme applies only to historical unpaid levy not subject to court orders. It sets out core definitions (base amount, unpaid levy, unpaid levy payment arrangement, long service leave cessation payments) and explains that the Minister may determine the unpaid levy calculation day by legislative instrument. The Schedule also makes clear that a person’s liability to pay unpaid levy is not extinguished by the Schedule except where explicit remission occurs on compliance with an approved arrangement.
Process to draft, lodge and have the Board approve instalment arrangements, plus the payment timetable
The Schedule prescribes a two‑stage procedure: a notice of intention, a draft for Corporation review (Corporation must review within two months and may advise), then lodgement of a formal unpaid levy payment arrangement in an approved form that must include an auditor’s report. The Board must decide within 30 days (or following compliance with an information request) whether to approve. If approved, the arrangement replaces certain collection and reporting obligations for the wages covered and sets target payments on the first due day and successive anniversaries (20%, 35%, 50%, 60%, 70%, 80% of the base amount). The person complies once the sixth target amount has been paid; upon compliance any remaining unpaid levy covered by the arrangement is remitted. If the person fails to meet a target day payment, the outstanding unpaid levy becomes payable immediately and additional levy and recovery provisions restart in respect of that outstanding amount.
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Explore Employment in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Employers with historical unpaid levy: They gain a statutory process to clear old arrears via staged instalments and, crucially, remit any remaining covered unpaid levy once they meet the sixth target payment — converting uncertain, large liabilities into a predictable payment schedule.
- Small business employers: The first due day for small businesses is extended from 30 days to 6 months after Board approval, giving them more breathing room before the instalment timetable begins.
- Employers who previously made long service leave cessation payments: Those specified cessation payments reduce the base amount used to calculate target instalments, so employers that already made in‑lieu payments can lower their instalment burden under an arrangement.
- Employees whose entitlements must be reconstructed: The Minister’s power to determine assumptions and the Schedule’s allowance for reasonable assumptions create a legal mechanism to compute entitlements where records are missing, reducing administrative limbo for affected employees.
- The Corporation and Board: They obtain a clear statutory framework and discretions (forms, audit review, postponements, approval grounds and tribunal review pathways) to manage historical arrears consistently rather than by ad hoc administrative practice.
Who Bears the Cost
- The long service leave fund (and indirectly employers or levy payers collectively): Remitting the remainder of covered unpaid levy after compliance means the Corporation absorbs a fiscal loss relative to full recovery, which may affect scheme funding or future levy settings.
- Employers required to apply and comply with the scheme: Preparing draft and final arrangements, commissioning auditors’ reports, assembling evidence of cessation payments and responding to Corporation information requests create compliance costs and professional fees.
- Auditors and consultants: The Bill creates a demand for statutory audit reports and advisory reviews within specified timeframes; auditors shoulder reputational and professional risk because the arrangement depends on their opinion that the specified amount is correct.
- Administrative bodies and tribunals: The Corporation, the Board and the Administrative Review Tribunal will face increased workloads handling draft reviews, approvals, postponement petitions, and reviews of adverse decisions, with attendant resource implications.
- Employees potentially disadvantaged by assumptions: While assumptions allow entitlements to be calculated, they can produce outcomes less favorable to some employees if historical information is incomplete and assumptions are conservative or employer‑favoured.
Key Issues
The Core Tension
The central dilemma is balancing the public interest in recovering historical unpaid levy (and maintaining fund integrity) against the practical need to resolve arrears where records are poor and recovery costs are high: the Bill offers a pragmatic remission‑for‑compliance route that expedites resolution but necessarily sacrifices some recoveries and places heavy reliance on audits and ministerially‑determined assumptions.
The Bill deliberately trades collection certainty for a partial write‑off: by remitting the residual unpaid levy after a prescribed instalment sequence the Schedule encourages uptake of arrangements, but it also removes the incentive for full recovery and creates a measurable fiscal cost. That trade‑off depends heavily on the quality of audit reports and the assumptions used to compute base amounts; weak audits or employer‑favourable assumptions could materially understate original unpaid levy and transfer risk to the Corporation.
Operationally, the scheme raises implementation questions. The Corporation and Board must draft and publish approved forms, set guidance for acceptable assumptions, and resource timely reviews; the Minister’s power to determine the unpaid levy calculation day and assumptions centralises important discretion in instruments rather than primary legislation.
The link of additional levy to the RBA cash rate plus a fixed margin makes levy charges volatile with monetary policy and could produce unpredictability for employers and for the fund’s income forecasting. Finally, the Administrative Review Tribunal’s review rights create a procedural brake — useful for fairness but one that can delay enforcement and complicate cash‑flow management when disputes arise.
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