The long service leave scheme is legislated under the Coal Mining Industry (Long Service Leave) Administration Act 1992 (the Act).
Employers of eligible employees have legal obligations to ensure those employees can access their long service leave entitlements when eligible to do so. Obligations include, for example:
In addition to matters such as eligibility and entitlement, the legislation addresses:
Non-compliance and breaches of the Act can lead to civil or criminal penalties against an employer and, in certain circumstances, its officers.
Coal LSL has the power to seek civil penalties up to the value of 300 penalty units*. Coal LSL can also require people to produce information or documents relating to the employment of an eligible employee or which Coal LSL needs to perform its functions.
Civil proceedings may also be brought by an employee, employee organisation or industrial association for breaches or potential breaches of the Act. The Court may order compensation, injunctions or other orders.
Fair Work Australia also has power to deal with certain disputes between an employer and an eligible employee in relation to leave.
If you are a national system employer* and you employ people who fit the definition of ‘eligibility’, you are legally obligated to register your company with Coal LSL. More information and registration form.
*The definition of ‘employer’ in Coal LSL’s legislation refers only to a national system employer as defined in section 14 of the Fair Work Act 2009.
If your company is in the process of closing, going into liquidation or no longer operational, you need to de-register with Coal LSL. Please get in touch with us to facilitate that process and to learn what obligations you still have to fulfil under the legislation as part of your close-out processes.
An Authorised Contact is someone appointed by an employer organisation to liaise with Coal LSL about long service leave matters on behalf of the employer and their eligible employees.
These people are usually in payroll or HR roles. They can be authorised by Coal LSL’s Main Contact for your organisation.
We can accept documents for processing from a non-Authorised Contact at your organisation; however, documents must be signed by an Authorised Contact and we will only liaise with an Authorised Contact regarding a matter.
If someone in your team is not yet registered with Coal LSL as an Authorised Contact, the Main Contact for your organisation may make arrangements using the Update Authorised Contact Details form on our website, which can be downloaded from Employer Resources.
IMPORTANT: Online Services users must manage their organisation’s authorised contacts via platform; submitting changes by filling an Update Contact Details Form or via the Employer Portal is no longer necessary.
The portable long service leave scheme for employees in the black coal mining industry operates by imposing a levy on wages paid to eligible employees within the Australian black coal mining industry must make levy payments to Coal LSL. The payroll levy is payable monthly and does not come out of employees’ wages.
What makes up employees' eligible wages is defined in the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992.
The payroll levy rate of 2.7% applies to all eligible employee wages paid on or after 1 July 2023.
Levy rates through time
Goods and Services Tax (GST) is not applied to levy payments. Long service leave levies are neither goods nor services. Levies are not a taxable supply under the GST legislation, therefore, we do not issue tax invoices. Your Levy Advice forms, details of submission and proof of payment should be retained for record keeping purposes.
The legislation provides the minimum entitlements for long service leave, which are:
Briefly: When your employee takes long service leave you are required to pay them at a rate set by their contract of employment or industrial instrument. In addition, the amount you pay them cannot be less than their base rate of pay (including incentive-based payments and bonuses). The amount you are reimbursed is set by the Employer Reimbursement Rules 2017 and is the eligible wages rate per hour. When the amount required to be paid to the employee under your agreement with them is greater than the eligible wages rate per hour then the reimbursed amount will be less than the amount paid to the employee.
In more detail: The amount an employer is required to pay their employee for long service leave is primarily determined by the terms of the employee’s employment agreement or applicable industrial instrument.
The Coal Mining Industry (Long Service Leave) Administration Act 1992 (the Admin Act) – specifically Part 5A, division 1, 39AC (section 39AC) – advises the minimum amount that must be paid to the employee.
Section 39AC Payment for long service leave contemplates that the employee could be paid more than the minimum amount prescribed in that section:
‘(1) If an eligible employee takes a period of long service leave, the employer must pay the employee for the long service leave no less than an amount that is equal to the base rate of pay (including incentive-based payments and bonuses) that would have been payable to the employee during the period had the employee not taken the leave.
(3) In this section: (a) a reference to the base rate of pay payable to an employee is a reference to the employee’s base rate of pay before any amounts are deducted under a salary sacrifice arrangement; and (b) a reference to an incentive-based payment in relation to an employee is a reference to a payment of that kind that is paid to the employee at least once a month; and (c) a reference to a bonus in relation to an employee is a reference to a bonus that is paid to the employee at least once a month.’
If the terms of an employment agreement or applicable industrial instrument provide that the amount an employee is to be paid when long service leave is taken is greater than their base rate of pay (including incentive-based payments and bonuses), an employer would be required to pay their employee more than the minimum amount prescribed in section 39AC for their long service leave.
Rule 9 of the Reimbursement Rules provides for the payment of the reimbursement calculated by multiplying the hours of long service leave taken by the eligible wages amount per hour.
‘The reimbursable amount for a payment to an eligible employee is the amount worked out in accordance with the formula: LSL paid x eligible wages amount per hour’
‘LSL paid’ is defined in that Rule as: ‘LSL paid means the hours (including any part of an hour) of long service leave entitlement paid for by the employer in respect of an eligible employee, not exceeding the hours of long service leave entitlement (including any part of an hour) recorded by the Corporation with respect to that employee, immediately prior to the date of payment by the employer and not including any hours for which a reimbursement has already been made…’
Eligible wages amount per hour is also defined in Rule 9(1): ‘eligible wages amount per hour means the amount per hour of the employee's eligible wages: (a) if the employee is employed by the employer at the time the payment is made – immediately before he or she was paid for, or commenced to take, the long service leave, or (b) if the employee is not employed by the employer at the time the payment is made – immediately before he or she left their employment with that employer.’
The eligible wages amount per hour is in most cases the eligible wages amount used in the levy return form immediately before the leave is taken. If the amount to be paid to the employee when they take their long service leave is greater than the eligible wages amount per hour disclosed in the levy return form, this would result in you as the employer paying an employee while on their leave more than you will receive as a reimbursement from the Fund under Rule 9 of the Reimbursement Rules.
The Employer Reimbursement Rules 2017 outline how Coal LSL calculates reimbursement amounts payable to employers under the Admin Act.
The current rules came into effect on 1 July 2017. Under these rules, on administration approval, an employer will be reimbursed at a rate equivalent to the eligible wages amount per hour which is generally the amount disclosed in the relevant levy return form immediately prior to the leave being taken. See Rule 9 for further details.
Please note: an employer is not able to claim a reimbursement for any amount greater than the amount actually paid to the employee. See sub-rule 9(2).
The changes to the legislation in 2012 are documented in the Coal Mining Industry (Long Service Leave) Administration Act 1992 (the Act).
The key changes were:
Only the legal personal representative of the deceased may make leave accrual enquiries and lodge a claim through the deceased’s last known employer, in accordance with the legislation (Part 5A, Division 3, Section 39CC of the Administration Act 1992).
An employer must pay any unclaimed leave entitlement to the deceased’s legal personal representative within 30 days of a written request. Use the deceased employee Entitlement Application to initiate the process with Coal LSL. It is located under Employer Forms in the Employer Resources section of the website. A certified copy of the official Death Certificate must be provided with the application.
Once payment is made, you can claim reimbursement of the amount through the usual leave reimbursement process.
If the information provided does not resolve your question, please get in touch with us.