Coal Mining Industry (Long Service Leave Funding) Corporation v Hitachi Construction Machinery (Australia) Pty Ltd
[2023] FCA 68
•8 February 2023
FEDERAL COURT OF AUSTRALIA
Coal Mining Industry (Long Service Leave Funding) Corporation v Hitachi Construction Machinery (Australia) Pty Ltd [2023] FCA 68
File number: NSD 843 of 2021 Judgment of: RAPER J Date of judgment: 8 February 2023 Catchwords: INDUSTRIAL LAW – whether the employees were “eligible” employees within the meaning of the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth) – whether any recovery of outstanding levies are subject to the prescribed limitation period under s 14(1)(d) of the Limitation Act 1969 (Cth) – application allowed in part Legislation: Constitution ss 81, 109
Coal Excise Act 1949 (Cth)
Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth) Pt 5A; ss 3, 4, 6(2)(a), 7, 7(da) 8, 9, 10, 39, 39A, 39A(2), 39A(3), 39AA, 39AA(2)(c), 39AB(5), 39BC, 39CA, 39CB, 39CC, 39D, 39DA, 39E, 39EA, 39EB, 40, 41, 43, 43(5), 43(6), 44, 47, 48, 49, 49A, 49A(2), 51, 52A, 52C
Coal Mining Industry (Long Service Leave Funding) Act 1992 (Cth) s 44(3)
Coal Mining Industry (Long Service Leave Funding) Amendment Act 2009 (Cth) Sch 2
Coal Mining Industry (Long Service Leave) Amendment Act 2011 (Cth)
Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992 (Cth) ss 4, 5, 6
Coal Mining Industry (Long Service Leave) Payroll Levy CollectionAct 1992 (Cth) ss 3, 3B, 4, 5, 6, 7, 8, 9, 9(2), 10, 10(1), 10A, 10B, 11, 11(1), 12, 13, 13(7), 13A, 13A(2)
Coal Tariff Legislation Amendment Act 1992 (Cth)
Excise Tariff Act 1921 (Cth)
Fair Work Act 2009 (Cth) ss 48(5), 113, 155, 535
Federal Court of Australia Act 1976 (Cth) s 21
Income Tax Assessment Act 1936 (Cth) s 206
Judiciary Act 1903 (Cth) ss 64, 79, 79(1)
Public Governance, Performance and Accountability Act 2013 (Cth) s 46
Regulatory Powers (Standard Provisions) Act 2014 (Cth) Pt 4; ss 82, 82(2)
Regulatory Powers Standardisation Reform Act 2017 (Cth)
States Grants (Coal Mining Industry Long Service Leave) Act 1949 (Cth)
Limitation Act 1969 (NSW) ss 10, 10(3) 11, 14(1)(d), 14(3), 18, 18(1)
Limitation of Actions Act 1974 (Qld)
Long Service Act 1955 (NSW) s 4(2)(b)(i)
Long Service Act 1987 (SA) s 4(2)
Coal Mining Industry (Long Service Leave) Payroll Levy Regulations 2018 (Cth) reg 6
Fair Work Regulations 2009 (Cth) Part 3-6, Division 3
Employer Reimbursement Rules 2017 (Cth) rr 8, 9, 10
Cases cited: Air Caledonie International v Commonwealth [1988] HCA 61; 165 CLR 462
Airservices Australia v Canadian Airlines [1999] HCA 62; 202 CLR 133
Australian Securities and Investments Commission v Edensor Nominees Pty Ltd [2001] HCA 1; 204 CLR 559
Australian Tape Manufacturers Association Ltd v Commonwealth [1993] HCA 10; 176 CLR 480
Bass v Permanent Trustee Co Ltd [1999] HCA 9; 198 CLR 334
BioGiene Pty Limited v Mullan [2022] FCAFC 73
Bis Industries Limited v Construction, Forestry, Maritime, Mining and Energy Union [2021] FCA 1374
Central West Group Apprentices Ltd v Coal Mines Insurance Ltd [2008] NSWCA 348
Coal Mining Industry (Long Service Leave Funding) Corporation v Commissioner of Taxation (Cth) (1998) 85 FCR 401
Coal Mining Industry (Long Service Leave Funding) Corporation v Commissioner of Taxation [1999] FCA 249; 85 FCR 416
Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; 149 CLR 337
Commonwealth v Cigamatic Pty Ltd (in liq) [1962] HCA 40; 108 CLR 372
Commonwealth v Mewett [1997] HCA 29; 191 CLR 471
Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; 398 ALR 404
Dao v Australian Postal Commission [1987] HCA 13; 162 CLR 317
Deputy Commissioner of Taxation v Moorebank Pty Ltd [1988] HCA 29; 165 CLR 55
DTR Securities Pty Ltd v Deputy Commissioner of Taxation (Cth) (1987) 8 NSWLR 204
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; 251 CLR 640
Ellavale Engineering Pty Ltd v Pilgrim [2005] NSWCA 272; 2 DDCR 744
Fair Work Ombudsman v Toyota Material Handling (NSW) Pty Limited [2012] FCAFC 193; 209 FCR 428
Federated Engine Drivers & Firemen’s Association of Australasia v Roche Bros (Queensland) Pty Limited [1990] ACIndT 4388
Guss v Deputy Commissioner of Taxation [2015] FCA 841; 238 FCR 509
Hocking v Director-General of the National Archives of Australia [2020] HCA 19; 271 CLR 1
Idya Pty Ltd v Anastasiou [2008] NSWCA 102
Independent Commission Against Corruption v Cunneen [2015] HCA 14; 256 CLR 1
International Air Transport Association v Ansett Australia Holdings Ltd(Subject to Deed of Company Arrangement) [2008] HCA 3; 234 CLR 151
Jacobsen v Rogers [1995] HCA 6; 182 CLR 572
Josephson v Walker [1914] HCA 68; 18 CLR 691
Launceston Corporation v Hydro-Electric Commission [1959] HCA 12; 100 CLR 654
Luton v Lessels [2002] HCA 13; 210 CLR 333
Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; 210 CLR 181
Maguire v Simpson [1977] HCA 63; 139 CLR 362
Matthews v Chicory Marketing Board (Vic) [1938] HCA 38; 60 CLR 263
Metropolitan Health Service Board v Australian Nursing Federation [2000] FCA 784; 99 FCR 95
Northern Suburbs General Cemetery Reserve Trust v Commonwealth [1993] HCA 12; 176 CLR 555
Northern Territory v GPAO [1999] HCA 8; 196 CLR 553
Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; 218 CLR 451
Priority Stage Award Modernisation Decision [2008] AIRCFB 1000 at [156]–[157]
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355
R v Hickman; Ex parte Fox and Anor [1945] HCA 53; 70 CLR 598
R v Moore; Ex Parte Australian Workers’ Union (1976) 11 ALR 449
Re Election for Office in Transport Workers Union of Australia, Western Australian Branch (1992) 40 IR 245
Re McGee; Re Inquiryinto Elections for Offices within Transport Workers Union and the Victorian Branch thereof (1992) 41 IR 27
Roy Morgan Research Pty Ltd v Commissioner of Taxation & Anor [2011] HCA 35; 244 CLR 97
State Insurance Regulatory Authority v Abdul-Rahman [2016] NSWCA 210; 93 NSWLR 21
Sue v Hill [1999] HCA 30; 199 CLR 462
Superannuation Fund Investment Trust v Commissioner of Stamps (SA) [1979] HCA 34; 145 CLR 330
Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd [2002] FCA 1406; 121 IR 250
The Australian Industry Group [2012] FWA 9606
The Commonwealth v Rhind [1966] HCA 83; 119 CLR 584
The Commonwealth v Western Australia [1999] HCA 5 196 CLR 392
The King v Central Reference Board; Ex Parte Thiess (Repairs) Pty Ltd [1948] HCA 9; 77 CLR 123
Thomas v Ducret (1984) 153 CLR 506
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165
Transport Workers Union of Australia v Coles Supermarkets Australia Pty Ltd [2014] FCAFC 148; 245 IR 449
Waratah Engineering Pty Ltd v Baggs [2013] NSWCA 427
Whittaker & Child Support Registrar (No 2) [2012] FamCAFC 203
Whittaker v Child Support Registrar [2013] HCASL 39
WorkPac Pty Ltd v Rossato [2021] HCA 23; 271 CLR 456
ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2; 398 ALR 603
Zhu v Treasurer of NSW [2004] HCA 56; 218 CLR 530
Division: Fair Work Division Registry: New South Wales National Practice Area: Employment and Industrial Relations Number of paragraphs: 358 Date of hearing: 25, 28, 29 July and 29 August 2022 Counsel for the Applicant: Mr Y Shariff SC with Mr T Kane Solicitor for the Applicant: Ashurst Australia Counsel for the Respondent: Mr M Follett with Mr A Pollock Solicitor for the Respondent: Ai Group Workplace Lawyers ORDERS
NSD 843 of 2021 BETWEEN: COAL MINING INDUSTRY (LONG SERVICE LEAVE FUNDING) CORPORATION
Applicant
AND: HITACHI CONSTRUCTION MACHINERY (AUSTRALIA) PTY LTD (ACN 000 080 179)
Respondent
ORDER MADE BY:
RAPER J
DATE OF ORDER:
8 FEBRUARY 2023
THE COURT ORDERS THAT:
1.The parties confer with a view to agreeing upon the form of the orders to be made by the Court to give effect to the reasons published today, and in the event of agreement, submit the orders to the Court where they will be made in their absence.
2.In the absence of agreement on the form of the appropriate orders by 17 February 2023:
(a)the applicant file and serve by 4pm (AEDT) on 17 February 2023 the form of orders it proposes to give effect to the Court’s judgment today;
(b)the respondent file and serve by 4pm (AEDT) on 22 February 2023 the form of orders it proposes to give effect to the Court’s judgment today.
3.The matter be adjourned until 28 February 2023 for consideration of the orders to be made and the subsequent timetabling of the remainder of the matter.
4.There be liberty to the parties to apply.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
RAPER J:
Introduction
[1]
Evidence at trial
[6]
The three issues to be determined
[11]
Background to the scheme
[13]
“Eligible employee”
[20]
“Black coal mining industry”
[23]
Relevant legislative provisions
[31]
The imposition of the levy
[41]
The evidence
[49]
The respondent’s evidence
[49]
The applicant’s evidence
[59]
Mr Benjamin Garland
[62]
Mr Brenton Gee
[66]
Mr Bradley Stair
[70]
Mr Graeme Cooper
[72]
Common contractual terms
[75]
Common experience of the employees
[85]
Overburden
[98]
The Field Service team
[99]
Notion of “flexibility”
[104]
The mine sites’ workshops and use of mine site tools, equipment and consumables
[114]
Rosters
[121]
Supervision
[128]
Training
[153]
Supplementary labour
[158]
“Eligible employees” and “black coal mining industry”
[160]
A. “employed in the black coal mining industry”
[163]
B. “duties directly connected with the day to day operation of a black coal mine”
[179]
Whether the determination is confined solely to a consideration of the employees’ contracted terms
[180]
The applicant’s alternative case – the constructional question is resolved in its favour by virtue of the employees’ contracts
[196]
Issue 1: Are the Respondent’s employees “eligible employees” within the meaning of limb (b) i.e. are they employed in the black coal mining industry?
[201]
Employment Limb – Are the specific employees employed in the black coal mining industry?
[202]
The Location Limb – Whether the employees’ duties were carried out at or about a place where black coal is mined?
[222]
Operational Limb – Are the specific employees’ duties directly connected with the day to day operation of the black coal mine?
[228]
Issue 2: Are the Respondent’s employees “eligible employees” within the meaning of limb (a) i.e. are they employed in the black coal mining industry and had duties directly connected with the day-to-day operation of a black coal mine?
[239]
Employer limb – employed by an employer engaged in the black coal mining industry
[240]
Issue 3: Whether any recovery of outstanding levies is subject to the limitation period prescribed in s 14(1)(d) of the Limitation Act?
[251]
Does the legislative scheme “cover the field” for the purpose of Hitachi’s limitation defence?
[264]
If the scheme does not cover the field, does the limitation at s 10(3) of the Limitation Act otherwise apply?
[277]
Whether the levy constitutes a “tax”?
[285]
Whether the applicant’s proceedings constitute “an action by the Crown”
[313]
Functions, powers and features of the applicant
[320]
Consideration of the legislative scheme
[331]
Is the additional levy a penalty for the purposes of s 18 of the Limitation Act?
[341]
Conclusion
[355]
Introduction
This application concerns whether the applicant (Coal LSL), a federal statutory corporation which administers the Coal Mining Industry (Long Service Leave) scheme (LSL scheme) is entitled to declaratory relief (relating to four employees of the respondent (Hitachi)) and the ordering of pecuniary penalties against Hitachi by reason of it having failed to pay the relevant levy associated with the accrual of long service leave to the applicant in respect of four employees of the respondent.
The applicant is responsible for the administration of the following legislation: the Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992 (Cth) (the Levy Act), the Coal Mining Industry (Long Service Leave) Payroll Levy CollectionAct 1992 (Cth) (the Collection Act), and the Coal Mining Industry (Long Service Leave)Administration Act 1992 (Cth) (the Administration Act) (collectively referred to as the Scheme).
The Scheme constitutes a unique long service leave arrangement for the black coal mining industry whereby an employee accrues long service leave based on an employee’s service in that industry, rather than service with a particular employer.
The four relevant employees, who are the subject of the application, held the following positions with the respondent over the following periods:
Employee Period employed by the Respondent Role held Where work performed Mr Garland
May to mid-June 2010 Mechanical Fitter – performing bench repair work on dump truck “final drive” components Muswellbrook branch June 2010 until Feb 2014, Nov 2017 until Dec 2020 Mechanical Fitter – performing maintenance and repair work on Hitachi mining equipment At various black coal mine sites Feb 2014 until Nov 2017 Shift Coordinator – supervise crews performing maintenance and repair work on the hydraulic loading shovel and dump trucks At or about the Liddell mine (save for two months at the Glendell mine) Mr Gee Jan 2011 to Nov 2019 Fitter – performing maintenance and repair work on Hitachi equipment At or about the Liddell Mine (save for six months between 2016 and 2017 at the Glendell mine) Mr Stair March 2014 to date High voltage electrician (April 2014 to about 2019), maintaining and repairing hydraulic loading shovel and dump trucks and then from 2019 as a Team Leader of other employees and continuing to maintain and repair work on the hydraulic loading shovel and dump trucks. At or about the Liddell mine Mr Cooper April 2010 to Dec 2020 Mechanical Fitter – performing maintenance and repair work on Hitachi mining equipment At various black coal mining sites
The respondent’s enterprise involves supplying new and used earthmoving and materials handling equipment, and after-sales maintenance support, to customers in a wide range of industries, including the black coal mining industry. Part of the reason for the disagreement between the parties, regarding the respondent’s employees being covered by this legislative scheme, is that the work the relevant employees were performing for the respondent’s black coal mining clients comprises only 2.6% of the total annual revenue of Hitachi’s enterprise. The respondent operates through a network of branches across Australia grouped into four geographical regions, the Eastern region being where the relevant employees were employed. The relevant Muswellbrook branch derives most of its revenue from black coal mining given its geographical location. By contrast, the Western region derives most of its revenue from iron ore mining.
Evidence at trial
The evidence in chief of all witnesses was given by affidavit.
The applicant led evidence from each of the relevant employees together with evidence from Mr Trent Sebbens, solicitor for the applicant. None of the applicant’s witnesses were required for cross-examination.
The respondent led evidence from Mr Stephen Smith (solicitor for the respondent), Mr Richard Trench (Service Manager), Mr Jason Gleeson (Regional General Manager – Eastern) and Mr Ricardo Moledo (Director – Product Support). Only Mr Gleeson and Mr Moledo were required for cross-examination. Whilst there are differences in the evidence of the witnesses, I am of the view that each witness gave their evidence honestly and endeavoured to assist the Court.
The first stage of the hearing, and for which these reasons are confined, concerns first questions of liability; and secondly the applicability of s 14(1)(d) of the Limitation Act 1969 (NSW).
The question of liability concerns whether the relevant employees comprise “eligible employees” within the meaning of s 4 of the Administration Act as follows:
eligible employee means:
(a) an employee who is employed in the black coal mining industry by an employer engaged in the black coal mining industry, whose duties are directly connected with the day to day operation of a black coal mine (limb (a)); or
(b)an employee who is employed in the black coal mining industry, whose duties are carried out at or about a place where black coal is mined and are directly connected with the day to day operation of a black coal mine (limb (b)); or
(c) an employee permanently employed with a mine rescue service for the purposes of the black coal mining industry; or
(d) a prescribed person who is employed in the black coal mining industry;
but does not include a person declared by the regulations not to be an eligible employee for the purposes of this Act.
(Descriptions for limbs (a) and (b) added; Emphasis in original.)
The three issues to be determined
The parties agree that there are three issues which require determination in these proceedings:
(1)Whether the relevant employees were “eligible employees” within limb (b) of the s 4 definition above, because they:
(a)were employed in the black coal mining industry;
(b)carried out their duties at or about a place where black coal is mined; and
(c)had duties which were directly connected with the day-to-day operation of a black coal mine.
(2)Whether the relevant employees were “eligible employees” within limb (a) of the s 4 definition above, because they:
(a)were employed in the black coal mining industry;
(b)were employed by an employer engaged in the black coal mining industry; and
(c)had duties directly connected with the day-to-day operation of a black coal mine.
(3)Whether any recovery of outstanding levies is subject to the limitation period prescribed in s 14(1)(d) of the Limitation Act.
For the reasons which follow, I conclude the following:
(1)The four employees were eligible employees within limb (b);
(2)The four employees were not eligible employees within limb (a); and
(3)The outstanding levies are not subject to the limitation period prescribed in s 14(1)(d) of the Limitation Act because the Scheme covers the field. If I had been required to, I would have found in the alternative that ss 10(3) applied and 18 of the Limitation Act did not apply.
Background to the scheme
The Commonwealth scheme for long service leave in the coal mining industry was first introduced in 1949 by way of the following legislation: the States Grants (Coal Mining Industry Long Service Leave) Act 1949 (Cth); Coal Excise Act 1949 (Cth); complementary legislation in participating States; and amendments to the Excise Tariff Act 1921 (Cth). The scheme then granted long service leave benefits to black coal miners under Federal awards made by the previous Coal Industry Tribunal. The scheme was operated by the Commonwealth collecting an excise per tonne of coal produced, and making grants to participating States for the reimbursement of employers.
In 1991, the scheme underwent substantial review leading to the introduction of the Coal Mining Industry (Long Service Leave Funding) Act 1992 (Cth) (as the Administration Act was then called), the Levy Act, and the Collection Act, as well as the Coal Tariff Legislation Amendment Act 1992 (Cth) providing for the removal of the long service leave component of the excise duty on coal. It was at this time that the applicant was established, and entitlements were funded by an employer levy scheme, whereby a levy was imposed on wages paid to employees, and employers were reimbursed by the relevant State which was in turn reimbursed by a trust fund. Entitlements to long service leave under this scheme arose from Federal industry awards. Part of the reason for the imposition of the levy, as contained in the Explanatory Memorandum, Coal Mining Industry (Long Service Funding) Bill 1992, was by reason of the identification of a number of deficiencies within the Scheme including a $250.2 million unfunded liability for untaken long service leave as at 30 June 1990.
The Coal Act 1992 defined, in s 4, an “eligible employee” to mean:
(a) a person employed in the black coal mining industry under a relevant industrial instrument the duties of whose employment are carried out at or about a place where black coal is mined; or
(b) a person employed by a company that mines black coal the duties of whose employment (wherever they are carried out) and are directly connected with the day to day operation of a black coal mine; or
(c) a person permanently employed on a full-time basis in connection with a mine rescue service for the purposes of the black coal mining industry the duties of whose employment require him or her to be located at a mines rescue station; or
(d) any prescribed person who is, or is any person who is included in a prescribed class of persons who are, employed in the black coal mining industry;
but does not include:
(e) a person the duties of whose employment are performed in South Australia; or
(f) a person who is, or a person who is included in a class of person who are, declared by the regulations not be an eligible employee or eligible employees for the purposes of this Act.
Notably, the Coal Act 1992 did not require that the eligible employee be covered by a “relevant industrial instrument” in the “black coal mining industry”, given the employee could be covered by sub-ss (b) to (d). However, as a matter of substance, in large measure, the only other available source of entitlement came from sub-s (b) which required that the employer be limited to “a company that mines black coal the duties of whose employment (wherever they are carried out) and are directly connected with the day to day operation of a black coal mine”. It also did not contain a definition of “black coal mining industry”. Whilst an employee did not need to be employed in the “black coal mining industry”, they did need to be employed by “a company that mines black coal” (a more restrictive definition than in the current legislation).
From the commencement of the Fair Work Act 2009 (Cth) (the FW Act) on 1 January 2010, Federal industry awards were superseded by modern awards under the FW Act. The FW Act precluded modern awards from containing long service leave terms, but existing award-based entitlements were preserved as a statutory entitlement under the National Employment Standards, pending development of national long service leave arrangements: ss 113, 155 of the FW Act.
By the Coal Mining Industry (Long Service Leave Funding) Amendment Act 2009 (Cth) (2009 Amendment Act), provision was made to ensure that employers were entitled to reimbursement from the fund in respect of long service leave payments they made to employees pursuant to the preserved entitlements in the FW Act: s 44(3) of the Coal Act 1992 (as at 1 January 2010).
Notably, the 2009 Amendment Act amended the definition of “eligible employee” and introduced a definition of “black coal mining industry”, both of which have operated at all relevant times and continue to operate.
“Eligible employee”
The 2009 Amendment Act amended the definition of an “eligible employee” to comprise:
(a) an employee who is employed in the black coal mining industry by an employer engaged in the black coal mining industry, whose duties are directly connected with the day to day operation of a black coal mine; or
(b) an employee who is employed in the black coal mining industry, whose duties are carried out at or about a place where black coal is mined and are directly connected with the day to day operation of a black coal mine; or
(c) an employee permanently employed in a mine rescue service for the purposes of the black coal mining industry; or
(d) a prescribed person declared by the regulations not to be an eligible employee for the purposes of this Act.
Accordingly, by reason of the FW Act amendments, a person could no longer fall within the definition of “eligible employee” by virtue of being covered by “a relevant industrial instrument”. Sub-section (a) was amended and replaced by a broader definition replacing the previous sub-ss (a) and (b).
However, the definition of “eligible employee” picked up, in part, the definition of “coal mining employees”, from cl 4.1(b) of the Black Coal Mining Industry Award 2010, the coverage provision in the Award. Clause 4.1 is extracted in full as follows:
4.1 This award applies to:
(a) employers of coal mining employees as defined in clause 4.1(b); and
(b) coal mining employees.
Coal mining employees are:
(i)employees who are employed in the black coal mining industry by an employer engaged in the black coal mining industry, whose duties are directly connected with the day to day operation of a black coal mine and who are employed in a classification or class of work in Schedule A—Production and Engineering Employees or Schedule B—Staff Employees of this award;
(ii)employees who are employed in the black coal mining industry, whose duties are carried out at or about a place where black coal is mined and are directly connected with the day to day operation of a black coal mine and who are employed in a classification or class of work in Schedule A—Production and Engineering Employees or Schedule B—Staff Employees of this award.
(Emphasis in original.)
“Black coal mining industry”
Furthermore, the 2009 Amendment Act inserted a definition of “black coal mining industry” and is now defined as follows:
black coal mining industry has the same meaning as in the Black Coal Mining Industry Award 2010 as in force on 1 January 2010.
The Award defined, in cll 4.2 and 4.3, the “black coal mining industry” to have:
4.2 … the meaning applied by the courts and industrial tribunals, including the Coal Industry Tribunal. Subject to the foregoing, the black coal mining industry includes:
(a)the extraction or mining of black coal on a coal mining lease by means of underground or surface mining methods;
(b)the processing of black coal at a coal handling or coal processing plant on or adjacent to a coal mining lease;
(c) the transportation of black coal on a coal mining lease; and
(d) other work on a coal mining lease directly connected with the extraction, mining and processing of black coal.
4.3 The black coal mining industry does not include:
(a)the mining of brown coal in conjunction with the operation of a power station;
(b)the work of employees employed in head offices or corporate administration offices (but excluding work in town offices associated with the day-to-day operation of a local mine or mines) of employers engaged in the black coal mining industry;
(c)the operation of a coal export terminal;
(d)construction work on or adjacent to a coal mine site;
(e) catering and other domestic services;
(f) haulage of coal off a coal mining lease (unless such haulage is to wash plant or char plant in the vicinity of the mine); or
(g)the supply of shotfiring or other explosive services by an employer not otherwise engaged in the black coal mining industry.
NOTE: See, for example, decision of the Coal Industry Tribunal in Australian Collieries Staff Association and Queensland Coal Owners Association – No 20 of 1980, 22 February 1982 [Print CR 2997].
(Emphasis in bold in original; Emphasis in underline added.)
Justice White considered comprehensively, in Bis Industries Limited v Construction, Forestry, Maritime, Mining and Energy Union [2021] FCA 1374, at [43]–[75], the many court and tribunal decisions, before 2008 (when the Award was modernised and included reference to the meaning of “black coal mining” having the “same meaning” as those prior decisions). His Honour made a number of conclusions which could be drawn from those authorities about the term “black coal mining industry” and employment in that industry, at [76], which is extracted as follows:
This review of the authorities suggests that the following conclusions may be drawn about the term “black coal mining industry” and employment in that industry:
(a) the terms “coal mining industry” and “black coal mining industry” are not capable of clear definition: Drake-Brockman per Starke J at 59; R v Hickman at 614 (Dixon J). The difficulty of definition is reflected in cll 4.2 and 4.3 of the Black Coal Award;
(b)the industry is the production of black coal by mining operations. Those operations include the excavation of the coal from the seam; its removal from the pit; and the placement of coal on the surface in disposable form: Drake Brockman per Latham CJ at 56. This seems to be reflected in cl 4.2(a) of the Black Coal Award which states that the industry includes the extraction or mining of black coal on a coal mining lease by means of underground or surface mining methods;
(c)the industry does not include all the forms of subsequent processing, treatment or use of black coal (Drake-Brockman at 56) but does include its processing at a coal handling or processing plant on or adjacent to a coal mining lease (cl 4.2(c));
(d)the industry does include the transportation of black coal on a coal mining lease (cl 4.2(c)) but not the haulage of the coal away from the mine site: R v Hickman;
(e)the mere fact that the activities are carried on at a mine site does not necessarily mean that they are undertaken in the coal mining industry;
(f)correspondingly, the fact that activities in connection with coal mining operations are carried on at locations geographically separate from the coal mine will not necessarily mean that the activities are not part of the coal mining industry;
(g)the control exercised by the mine operator of the work is an important consideration (Thiess Repairs; Transfield Services; CQ Industries);
(h)whether particular employment is in the black coal mining industry is to be determined as a question of fact by consideration of the “substantial character” of the industrial enterprise in which the employer and the employee are concerned (Thiess Repairs per Latham CJ at 130-1, 135; Poon Bros Case at 454-5) and by consideration of the degree of connection or separateness between the activity in question and the mining operations (Thiess Repairs per Dixon J at 140-1; Colliery Staff Case at 16; Central West at [50]); and
(i)some activities associated with coal mines have not been regarded as part of the coal mining industry. These include:
(i)the haulage of the coal by an independent contractor from the mine to an offsite location: R v Hickman and see cl 4.3(f);
(ii)the maintenance of equipment used in a mine by employees of an entity separate from the mine operator which is undertaken in a workshop separate from, but adjacent to, the mine: Thiess Repairs; Transfield Services; and
(iii)the provision of catering and cleaning services to mining companies by the employees of independent contractors: Poon Bros Case at 454-5; Re Spotless and see cl 4.3(e).
(Emphasis in original.)
The Explanatory Memorandum, Coal Mining Industry (Long Service Leave Funding) Amendment Bill 2009 (Cth) described the purpose of the amendments to the Scheme to include, inter alia:
… to ensure that the scheme applies universally in the black coal mining industry from 1 January 2010:
•the definition of ‘black coal mining industry’ in the Funding Act (which flows through to related legislation) will be aligned with the definition in the Coal Award; and
•the current long service leave entitlements in the Coal Mining Industry (Production and Engineering) Consolidated Award 1997 (the main industry award) will be extended to all eligible employees who do not otherwise have an award-derived long service leave entitlement.
By the Coal Mining Industry (Long Service Leave) Amendment Act 2011 (Cth) (2011 Amendment Act), the Scheme and the 2009 Amendment Act were further amended to provide a minimum long service leave entitlement for all eligible employees, establish a regime for transition from the Federal industry award-derived long service leave scheme, and rename the Administration Act to its present name. The statutory scheme has not relevantly changed since 2011.
The regime for transition from the Federal industry award-derived LSL scheme (preserved under s 113 of the FW Act in respect of award employees) also extended the scheme’s operation to non-award employees by Sch 2 of the 2009 Amendment Act to the new statutory LSL scheme established by the 2011 Amendment Act.
Additionally, the 2011 Amendment Act provided greater powers to Coal LSL for the purposes of ensuring compliance with the scheme. These powers included the power to require persons to produce information or documents and standing to pursue alleged contraventions of a civil penalty provision on behalf of the Commonwealth (explained further below).
The 2011 Amendment Act also renamed the Administration Act to its present name (the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth)).
Relevant legislative provisions
Entitlements to long service leave are prescribed under Pt 5A of the Administration Act. These entitlements are based on aggregate “qualifying service” as an “eligible employee” (s 39A(2) of the Administration Act).
Periods of unauthorised absence and certain periods of “unpaid leave” or “unpaid unauthorised absence” are excluded for the determination of qualifying service (s 39A(2) of the Administration Act). The service does not need to be continuous but may be aggregated in one or more period(s), with the long service leave entitlement arising based on cumulative service of 8 years, except if a break between periods of qualifying service is for a continuous period of 8 years of more (s 39A(4) of the Administration Act). Section 39A provides:
Part 5A—Entitlement to long service leave
Division 1—Entitlement, amount and grant etc.
39A Entitlement to long service leave
General rule
(1) If an eligible employee completes a period of qualifying service that is, or periods of qualifying service that add up to, at least 8 years, the employee is entitled to long service leave under this Part in respect of that period, or those periods, of qualifying service.
Meaning of qualifying service
(2) A period of qualifying service by an employee is a period during which the employee is an eligible employee of one or more employers, but does not include any of the following:
(a) a period of unauthorised absence;
(b) a period of unpaid leave or unpaid authorised absence, other than:
(i) a period of absence under Division 8 of Part 2‑2 of the Fair Work Act 2009 (which deals with community service leave); or
(ii) a period of stand down under Part 3‑5 of the Fair Work Act 2009, under an enterprise agreement that applies (within the meaning of that Act) to the employee, or under the employee’s contract of employment; or
(iii) a period during which the employee is absent from work because of a personal illness, or a personal injury, for which the employee is receiving compensation under a law of the Commonwealth, a State or a Territory that is about workers’ compensation or under an industrial instrument; or
(iv) a period of leave or absence of a kind prescribed by the regulations for the purposes of this paragraph;
(c) if the employee ceases to be an eligible employee for a continuous period (a break period) of 8 years or more—any period before the break period during which the employee was an eligible employee;
(d) any period during which a waiver agreement is in effect between the employee and an employer;
(e) any other period of a kind prescribed by the regulations for the purposes of this paragraph.
(3) For the purposes of subsection (2), if a casual employee is an eligible employee at any time during a week, the employee is taken to have been an eligible employee for the whole week.
Effect of break period once entitled to long service leave
(4) If:
(a) an employee ceases to be an eligible employee for a continuous period of 8 years or more; and
(b) at the time of so ceasing, the employee is entitled to long service leave under subsection (1) in respect of a period, or periods, of qualifying service (the employee’s previous qualifying service); and
(c) the employee becomes an eligible employee again;
paragraph (2)(c) does not apply in respect of the employee’s previous qualifying service.
(Emphasis in orginal.)
An eligible employee is entitled to 13 weeks leave for each 8 years of aggregate “qualifying service” in the black coal mining industry (ss 39A and 39AA of the Administration Act). The entitlement to leave is calculated in hours based on the working hours of the employee (s 39AA(2) of the Administration Act). Section 39AA provides:
39AA Amount of long service leave
(1)The number of hours of long service leave that an eligible employee is entitled to for a week of qualifying service completed by the employee is worked out using the formula in subsection (2).
(2) The formula is:
where:
working hours means:
(a) if the employee is a full‑time employee at all times during the week—35 hours; or
(b) if the employee is a part‑time employee at any time during the week—the lesser of the following amounts (or either of them if they are equal):
(i) the total number of ordinary hours of work of the employee as a part‑time employee for the week;
(ii) 35 hours; or
(c) if the employee is a casual employee at any time during the week and paragraph (b) does not apply—the lesser of the following amounts (or either of them if they are equal):
(i) the total number of hours worked by the employee as a casual employee during the week;
(ii) 35 hours.
(Emphasis in original.)
Employees may apply for, and employers are required to grant, long service leave (subject to providing a written response if it is not to be granted) (s 39AB of the Administration Act). The leave must be taken in spells of no less than 14 days (s 39AB(2) of the Administration Act). An employee who takes long service leave is to be paid by their current employer for the period of long service leave taken (s 39AC of the Administration Act). The payment for the period of leave is equal to the base rate of pay, plus incentive-based payments and bonuses, that would have been payable during the period if the person was not on leave (s 39AC of the Administration Act).
The qualifying service and leave entitlements (which are recorded as “LSL credits”) of the eligible employee are recorded by the applicant (ss 7(da) and 39AB(5) of the Administration Act).
Section 39AB of the Administration Act provides:
39AB Grant of long service leave
(1) An eligible employee may apply, in writing, to his or her employer to take a period of long service leave.
(2) The employee may only apply to take a period of long service leave that:
(a) is a single continuous period of at least 14 days (being equivalent to a number of hours of long service leave as agreed with the employer); and
(b) does not exceed the employee’s LSL credit at the time the leave is to be taken.
Note: An employee is taken not to be on long service leave on public holidays and during certain other periods of absence (see section 39AE).
(3) As soon as practicable, but no later than 14 days after the application is made, the employer must give the employee a written response:
(a) stating whether or not the employer grants the long service leave; and
(b) if the employer refuses to grant the long service leave—giving details of the reasons for the refusal.
Civil penalty: 60 penalty units.
(4) The employer may refuse to grant long service leave only on reasonable business grounds.
Civil penalty: 60 penalty units.
Meaning of LSL credit
(5) For the purposes of this section, the long service leave credit (LSL credit) of an eligible employee on a day (the calculation day) is the number of hours worked out as follows:
(a) first, add together the number of hours of long service leave that the employee is entitled to under section 39AA for each week of qualifying service completed by the employee before the calculation day;
(b) then, subtract the number of hours of long service leave (if any) previously granted to the employee under this section.
Note 1: The number of hours of long service leave that an employee is entitled to in respect of certain qualifying service may be affected by section 39CE.
Note 2:Division 4 of this Part provides other remedies for contraventions of civil penalty provisions.
(Emphasis in original.)
Employees may also be paid for long service leave if they cease to be an “eligible employee”, that is they are no longer employed in the black coal mining industry (s 39C of the Administration Act), and also in circumstances of ill health and retirement, redundancy, and death if relevant requirements are met (ss 39CA, 39CB and 39CC of the Administration Act).
An employer of an eligible employee, who grants leave and makes a payment for that leave, is reimbursed from the Fund for the payment (s 44 of the Administration Act). The reimbursement is made for the amount of long service leave hours (LSL credits) at the amount of eligible wages per hour, that is taken (cl 9 Employer Reimbursement Rules 2017 (Cth)). The calculation of eligible wages per hour is done by considering those hours the eligible employee received immediately before taking the leave, or if no longer employed then the amount immediately before the person left the employment (cl 9(1) Reimbursement Rules).
Accordingly, while an employer contributes a levy based on eligible wages for each month the eligible employee is employed, they will be reimbursed at the rate for the eligible wages at the time they are taken. The Fund is “pooled”, however the quantum of levy that an employer may have contributed for a particular eligible employee is not the same as the quantum of reimbursement that is made to the employer that grants and pays the leave. The amounts of levy contributed and the amounts which are reimbursed do not correspond.
The entitlements to long service leave under the Administration Act operate as “safety net” employment entitlements. The entitlements operate to the exclusion of provisions of the FW Act and State and Territory laws that deal with long service leave (ss 39E and 39EA of the Administration Act). Employees and employers may, however, agree to more generous entitlements under an industrial instrument (such as a modern award or enterprise agreement made under the FW Act) (s 39EB of the Administration Act). Sections 39E and 39EA provide:
Division 5—Relationship with other laws and industrial instruments
39E Relationship with the National Employment Standards
Despite section 61 of the Fair Work Act 2009, this Part applies in relation to eligible employees and their employers to the exclusion of Division 9 of Part 2‑2 of that Act.
39EA Relationship with State and Territory long service leave laws
This Part applies in relation to eligible employees and their employers to the exclusion of a State or Territory law that deals with long service leave.
(Emphasis in original.)
The imposition of the levy
Employers of “eligible employees” have a separate obligation to pay a levy under s 4 of the Levy Act, which the applicant submitted is “symbiotic with the obligation to grant and pay leave”:
4 Imposition of levy
Levy is imposed on eligible wages paid to eligible employees after the commencement of this Act.
The rate of the levy is prescribed as a percentage of the ‘eligible wages paid’, currently 2%: s 5 of the Levy Act; reg 6 of the Coal Mining Industry (Long Service Leave) Payroll Levy Regulations 2018 (Cth).
Importantly, liability for the levy rests with the “person who paid those wages”: s 6 of the Levy Act.
The Collection Act provides for the due date of payment of the levy and that an additional levy is payable by way of penalty if an amount of levy is not paid:
4 Due date for payment
Subject to section 6, levy in respect of eligible wages paid to eligible employees for their employment during a month is payable at the end of the period within which a return is required by this Act to be made in respect of that month.
…
7 Additional levy
(1) If any levy remains unpaid on any day after the time when it became payable, or would apart from section 6 have become payable, additional levy is payable by way of penalty by the person liable to pay the levy, at the percentage applicable under subsection (2) in respect of that day, on the amount unpaid, computed from that time or, if under section 6 the Corporation has granted an extension of time for payment of the levy or has permitted payment of the levy to be made by instalments, from such date as the Corporation determines, not being a date before the date on which the levy was originally payable.
(2) The percentage applicable in respect of a day is 2 percentage points above the maximum indicator interest rate for that day, where:
maximum indicator interest rate, in relation to a day, means the higher or the highest, as the case may be, of the range of rates of interest per annum current on that day quoted by the Reserve Bank, on the basis of reports by each bank regarded by the Reserve Bank as a major trading bank operating in Australia, in respect of overdrafts of $100,000 or more.
(3) If judgment is given by, or entered in, a court for payment of:
(a) an amount of levy; or
(b) an amount that includes an amount of levy;
then:
(c) the levy is not taken, for the purposes of subsection (1), to have ceased to be payable merely because of the giving or entering of the judgment; and
(d) if the judgment debt carries interest, the additional levy that would, apart from this paragraph, be payable under this section in relation to the levy is, by force of this paragraph, reduced by:
(i) in a case to which paragraph (a) applies—the amount of the interest; or
(ii) in a case to which paragraph (b) applies—the amount worked out in accordance with the formula:
(4) In this section:
bank includes, but is not limited to, a body corporate that is an ADI (authorised deposit‑taking institution) for the purposes of the Banking Act 1959.
(Emphasis in original.)
For the purpose of determining the “eligible wages” of the “eligible employee” for which the levy is payable, the “eligible wages” comprise:
(a)For non-casual employees paid a base rate of pay (which has the same meaning as under the FW Act: s 3 of the Collection Act), the greater of:
(i)the “base rate of pay” including incentive-based payments and bonuses; or
(ii)75% of the base rate of pay including incentive-based payments, bonuses, overtime and penalty rates and allowances (other than those for reimbursement of expenses) (s 3B(1) of the Collection Act);
(b)For non-casual employees paid an annual salary, the annual salary including incentive-based payments and bonuses, but excluding overtime, penalty rates and shift-loadings (s 3B(2) of the Collection Act); or
(c)For casual employees, the base rate of pay including incentive-based payments and bonuses (s 3B(3) of the Collection Act).
Section 9 of the Collection Act provides that the levy is a debt due to the Commonwealth:
9 Recovery of levy or additional levy
(1) An amount of levy, or an amount of additional levy under section 7, is a debt due to the Commonwealth, and payable:
(a) if the Corporation has given written notice to the person who is liable to pay the amount that a person specified in the notice is authorised, in lieu of the Corporation, to receive such an amount—to the specified person in such manner as is prescribed by the regulations or, if there are no such regulations, as that person directs; or
(b) otherwise—to the Corporation in such manner as is prescribed by the regulations or, if there are no such regulations, as the Board directs.
(2) An amount of levy, or an amount of additional levy under section 7, that is payable but has not been paid may be sued for and recovered by the Corporation or by the other person (if any) to whom the amount is payable, as the case may be, in any court of competent jurisdiction.
(3) The annual report prepared by the Board and given to the Minister under section 46 of the Public Governance, Performance and Accountability Act 2013 for a period must include particulars of:
(a) any amounts paid to, or recovered by, the Corporation or another person under this section during the period; and
(b) any proceedings brought by the Corporation to recover an amount under subsection (2) during the period.
(Emphasis in original.)
In addition to the payment of the levy, employers of eligible employees must submit “returns”, and also annual audited reports to the applicant, confirming that the levy has been paid, pursuant to ss 5 and 10 of the Collection Act:
5 Returns by employers
(1) A person who employs an eligible employee at any time during a month must, within 28 days after the end of that month, make a return in accordance with subsection (2) in respect of that month.
Civil penalty: 40 penalty units.
(2) A return for the purposes of this section:
(a) must be made:
(i) if the Corporation has given written notice to the person who is required to make the return that a person specified in the notice is authorised, in lieu of the Corporation, to receive returns under this section—to the specified person in such manner as is prescribed by the regulations or, if there are no such regulations, as that person directs; or
(ii) otherwise—to the Corporation in such manner as is prescribed by the regulations or, if there are no such regulations, as the Board directs; and
(b) must be in accordance with a form approved by the Board; and
(c) must contain such information as is required by that form.
(3) A person commits an offence of strict liability if the person contravenes subsection (1).
Penalty: 30 penalty units.
Note 1: For offences of strict liability, see section 6.1 of the Criminal Code.
Note 2: For the physical elements of this offence, see subsection 3A(2) of this Act.
…
10 Requirement to give report to Corporation
(1) If a person employs an eligible employee at any time during a financial year, the person must, no later than 6 months after the end of the financial year, give to the Corporation a report prepared by an auditor that:
(a) states whether, in the opinion of the auditor, the person has paid all amounts of levy, or amounts of additional levy under section 7, that the person was required to pay in respect of the financial year; and
(b) if, in the opinion of the auditor, the person has not paid all amounts of such levy or additional levy—specifies in what respect and to what extent, in the opinion of the auditor, the person has not paid those amounts; and
(c) if, during the financial year, the person was paid an amount under Part 7 of the Administration Act—states whether, in the opinion of the auditor, the amount paid is correct; and
(d) includes reasons for the opinions contained in the report.
Civil penalty: 40 penalty units.
(2) A person commits an offence of strict liability if the person contravenes subsection (1).
Penalty: 30 penalty units.
Note 1: For offences of strict liability, see section 6.1 of the Criminal Code.
Note 2:For the physical elements of this offence, see subsection 3A(2) of this Act.
When an employer makes a payment of long service leave under Pt 5A of the Administration Act to an employee, the employer is entitled to reimbursement from the applicant of the payment made in respect of the long service leave in accordance with the Reimbursement Rules. The basis for this reimbursement can be found in s 44 of the Administration Act and rr 8 to 10 of the Reimbursement Rules, which are extracted as follows:
[Administration Act]
44 Reimbursement for payments relating to long service leave
(1) If an employer makes a payment under Part 5A to a person who is or was an eligible employee, the Corporation must pay the employer out of the Fund the reimbursable amount the Board decides in accordance with the Employer Reimbursement Rules.
(2) If an employer makes a payment under Part 5A to the legal personal representative of a deceased person who is or was an eligible employee, the Corporation must pay the employer out of the Fund the reimbursable amount the Board decides in accordance with the Employer Reimbursement Rules.
Note: Section 52B provides that an application may be made to the Administrative Appeals Tribunal for review of a decision of the Board under subsection (1) or (2).
…
[Reimbursement Rules]
8 How does the Board decide the reimbursable amount for an employer?
(1) If the Corporation receives a claim from an employer for reimbursement under section 44 of the Act after the commencement of these Rules, the Board must decide the amount the employer is to be reimbursed by calculating that amount in accordance with:
(a) if the employer made a payment under Part 5A of the Act to an eligible employee – Rule 9 of these Rules; or
(b) if the employer made a payment under Part 5A of the Act to an eligible employee’s legal personal representative. – Rule 10 of these Rules.
(2) The Board is not required to deal separately with any part of a claim that relates to pre-2012 entitlements and any part of a claim relating to post-2012 entitlements.
9How is the reimbursable amount for a payment to an eligible employee calculated?
(1) 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
where:
LSL paidmeans 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 hourmeans 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.
(2) If the amount calculated under subrule (1) is more than the amount actually paid to the eligible employee in respect of the employee’s long service leave entitlement, the reimbursable amountis taken to be the amount paid to the eligible employee.
10How is the reimbursable amount for a payment to a legal personal representative calculated?
The reimbursable amount for an employer in respect of a payment made by the employer to an eligible employee's legal personal representative under either section 39C or 39CC of the Act is the amount that would have been the reimbursable amount for the employer if the payment had been made to the eligible employee under Rule 9.
(Emphasis in original.)
The evidence
The respondent’s evidence
Mr Stephen Smith, Head of National Workplace Relations Policy for the Australian Industry Group, gave evidence regarding the negotiation and drafting history of the Award. In particular, he made reference to the opposition by the Ai Group and various unions to the inclusion in the Award coverage provision of, inter alia, maintenance and repair service contractors. Mr Smith referred to the comments made by the Full Bench with respect to the proposed Black Coal Award, in the Priority Stage Award Modernisation Decision [2008] AIRCFB 1000 at [156]–[157] that the “goal and intent [of the award]…should neither expand nor contract the reach of the key pre-reform awards both in relation to the kinds of employers to whom those awards apply and the extent to which the awards apply to such employers.” The Full Bench stated that they rejected “submissions that sought to have mechanical and electrical contractors invariably covered by awards other than the modern award for the black coal mining industry”. Paragraphs [156]–[157] were as follows:
156. We have, at this stage, acceded to the main submissions of the CFMEU and the CMIEG in relation to the coverage clause in the exposure draft and have generally reverted to the form of words in the draft clause agreed by the main coal industry parties. We note that the stated goal of the CFMEU and the CMIEG was to achieve a coverage clause that as closely as possible reflects the status quo in terms of the existing application of the key federal pre-reform awards both in relation to the kinds of employers to whom those awards apply and the extent to which the awards apply to such employers. We agree with that goal and intend that the award we have made should neither expand nor contract the reach of the key pre-reform awards both in relation to the kinds of employers to whom those awards apply and the extent to which the awards apply to such employers. It follows that we reject submissions that sought to have mechanical and electrical contractors invariably covered by awards other than the modern award for the black coal mining industry.
157. However, we are concerned that the clause as drafted is not simple to understand nor easy to apply. In particular, contractors who perform some work at or about coal mines may have difficulty in determining whether the award covers them. We acknowledge that significant attempts were made by the parties to agree on a form of words that described the industry in a clear and direct way. We intend to vary cl.4 before the award commences so that it contains a clearer description of the black coal mining industry albeit a description that reflects as closely as possible the status quo. We recognise that the difficulties in developing such a description are substantial and that this should not be done without further consultation with interested parties.
(Emphasis added.)
Despite the Australian Industrial Relations Commission recognising the need for greater clarity in the definition, no further refinement was made to the clause before the Award was made. What is telling from this extracted reasoning is that the Commission recognised, contrary to the submission of the Ai Group and others, that contractors performing “some work at or about coal mines” will be covered by the Award and did not engage directly, nor in the terms of the coverage clause define, clear boundaries which would exclude maintenance and repair contractors.
Mr Smith referred to attempts thereafter, to achieve greater clarity by the inclusion of the revised Note which the Commission made in its decision The Australian Industry Group [2012] FWA 9606, which is extracted as follows:
“NOTE: The coverage clause is intended to reflect the status quo which existed under key pre-modern awards in relation to the kinds of employers and employees to whom those awards applied and the extent to which the awards applied to such employers and employees.
An example of the types of issues and some of the case law to be considered when addressing coverage matters can be found in Australian Collieries Staff Association and Queensland Coal Owners Association – No. 20 of 1980, 22 February 1982 {Print CR2297} and in the Court decisions cited in this decision.”
However, I would observe that the Full Bench of the Commission did not, despite the urging of Mr Smith’s clients and others, narrow the definition of “black coal mining industry” such as to exclude “mechanical and electrical contractors” and specifically “rejected that submission” (as extracted at [49] above). To the extent that there was a “note” inserted later, it did not provide the “clarity” of the kind that the respondent now urges.
Mr Moledo, who has been employed by Hitachi for at least 14.5 years and currently holds the position of Director – Product Support of Hitachi, gave evidence as to the nature of Hitachi’s business and described it in the following terms:
(a)Hitachi’s business comprises the supply of “new and used earthmoving and materials handling equipment, and after-sales maintenance support, to customers in a wide range of industries” including inter alia various mining industries (not only the black coal mining industry). None of Hitachi’s branches sell or support machinery exclusively for one industry nor is any branch or workshop located on a mining lease. However, the revenue contribution differs between regions and branches due to the differing prevalence of various industries.
(b)All employees, save for some back office administrative staff, are employed by Hitachi.
(c)Hitachi’s enterprise is operated through company-owned branches, grouped geographically by regions, not by industries (see below at [242]).
(d)The branches are retail outlets which sell Hitachi machines and provide spare parts. Many branches have workshops attached where repair and maintenance services on those machines are provided.
(e)The “vast majority” of Hitachi’s contracts are for the sale of equipment and the supply of spare parts and only some are for service and maintenance.
(f)Hitachi holds three active “Mining related Maintenance and Repair Contracts (MARCs)” nationally, two related to the Liddell Mine and one related to the Boddington Mine. The MARCs provide that Hitachi bills customers on an agreed rate per the hours each machine is used, which covers servicing and schedule repairs, represented as invoiced contract revenue that is held in a central provision account. When service or repair work is required and performed, the relevant branch closes a work order which is then expensed to the provision account. This expense includes costs for labour, parts and other expenses.
(g) the branch expenses to the provision account, including labour, parts and other costs.
(h)Alongside its branch structure, Hitachi operates a centralised Construction Equipment Sales Division and a Mining Sales Division within its head office. The divisions are responsible for purchasing and pricing machinery, and liaising with manufacturing facilities. Hitachi also operates remanufacturing facilities at Muswellbrook, Perth and Brisbane, where parts and components are refurbished to particular specifications.
The respondent also relies on evidence of its revenue in the period of the financial years ending 31 March 2020, 2021 and 2022, and in particular Mr Moledo’s evidence that the sale of labour services to the black coal mining industry was only 2.6% of its total sales revenue during that 3 year period.
Under cross-examination, Mr Moledo accepted:
(a)that the predominant customers of the Muswellbrook Branch were in the black coal mining industry;
(b)that the Muswellbrook Branch services two large contracts, amongst others, called MARCs, directed to the Liddell mine;
(c)the vast majority of contracts entered into by the respondent, serviced by the Muswellbrook Branch, were for the provision of equipment and services to the black coal mining industry;
(d)the majority of the revenue generated out of the Muswellbrook Branch was from the black coal mining industry;
(e)labour needed to be available to work to a roster dictated by the client maintenance schedule; and
(f)the Muswellbrook Branch needed to employ and retain labour of a sufficient quantity to enable the Muswellbrook Branch to attend to its obligations under the contract.
Mr Gleeson, who has been employed by Hitachi for at least 10 years, currently holds the position of Regional General Manager – Eastern and was previously the Muswellbrook Branch Manager, gave evidence on Hitachi’s business in the Eastern region (which includes the Muswellbrook Branch). He described how Hitachi supplies machinery under both the Hitachi and Bell brands. He then described the Eastern region’s revenue from 1 April 2021 to 31 March 2022 which comprised sale of construction ($41.4 million) and mining machinery ($21.4 million), service revenue ($109.5 million) including $34.4 million from the Muswellbrook Branch’s MARCs.
Mr Trench, who has been employed by Hitachi for at least 10 years and currently holds the position of Service Manager of the Muswellbrook Branch, gave evidence in particular about the proportion of Hitachi’s business that comprises the Muswellbrook Branch (which is the only branch Mr Trench has ever worked at). He described the nature of the Muswellbrook Branch in the following way:
(a)The Muswellbrook Branch supplies Hitachi machinery and spare parts to customers in the Hunter Valley and surrounding areas (including parts of western New South Wales), and provides maintenance on that machinery.
(b)Most of the Muswellbrook Branch’s customers are in the black coal mining industry, however it also supplies and services equipment to customers in the construction, rail, agricultural, plant hire, power and other industries. Insofar as Hitachi’s machinery is used on black coal mine sites, it is only used on open cut mines. Hitachi employees do not go underground in coal mines.
(c)There is a remanufacturing facility located on the same premises as the Muswellbrook Branch but it operates separately.
Both Mr Gleeson and Mr Trench gave evidence specifically regarding the relevant employees’ circumstances and responded to their evidence. This evidence is dealt with further below.
The applicant’s evidence
Mr Trent Sebbens, solicitor for the applicant, gave uncontested affidavit evidence regarding:
(a)online search results regarding how the respondent described its business, and particularly the mining portion of its business;
(b)the applicant’s issuing of a statutory Notice to Produce under s 52A of the Administration Act to the respondent and annexing documents produced by the respondent including an organisational chart and four MARCs; and
(c)the evidence of Mr Smith and in response, identified those Federal awards that had applied before the making of the Award as part of the award modernisation process.
Notably, his evidence extracted portions of the earlier coal mining awards which identified employees who were direct respondents in those awards (as they were then required to be) including contractors and service providers.
The remainder of the applicant’s evidence comprised the evidence of each of the relevant employees, which is summarised as follows.
Mr Benjamin Garland
Mr Garland is a Plant Mechanic who was employed by the respondent for over 10 years from May 2010 to December 2020. During his employment, his terms and conditions were covered by an employment contract (dated 16 April 2010) and a number of enterprise agreements.
Mr Garland identified “five distinct periods” in which he worked for the respondent in the following terms:
(a) for approximately six weeks after commencing employment, until about mid-June 2010, I performed work as a Plant Mechanic at Hitachi’s Muswellbrook branch workshop, located at 27-35 Thomas Mitchell Drive, Muswellbrook, New South Wales (Branch Workshop) (Period One);
(b) from about mid-June 2010 until about November 2013, I worked as a Plant Mechanic as part of a “field services” roster at a number of black coal mines in and around the Hunter Valley region of New South Wales (Period Two), see for example, the role recorded in the copy of a Hitachi organisational chart as at 1 July 2010 at Tab 6 of Exhibit BPG-1;
(c) from about November 2013 until about February 2014, I worked as a Plant Mechanic at the Liddell mine (Period Three);
(d) from about February 2014 until about November 2017, I primarily worked as a shift supervisor at the Liddell mine (Period Four); and
(e) from late around 2018 or early 2018 until my employment with Hitachi ended in about December 2020, I returned to working as a Plant Mechanic as part of a “field services” roster at a number of black coal mines in and around the Hunter Valley region of New South Wales (Period Five).
(Emphasis in original.)
During Period Two, Mr Garland repaired and maintained mining equipment at a range of black coal mine sites in and around the Hunter Valley region. All work was performed at these sites, save for approximately 1 to 2 shifts per month where no work was required to be performed at a mine site. Mr Garland would only attend the Muswellbrook Branch workshop, to drop off paper work, for safety training purposes and to occasionally collect parts for the machines requiring repair on the mine sites. Mr Garland worked the same shifts as the employees on the relevant mine site. During Period Three, Mr Garland was assigned by the respondent to work at the Liddell black coal mine site and performed the same kind of work as he had performed in Period Two. During Period Four, Mr Garland undertook work as a Shift Coordinator at Liddell, initially allocated to supervise shutdowns and later for the breakdown crew. Whilst his role primarily involved supervision, he did also, on occasion, undertake repair work himself. The work was undertaken on MARC machinery and usually performed at the main workshop on the Liddell mine site. At other times the work was performed “in the field at the mine site or in the mine pit itself”. During Period Five, Mr Garland returned to a “field service role” as a Plant Mechanic, where the work was substantially the same as to that during Period Two.
To the extent that his evidence was the subject of challenge (by the respondent through affidavit evidence and where Mr Garland was not required for cross-examination), it was: (a) regarding whether, during Period Two, he was employed as a “Shift Supervisor” or undertook “Shift Coordinator” work and remained employed as a mechanical fitter throughout his employment (nothing turns on this dispute); (b) whilst during Period Two, Mr Garland “worked predominantly at black coal mines”, according to Mr Trench, his job was to perform services for any customers in any industries and at any location to which Hitachi directed him”. According to Mr Trench: “The very same mechanical fitter employed under essentially the same contract and position description to perform exactly the same role in a Field Services team in Western Australia, would probably never set foot on a black coal mine site”; (c) a dispute about whether Mr Garland reported to mine site supervisors in addition to Hitachi supervisors (about which it does not appear ultimately that anything arises); and (d) a dispute as to whether Mr Garland performed “supplementary labour” on mine sites (again nothing turns on it).
Mr Brenton Gee
Mr Gee was employed as a “Field Services Roster Fitter” with the respondent from January 2011 to November 2019. He described his work in the following way (which was unchallenged):
During the time that I worked for Hitachi, I was one of a number of employees of Hitachi who primarily worked on black coal mine sites in and around the Hunter Valley region of New South Wales, to perform or supervise maintenance and repair work on equipment such as excavators, trucks and bulldozers at those mines (being equipment which comprised both Hitachi equipment supplied to those mines, as well as other non-Hitachi equipment at those mines). These persons who worked primarily on black coal mine sites included both Hitachi employees who were based solely at a specific black coal mine, as well as Hitachi employees who formed part of “field service” rosters, whereby they travelled to different black coal mine sites for each roster at the direction of Hitachi management.
From about 18 January 2011, Mr Gee performed his duties as a “mechanic” at the Liddell mine site save for short periods at the Branch Workshop and a period of seven months when he worked at the Glendell mine site. At the Liddell mine site, Mr Gee worked in the main maintenance workshop alongside Liddell maintenance crew employees and also performed breakdown duties in the pit. There were three offices for Hitachi employees annexed to the main workshop for the Hitachi Site Manager, Hitachi Team Leader and the Supervisor.
There was limited dispute with respect to Mr Gee’s evidence, save by Mr Trench’s affidavit evidence, who disputed amongst other things: (a) whether Mr Gee was “supervised” by the Liddell Maintenance Supervisor (rather than the respondent’s supervisors); (b) the extent to which he was required to repair machinery and equipment other than that which was supplied by the respondent; (c) the extent to which he used Liddell’s tools rather than those of the respondent; (d) the extent to which the client determined what work to be performed under the MARC.
Mr Gee was not required for cross-examination.
Mr Bradley Stair
Mr Stair has been employed by the respondent since March 2014 as a High Voltage Electrician. For the first month of his employment, he worked at the Branch Workshop, but thereafter only worked there on a small number of occasions each year, usually to attend safety-related presentations by the respondent. From April 2014, Mr Stair worked at the Liddell mine site performing high-voltage electrician work and his role was to perform the high voltage electrician work on the MARC Machinery at the Liddell site. From September 2019 onwards he also worked as a Team Leader supervising the work of crew members, assessing parts required to undertake work, ordering parts, and assessing whether particular work needed to be carried out on machinery. He described simply the three types of work performed by the respondent’s employees at the Liddell site being “servicing work” according to the servicing schedule, “breakdown work” performed on an as-needed basis and often carried out in the mining pit and “shutdown work”: After each 20,000 hours of use, the Hitachi dump trucks are placed in a “shut down” period during which components are replaced.
There was limited dispute with respect to his evidence from the respondent and he was not required for cross-examination.
Mr Graeme Cooper
From April 2010 until December 2020, Mr Cooper was employed by the respondent as a mechanical fitter. For approximately three weeks when Mr Cooper was first engaged by the respondent, he attended the Branch workshop. He thereafter predominantly worked as a mechanical fitter under the “field services” roster at a number of black coal mines in the Hunter Valley region, most frequently at the Liddell and Glendell mine sites.
He described the nature of his work in the following way:
The nature of the work I was required to perform varied from shift to shift, but broadly I was assigned to perform work of three types at black coal mine sites, being:
(a)assembly of new Hitachi machinery at the mine site to the original equipment manufacturer (OEM) specification (assembly work). I estimate that this comprised approximately 10% of my work;
(b)“rebuilds” of Hitachi machinery, and particularly dump trucks and excavators (rebuild work) that were located on mine sites. I estimate that this comprised approximately 40% of my work; and
(c)general maintenance, servicing and repair work as supplementary or role-replacement labour for the maintenance work teams at different mine sites. I estimate that this comprised approximately 50% of my work.
(Emphasis in original.)
There was limited dispute with respect to his evidence from the respondent and he also was not required for cross-examination.
Common contractual terms
A review of each of the relevant employees’ contracts reveals that they are largely identical, with the exception of Mr Stair’s contract which differs from the others in ways which are identified below.
The relevant employees’ contracts comprise the following: Their “Position” title is identified, with respect to each employee:
(a)Mr Garland, as “Roster Mechanical Fitter”;
(b)Mr Gee, as “Field Service Roster Fitter 1”;
(c)Mr Stair, as “High Voltage Electrician”; and
(d)Mr Cooper, as “Roster Mechanical Fitter”.
Whilst the Position title is identified (and different in each contract as identified in the preceding paragraph), no specific description is given for any of the Positions, save for the Position Description. Each contract provided as follows:
Your position is [XX]. You will be employed on a full time basis.
Your employment is subject to provision of proof of eligibility to work in Australia. You are required to provide proof of eligibility on commencement of employment by way of visa, passport, or birth or citizenship certificate.
Your current duties and responsibilities are contained in the Position Description in Schedule A, attached to this contract. You are also required to carry out other duties reasonably required by the Company that you are skilled and capable of performing. You may also be required to perform duties from time to time for the Company’s Related Entities.
The Company may alter your position, Position Description and responsibility in accordance with the needs of the business. You agree that the terms of this contract continue to apply unless varied in writing in accordance with this contract.
(Emphasis in original.)
Each of the employees was required to report to the Field Service Supervisor (save for Mr Stair who was required to report to the Project Manager).
The contracts of Messrs Gee, Garland and Cooper identified the “place of work” to be “27-29 Thomas Mitchell Dr, Muswellbrook NSW 2333”, described by each employee as the “Branch workshop” not the black coal mine sites where they in fact worked. Mr Stair’s contract identifies a different address (“27-35 Thomas Mitchell Drive, Muswellbrook NSW 2333”) as his “place of work”. Further each contract provides that the employees could be required “to work at other locations in accordance with the needs of the business” and employees “may be required to undertake intrastate, interstate or overseas travel” in the course of their employment.
Mr Stair’s contract also differs from the contracts of the other relevant employees in the following ways:
(a)Mr Stair’s probationary period is for 6 months, whilst the other relevant employees’ period of probation was 3 months. Further, Mr Stair’s contract omits the phrase (included in the other contracts) “[n]ormal qualifying period as legislated still applies”.
(b)Mr Stair’s hourly wage rate was different from that of the other relevant employees. Mr Stair’s wage is paid “with two weeks in arrears”, whilst the other relevant employees’ wages are paid “with one week current wage and one week in advance”.
(c)The “hours” clause in Mr Stair’s contract merely requires him to “be flexible with [his] hours of work patterns to suit either Monday-Friday or different roster arrangements that are in place to meet our business requirements”. However, the other relevant employees are required to work a roster “averaging 42 hours per week over 52 weeks”.
(d)Mr Stair’s “annual leave” clause explicitly excludes Leave Policy HR029 from his contract. This is not the case with the other relevant employees, with their contracts referring to Leave Policy HR029 but not excluding it. Further, Mr Stair’s “annual leave” clause contains a stipulation that requires him to take annual leave in the event that Hitachi has a shut down period, such as over Christmas, whilst the other relevant employees’ contracts do not contain this clause.
The generic “Position Description” is annexed in Schedule A to each contract in identical format. An example of Schedule A from Mr Garland’s contract is extracted as follows:
The following aspects of the Position Description are individualised in each contract: the employee’s name and position number, their position title, their department and the person to whom they report.
The Position Description then describes generically the “Overall Position Purpose” to be “[t]o provide quality diagnostic and general maintenance service for our customers’ equipment in a professional, timely manner…[and] [t]o work with all personnel, in a proactive, constructive and team based approach” and thereafter provides generic “Responsibilities” and “Key Performance Indicator[s]”.
Under the headings “Experience”, “Qualifications” and Customer”, the scant detail was as follows:
Common experience of the employees
As can be seen from the foregoing, each of the employees held different positions and worked at different locations on occasion. For example, Mr Stair was the only employee who worked at the Liddell Mine site for the entirety of his employment with the respondent. Messrs Garland, Gee and Cooper were engaged at a number of black coal mines. Mr Gee worked predominantly at the Liddell Mine apart from a short period at the Glendell Mine and in the Branch Workshop. Mr Cooper was engaged as a “mechanical fitter” on a “field services” roster, most frequently at the Liddell and Glendell mine sites.
The parties do not descend into the detail of the differing circumstances of each of the employees at each of the mine sites in their submissions so as to then suggest that any of them should be treated differently. They are treated as a homogenous group by both parties.
Some of the relevant employees’ evidence is quite detailed and specific as to a particular mine site, for example Mr Stair’s evidence with respect to the Liddell Mine site. However, this evidence has no relevance when determining whether the other relevant employees are “eligible employees” at other mine sites.
The evidence revealed the following common experience of the employees:
(a)save for when they were each initially employed (for a month or so) none of the employees worked at the “Location” identified in their contracts, namely the Branch Workshop;
(b)all the employees worked at either one or a range of black coal mine sites as directed by the respondent from time to time, working out of the site workshop or wherever on the mine site the equipment was located; and
(c)their work involved, depending on their skills and qualification, maintenance and repairs (primarily) of Hitachi equipment on the black coal mine sites.
The relevant employees were involved in three main forms of work performed at the mine sites being servicing, breakdown and shutdown work as identified at [70] and expanded upon below.
Fifthly, I do not accept the respondent’s argument that the levy is akin to a “fee for service”. For a charge to be considered a fee for service, it must be “exacted for particular identified services provided or rendered individually to, or at the request or direction of, the particular person required to make the payment”: see Air Caledonie International v Commonwealth [1988] HCA 61; 165 CLR 462 at 470 (per Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ). There must also be a sufficient relationship between the liability to pay the charge and the provision of services by the ultimate expenditure of the money collected: Northern Suburbs at 568 (per Mason CJ, Deane, Toohey and Gaudron JJ).
The respondent has not identified what the “service” provided is, or that there is a sufficient relationship between the liability to pay the charge and the provision of services by the ultimate expenditure of the money collected. As submitted by the applicant, here there is a collection of a 2.0% levy on eligible wages. Ultimately, some of those funds are used to fund long service leave entitlements to employees, but that is a contingency which may never arise, and even if it does arise, may arise with respect to an employer different to the one that made the contribution, or one who only made a small contribution. In this respect, the applicant relied upon an example:
A simple example can suffice. Hitachi may engage an employee today who already has qualifying service in the industry and then completes his or her aggregate period of service of 8 years while employed with Hitachi. In that instance, if Hitachi today pays that employee for the long service leave, it will be reimbursed irrespective of the fact that it never made any contribution or only made an insignificant contribution to the fund. Equally, the converse also proves the point. Hitachi may have made a contribution in respect of an employee for over 7 years of that person’s employment and yet when the employee becomes entitled to long service leave, that employee may be engaged with a different employer, in respect of which entitlement it obtains no reimbursement for the levy it contributed the fund for 7 years of that person’s service. That is because the trigger for reimbursement is the taking of the leave, and that payment for the leave by the current employer (who is the one that is reimbursed). The point is even more profound once it is accepted that employers may leave or enter the industry with or without any reimbursement. Seen in this way, the levy is not a fee for service, it is a tax imposed on those who decide to engage employees in the black coal mining industry, to promote the public purpose underlying the scheme. This makes it plain that the levy is imposed as an exaction to generate revenue for the public purpose of funding the long service leave of employees, and where applicable, to reimburse those employers who foot the cost of an actual payment to a relevant employee.
For these reasons, it is my view that the levy comprises a tax.
Whether the applicant’s proceedings constitute “an action by the Crown”
In order for the applicant to be exempt from the Limitation Act (if it applied), under s 10(3), requires not only establishing that the levy was a tax but also that these proceedings constitute “an action by the Crown” (which includes an action by a person acting “on behalf of the Crown”: s 10(2)).
The respondent submits that the applicant is not acting on behalf of the Crown within the meaning of s 10(2). For the following reasons, if I had been required to determine this issue, I would reject the respondent’s submissions.
The determination of whether the applicant’s action falls within the exception to the operation of the Limitation Act under s 10(3) involves a consideration of the meaning of the words in the empowering provision, being s 11 of the Collection Act, in its proper statutory context and given its proper performance when read as whole: Independent Commission Against Corruption v Cunneen [2015] HCA 14; 256 CLR 1 at [31] per French CJ, Hayne, Kiefel and Nettle JJ, citing Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [69]–[70] (per McHugh, Gummow, Kirby and Hayne JJ).
The parties each relied upon numerous High Court authorities as to what the “Commonwealth”, the “Crown” and “acting on behalf of the Crown” mean: Hocking v Director-General of the National Archives of Australia [2020] HCA 19; 271 CLR 1; The Commonwealth v Rhind [1966] HCA 83; 119 CLR 584; Commonwealth v Mewett [1997] HCA 29; 191 CLR 471; Sue v Hill [1999] HCA 30; 199 CLR 462; Superannuation Fund Investment Trust v Commissioner of Stamps (SA) [1979] HCA 34; 145 CLR 330; Launceston Corporation v Hydro-Electric Commission [1959] HCA 12; 100 CLR 654 (City of Launceston); Maguire v Simpson.
These authorities each describe the various meanings attributed to these terms within constitutional theory and case law over time. The respondent relied heavily on Sue v Hill and City of Launceston. However, these authorities do no more than describe the variety of meanings which may apply. For example, as acknowledged by the respondent, when referring to Sue v Hill at [83]–[94], the High Court recognised the various meanings attributed to the Crown in constitutional theory: The Crown is identified, inter alia, as “the body politic” (at [84]), the “international personality of a body politic” (at [85]) and the “executive” government (distinct from the legislature): at [87]. Further, as demonstrated in the reasoning in City of Launceston, the determination that the statutory authority was not a servant of the Crown arose from a consideration of the body’s governing Act as a whole (at 660). Further, the determination of whether a statutory corporation or other instrumentality of the Crown or the Commonwealth is entitled to “Crown immunity”, and that in order to do so it must be an agent of the Crown, is not of assistance in the construction of s 10(3) of the Limitation Act.
In any event, as submitted by the applicant, the facts of City of Launceston were distinguishable. There, the question was whether the Hydro-Electricity Commission was exempt from liability for rent because it occupied the land on behalf of her Majesty, that is when it entered into the relevant lease and occupied it, it was doing so on behalf of her Majesty (at 660). There, the High Court reasoned that the Hydro-Electricity Commission was entering the lease in its own capacity.
For the reasons which follow, I accept when one considers s 11 of the Collection Act in its legislative context it was not collecting the levy in its own capacity.
Functions, powers and features of the applicant
The applicant is a body corporate: s 6(2)(a) of the Administration Act. It has a Board of Directors, who are to manage its affairs and the Fund: ss 9 and 10 of the Administration Act.
It is subject to the requirements in the Public Governance, Performance and Accountability Act 2013 (Cth) (PGPA Act) (excepting s 59, dealing with investments by corporate Commonwealth entities: s 39 of the Administration Act).
As part of its functions, the applicant is required to provide certain reports and information to the responsible Minister (being presently the Minister for Industrial Relations), including a report under s 46 of the PGPA Act (s 9(3) of the Collection Act), keep the Minister informed of levy collected (s 7 of the Administration Act) and notify and make recommendations to the Minister about the sufficiency of the Fund: s 43(5)–(6) of the Administration Act.
Under s 7 of the Administration Act, its functions are described to comprise the following:
(a)to establish and maintain the Fund; and
(b)to make payments into and out of the Fund, and invest the Fund, in accordance with this Act and the Payroll Levy Collection Act; and
(c)to advise the Minister as to the rates of payroll levy that should be imposed on employers; and
(d)to monitor payments of the payroll levy and keep the Minister informed of any failure by an employer to pay the payroll levy; and
(da)to maintain records relating to:
(i) the employment of eligible employees;
(ii) the qualifying service completed by, and the long service leave entitlements of, eligible employees; and
(iii) employers of eligible employees; and
(iv) amounts that are, or may become, payable to employers under Part 7; and
(e) to advise the Minister generally on the operation of this Act, the Payroll Levy Act and the Payroll Levy Collection Act; and
(f)such other functions as are conferred on the Corporation by the Payroll Levy Collection Act.
In addition, by operation of s 11 of the Collection Act, the applicant has the following additional obligations:
(1) The Corporation has the following functions on behalf of the Commonwealth under this Act:
(a) to receive returns made, or financial statements or certificates given, under this Act; and
(b) to receive payments of levy made under this Act; and
(c) to receive payments of additional levy made under section 7; and
(d) to sue for and recover amounts of levy and amounts of additional levy that have not been paid.
The applicant is granted certain powers under the Administration Act (s 8), being as follows:
(1) The Corporation has power to do all things that are necessary or convenient to be done for, or in connection with, the performance of its functions and, in particular, may:
(a) acquire, hold and dispose of real or personal property; and
(b) enter into contracts; and
(c) occupy, use and control any land or building owned or leased by the Commonwealth and made available for the purposes of the Corporation; and
(d) appoint agents and attorneys; and
(e) do anything incidental to any of its powers.
The applicant may sue for an amount of levy or additional levy pursuant to s 9(2) of the Collection Act, which provides:
(2)An amount of levy, or an amount of additional levy under section 7, that is payable but has not been paid may be sued for and recovered by the Corporation or by the other person (if any) to whom the amount is payable, as the case may be, in any court of competent jurisdiction.
Payments which may be made out of the Fund by the applicant are restricted to payments pursuant to the following provisions of the Administration Act:
(a)section 41 (Application of the Fund);
(b)section 44 (Reimbursement for payments relating to long service leave);
(c)section 47 (Reimbursement of overpayment of payroll levy);
(d)section 48 (Payments to employees if employer insolvent etc.); and
(e)section 51 (Expenses of the Corporation)
and the following provisions of the Collection Act:
(f)section 10B (Payment of auditor fees); and
(g)section 13(7) (Power to obtain information and evidence).
No other application to make payments out of the Fund is permitted under the Scheme.
The applicant’s Board may determine a matter of fact when a question arises as to whether an amount is payable to a person out of the Fund: s 49 of the Administration Act.
The applicant has investigatory powers to assist with compliance with the Scheme. Those powers are primarily to require the production of documents and information: s 52A of the Administration Act. It may also enter into an agreement with the Commissioner of Taxation to enable the entry upon premises and inspection of books (s 12 of the Collection Act), and to obtain information and evidence: s 13 of the Collection Act.
Consideration of the legislative scheme
As submitted by the applicant, in exercising its power to sue under s 9(2) of the Collection Act, the applicant is acting “on behalf of” the Commonwealth because it has a statutory function to collect the levy owed to the Commonwealth: s 11(1) of the Collection Act. A debt owed to “the Commonwealth” is one owed to the Commonwealth executive, which is in effect the “Crown”: Hocking at [74]–[75] (Kiefel CJ, Bell, Gageler and Keane JJ) citing with approval Rhind at 599; Jacobsen v Rogers [1995] HCA 6; 182 CLR 572 at 585; The Commonwealth v Western Australia [1999] HCA 5 196 CLR 392 at [31]–[36] (per Gleeson CJ and Gaudron J), [105]–[109] (per Gummow J); Sue v Hill at [90].
When the applicant sues for recovery, it may also seek civil penalties for breach of the Administration Act and Collection Act and is “on behalf of the Commonwealth” an “authorised applicant” for that purpose: s 49A(2) of the Administration Act, s 13A(2) of the Collection Act.
The levy and additional levy amounts required to be paid, being “debt[s] due to the Commonwealth” (s 9(1) of the Collection Act), are accordingly, as the applicant submits, “revenues or monies raised or received by the Executive Government of the Commonwealth” for the purposes of s 81 of the Constitution. The monies are accordingly paid into the Consolidated Revenue Fund. Monies are then appropriated out of the Consolidated Revenue Fund to the Fund established under s 40 of the Administration Act.
It is in this context, and is the clear purpose of the provisions (see for example the applicant’s functions at s 7 of the Administration Act and s 11 of the Collection Act, and the restrictions on the applicant to make payments out of the fund at ss 10B, 13(7) of the Collection Act and ss 41, 44, 47, 48 and 51 of the Administration Act), that the words “the Commonwealth” in s 11 of the Collection Act mean the Executive of the Commonwealth. As referred to above, the phrase “the Commonwealth” is capable of various meanings, corresponding to the several senses in which it is used in the Constitution: see Hocking at [74] (per Kiefel CJ, Bell, Gageler and Keane JJ), at [214]–[215] (per Edelman J). Here, by reason of the monies being raised or received by the Executive of the Commonwealth, the relevant meaning is that provided under s 81 of the Constitution.
The Limitation Act provides that the statute binds the Crown, and also provides an exclusion from the limitation periods in any “action by the Crown … for the recovery of a tax”: s 10(3). The “Crown” includes the “Crown in all its other capacities”: s 11 of the Limitation Act. This definition must include the “Crown in right of the Commonwealth”.
The Crown “in right of the Commonwealth”, when bringing an action for recovery of a tax, uses the executive power of the Commonwealth which is functionally exercised by the Executive Government of the Commonwealth: see Hocking at [75], [213]. As noted in Mewett at 498 (per Dawson J): “To sue the Commonwealth for such a wrong is to sue it in its executive capacity, that is to say, as the Crown in which the executive power of the Commonwealth is vested by s 61 of the Constitution”.
By virtue of s 11(1)(d) of the Collection Act, the applicant may sue to recover levy and additional levy. It does so because its function is also to receive payments of levy and additional levy on behalf of the Commonwealth: ss 11(1)(b)–(c) of the Collection Act. As explained above, those are debts due to the Commonwealth, to be understood as monies due to be received by the Executive of the Commonwealth under s 81 of the Constitution. It follows that when the applicant sues for recovery of levy and additional levy, it is doing so on behalf of the Executive of the Commonwealth, or put differently, “the Crown in right of the Commonwealth, in which the executive power is vested”.
Authorities that deal with whether a statutory corporation or other instrumentality of the Crown/Commonwealth is entitled to “Crown immunity”, and in order to do so must be an agent of the Crown, are irrelevant to the analysis. That question does not arise in the construction of s 10(3) of the Limitation Act.
The respondent contended that, based on the authorities, there is “no conceptual distinction” between a Crown agent or emanation and the Crown itself. In this regard, the respondent relies on Emmett J’s approach in Coal Mining Industry (Long Service Leave Funding) Corporation v Commissioner of Taxation (Cth) (1998) 85 FCR 401 at 414–415. At 415, his Honour stated:
…funded by the contribution from employers, the Corporation should not be characterised as an agent or emanation of the Crown so as to be entitled for Crown immunity.
I accept the applicant’s submission that this aspect of Emmett J’s decision dealing with Crown immunity is of limited utility. This judgment was overturned on appeal, albeit on the separate “public authority” point (at [22]), with the Full Court not needing to deal with the Crown immunity question: at [23]. The question of whether the applicant is an agent of the Crown (generally speaking) and entitled to Crown immunity (under the doctrine from Commonwealth v Cigamatic Pty Ltd (in liq) [1962] HCA 40; 108 CLR 372) is very different to the question of whether the applicant is a person “acting on behalf of the Crown” for the purposes of s 10(2) of the Limitation Act.
Is the additional levy a penalty for the purposes of s 18 of the Limitation Act?
Finally, the respondent contended at hearing that the “additional levy” (payable where the levy remains unpaid pursuant to s 7 of the Collection Act) constitutes a “penalty” within the meaning of s 18 of the Limitation Act, and therefore a two-year limitation runs from the date when the action first accrued arises.
Section 18 of the Limitation Act provides:
18 Penalty and forfeiture
(1) An action on a cause of action to recover a penalty or forfeiture, or sum by way of penalty or forfeiture, recoverable by virtue of an enactment, is not maintainable if brought after the expiration of a limitation period of two years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims.
(2) In this section penalty does not include a fine to which a person is liable on conviction for a criminal offence.
(Emphasis in original.)
For s 18 to apply, two limbs require satisfaction: whether the additional levy constitutes a “penalty” and secondly whether the Commonwealth law constitutes an “enactment”.
For the reasons which follow, I am of the view that the Collection Act is not “an enactment” within the meaning of s 18. Accordingly, there is no need for me to determine the question of whether it constitutes a penalty.
Consideration was given to whether a Federal law comprised an “enactment” within the meaning of s 18(1) of the Limitation Act in Fair Work Ombudsman v Toyota Material Handling (NSW) Pty Limited [2012] FCAFC 193; 209 FCR 428 at [55]–[61] per North and Flick JJ. See also Guss v Deputy Commissioner of Taxation [2015] FCA 841; 238 FCR 509 at [123] per Beach J which discussed the meaning of the word “enactment” in the Victorian limitation act. In FWO v Toyota Material Handling, North and Flick JJ determined, with reservation, for three reasons that “enactment” when used in s 18(1) is confined to an “enactment” passed by the Parliament of New South Wales (at [55]–[61]): First, the operation of the general rule of construction requires an interpretation which restrains the general words so that they would not apply to Federal proceedings; secondly, where there is a legislative intention to the contrary, the legislature must have provided so using express words, as in s 14(3); thirdly, the conferral by the Commonwealth Parliament of “standing” under the applicable Federal law to specified persons to seek civil remedies and to order a “pecuniary penalty” “sits uncomfortably” with any conclusion that a State legislature may impose a limit upon the time within which this Court may exercise that power. I embrace the reasoning of the Full Court and contrary to the submission of the respondent do not find that the circumstances are distinguishable.
The respondent submitted that the present case is distinguishable because there were other aspects of the Federal Act applicable in that case which were incongruous with the State limitation period, including that that Act had its own limitation periods for comparable contraventions. However, as can be seen from the above reasons, in the present case the Commonwealth has turned its mind to time limits for some aspects of the Scheme (e.g. by s 49A of the Administration Act, s 13A of the Collection Act and s 82 of the Regulatory Powers Act), giving rise to a presumed Commonwealth legislative intent that no limitation as to time was considered appropriate.
The respondent further contended that the finding in FWO v Toyota Material Handling is inconsistent with the majority’s holding in DTR Securities Pty Ltd v Deputy Commissioner of Taxation (Cth) (1987) 8 NSWLR 204 but without further elucidation. There was no specific consideration of the meaning of “enactment” in DTR Securities, the central issue was whether the “additional tax” constituted a penalty within the meaning of s 18.
Finally, the respondent submitted, that the Full Court’s decision in FWO v Toyota Material Handling did not accord with the “more modern” High Court authority when dealing with the general terms in State enactments, relying on Australian Securities and Investments Commission v Edensor Nominees Pty Ltd [2001] HCA 1; 204 CLR 559 where Gleeson CJ, Gaudron and Gummow JJ made observations at [68] regarding whether the reference to “court” was limited to a State court and at [140]–[142] where McHugh J referred to Thomas v Ducret (1984) 153 CLR 506 as to the meaning of “Court”. I do not accept that the High Court’s consideration of these questions in a different context renders unsound the reasoning of the Full Court in FWO v Toyota Material Handling.
Secondly, there is a question as to whether the additional levy sought by the respondent (if my reasoning is otherwise incorrect regarding the legislation covering the field and the additional levy constituting a tax) amounts to a “penalty”.
Section 7 of the Collection Act provides:
7 Additional levy
(1) If any levy remains unpaid on any day after the time when it became payable, or would apart from section 6 have become payable, additional levy is payable by way of penalty by the person liable to pay the levy, at the percentage applicable under subsection (2) in respect of that day, on the amount unpaid, computed from that time or, if under section 6 the Corporation has granted an extension of time for payment of the levy or has permitted payment of the levy to be made by instalments, from such date as the Corporation determines, not being a date before the date on which the levy was originally payable.
(2) The percentage applicable in respect of a day is 2 percentage points above the maximum indicator interest rate for that day, where:
maximum indicator interest rate, in relation to a day, means the higher or the highest, as the case may be, of the range of rates of interest per annum current on that day quoted by the Reserve Bank, on the basis of reports by each bank regarded by the Reserve Bank as a major trading bank operating in Australia, in respect of overdrafts of $100,000 or more.
(3) If judgment is given by, or entered in, a court for payment of:
(a) an amount of levy; or
(b) an amount that includes an amount of levy;
then:
(c) the levy is not taken, for the purposes of subsection (1), to have ceased to be payable merely because of the giving or entering of the judgment; and
(d) if the judgment debt carries interest, the additional levy that would, apart from this paragraph, be payable under this section in relation to the levy is, by force of this paragraph, reduced by:
(i) in a case to which paragraph (a) applies—the amount of the interest; or
(ii) in a case to which paragraph (b) applies—the amount worked out in accordance with the formula:
(4) In this section:
bank includes, but is not limited to, a body corporate that is an ADI (authorised deposit‑taking institution) for the purposes of the Banking Act 1959.
(Emphasis in original.)
The additional levy is described at s 7 of the Collection Act as an amount payable “by way of penalty”. However, the applicant submitted that when regard is had to the substance of s 7, what is in fact being required to be paid is in the nature of interest – that is, an interest payment on unpaid levy which is 2 percentage points above the “maximum indicator interest rate” as defined at s 7(2). Such an amount is broadly consistent with what a court would ordinarily require an unsuccessful party to pay by way of interest. Seen in this light, the purpose of the additional levy is not to penalise the non-payer, but rather to ensure that appropriate interest amounts are paid on that levy which has not been paid.
In this regard, reliance was placed by the applicant on the decision of Basten JA in State Insurance Regulatory Authority v Abdul-Rahman [2016] NSWCA 210; 93 NSWLR 21, in which his Honour assessed the meaning of “penalty” under the Limitation Act and, in the discussion from [38]–[58], ultimately concluded at [58], that there was a penalty where there was “recovery of an arbitrary amount of twice the premium for failure to maintain a policy of insurance” (emphasis added), said by the applicant to be different from the circumstances here. His Honour’s reasoning is instructive as it considers those features supportive of the provision constituting a penalty and the countervailing features.
If it were necessary for me to determine whether the additional levy constituted a penalty, I would make a finding in the affirmative, relying on the reasoning in Abdul-Rahman. First, whilst not determinative, the additional levy is described as being payable “by way of penalty”. However, this description supports the second reason. Secondly, it is clear that the additional levy comprises interest on the levy at a penal rate. Two percentage points above the maximum indicator interest rate of that day reveals the same and why, contrary to the applicant’s submissions, the additional levy cannot be described as being akin to “interest”. Thirdly, it is clear that the intent of the additional levy is to have a deterrent or punitive effect. It cannot be said that it is merely compensatory for late payment, as suggested by the applicant.
Lastly, I would note, though it was not argued before me, that it does appear arguable that whilst the additional levy would be characterised as a penalty, it nonetheless could arguably fall within the description of “interest on a tax” as captured by s 10(3) of the Limitation Act. Given I am not required to decide this issue, I did not seek further submissions from the parties in this regard.
Conclusion
For the reasons given above, I consider that Messrs Benjamin Garland, Brenton Gee, Brady Stair and Graeme Cooper are and were (as the case may be) “eligible employees” within the meaning of s 4(b) of the Administration Act, namely they were each an employee who is or was during the relevant period employed in the black coal mining industry, whose duties are or were carried out at or about a place where black coal is mined and are or were directly connected with the day to day operation of a black coal mine.
It is my view that the applicant’s proceeding is not covered by the Limitation Act.
I ask that the parties confer and provide short minutes as to the appropriate orders to give effect to these reasons.
Lastly, the issue regarding penalty remains to be determined. I would ask that the parties confer regarding a timetable for preparation regarding the same and the matter be adjourned until 28 February 2023 for consideration of the orders to be made and the next steps in this matter.
I certify that the preceding three hundred and fifty-eight (358) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Raper. Associate:
Dated: 8 February 2023
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