During a session with Ms. Darlene Perks from Coal LSL, I inquired about the case of Mr. James Joseph, who is currently in a significant dispute with Coal LSL regarding payment of his long service leave entitlements.
Ms. Perks stated that Coal LSL would not take any action until they received notification from the employer via a levy form. She said that disputes arising from the failure to provide correct information should be directed to the Fair Work Commission for resolution. Ms. Perks explained that employers often make errors on certain forms, which then require adjustment. She added that if an employee is no longer employed, levy payments would cease.
I asked about the risks that were alluded to in a recent ANAO audit and was told that the concerns related to errors in financial statements and the valuation of unlisted trusts, which are quite complex.
When I questioned why the management of billion-dollar government funds is in private hands, I was told it would be taken on notice and answered at a later time.
— Senate Estimates | October 2025
Transcript
CHAIR: Senator ROBERTS, you have the call.
Senator ROBERTS: Thank you, Ms Perks and everyone from Coal LSL. Mr James Joseph was injured on BHP’s Mount Arthur coal mine on 7 June 2023. Are you familiar with James Joseph?
Ms Perks: We are familiar with James Joseph, yes.
Senator ROBERTS: Coal LSL have confirmed with Mr Joseph that they were not informed of his workers comp status, which was approved in May 2024 following a six-month delay. Mr Joseph’s correct workers compensation status seems not to have been reported to Coal LSL by BHP or the insurer, Coal Mines Insurance. The board of directors of Coal Mines Insurance, I understand, has 50 per cent Mining and Energy Union directors and 50 per cent coal owners.
Ms Perks: I’ll answer the last part. The shareholding of Coal Services, which I think you were just referring to—
Senator ROBERTS: Coal Mines Insurance.
Ms Perks: Yes. It is not an organisation we have any relationship with in our jurisdiction, but I can confirm that the shareholding is as you have reflected—the Minerals Council and the CFMEU.
Senator ROBERTS: That’s the composition of the board? Fifty-fifty?
Ms Perks: Our board?
Senator ROBERTS: The Coal Mines Insurance board.
Ms Perks: I can confirm that, but I think they do have independent directors.
Senator ROBERTS: What about your board?
Ms Perks: The legislative framework hasn’t changed in all the hearings we’ve had. Our board has six directors who are appointed by the responsible minister—three directors nominated by employee companies or bodies and three directors nominated by union organisations. They are minister appointed.
Senator ROBERTS: Thank you for correcting that. It’s fifty-fifty again?
Ms Perks: Our director composition?
Senator ROBERTS: Your board composition.
Ms Perks: Yes.
Senator ROBERTS: Fifty-fifty employers and union—okay. What is being done to rectify this particular case, and is this a common occurrence—that is, an employee is medically terminated whilst on workers comp and Coal LSL are not informed by the employer or their insurer? This seems, by the way, very familiar. It is similar to the mistreatment of Mr Simon Turner by BHP and his employer at the time, the labour hire firm, Chandler Macleod. What’s being done to resolve this, and is it common?
Ms Perks: The scenario we’re talking of is termination. I tried to explain this in a couple of hearings over the years as well, but I appreciate there are a lot of new members, and I’ll explain the process again. Our GM of Legal, Michael Dowzer might be able to add to the process. The employer will advise us through their monthly levy returns a termination code for the employee. One of the reasons for termination can be ill health. Others would be redundancy or cessation. That process hasn’t changed. That is the legislative arena that we operate within. Nothing has changed from the explanations over the years with regard to how we collect the data, how the employer advises us and how we then verify the data through the relationships and interactions with the employers.
Senator ROBERTS: Was that one of the problems that Coal LSL was encountering—a lack of verification of the data? I’m not saying you didn’t do this here. It’s common then for someone’s employment to be terminated while still being on workers comp?
Ms Perks: I can’t talk to the commonality of that with regard to the data. As I said, the reason for cessation will be advised to us by the employer.
Senator ROBERTS: But sometimes the employer won’t notify you.
Ms Perks: They will notify us of a reason for termination.
Senator ROBERTS: Yes, but sometimes they won’t notify you that he has actually been terminated.
Ms Perks: Would you like to add to that, Michael?
Mr Dowzer: The notification comes through our levy form, and they identify when employment has ceased and the cessation code which indicates the reason for termination. That is a report from the employer. If subsequently there is an issue in relation to that, we’ll engage with both the employee and the employer to seek to understand that issue, but, ultimately, it’s to be resolved between the employer and the employee.
Senator ROBERTS: The question was: is it a common occurrence that an employee is medically terminated while on workers comp and Coal LSL are not informed by the employer or the insurer?
Mr Dowzer: What we are notified of is the cessation of the employment. There’s no requirement to notify us in relation to any other details in the employment relationship.
Senator ROBERTS: So, in your experience of checking up, it’s not really common that you’re not notified?
Ms Perks: The way I’d answer that is in relation to complaints. Your question is: is it a common occurrence? No, we don’t have volumes of complaints which would illustrate a systemic issue in the common occurrence of employers advising us of termination codes which an employee doesn’t agree with. I know there are a couple of cases, and, certainly, we’ve had a lot of conversations around those. But I wouldn’t say it’s a systemic issue that has been understood through volumes of complaints for the scenarios that you’re talking about.
Senator ROBERTS: I’m not accusing you of governance issues at the moment. We sorted them out, hopefully, after the review. What are the implications when this occurs—for example, an impact to levy payments, because the employer is no longer paying, super payments and internal workloads of Coal LSL to investigate and resolve such matters? Does that put a burden on you?
Ms Perks: In the scenario where it’s found that an employer has advised us of a termination code that an employee disagrees with, certainly the resource from the team would be to engage with the employer, engage with the employee, assess the information et cetera. If that is unresolved, then we would be advising the employee to take it to the Fair Work Commission, because we’d be classifying it as an industrial relations dispute, which is out of our jurisdiction.
Senator ROBERTS: If the companies fail to notify Coal LSL within a reasonable period, what would normally come of it? For example, there was a six-month failure to inform you in Mr Joseph’s case. What happened there when BHP didn’t inform you for six months?
Ms Perks: I’ll talk about the obligation under the collection act, where the employer has an obligation to submit a monthly levy return. That is a statutory obligation. In regard to correcting or working through a disagreement or a dispute in information that we’ve received, that would be a process which isn’t time bound in our statutory frameworks. But the employer has an obligation to inform us monthly of employees’ service and any other critical information, such as terminations and eligible wages.
Senator ROBERTS: If this is proved to have occurred through a registered organisation, what intervention, penalty or enforcement would Coal LSL apply under its constitution to deter recurrence? Is there any?
Mr Dowzer: The key obligation is to submit a monthly levy return with correct information. We are reliant on that information in terms of being able to conduct any further inquiries. If an issue is brought to our attention by an employee, we will engage with the employer and seek to get the employer and the employee to resolve that issue and communicate the outcome to us. We don’t have any power to adjudicate on that dispute.
Senator ROBERTS: So there are no consequences for the employer?
Mr Dowzer: If there’s an incorrect levy return then there could be consequences, but that is a factual matter which we would not have evidence of.
Senator ROBERTS: Could you please advise why Mr Joseph’s Coal LSL number looks to only exist from September 2022 onwards, as per his Coal LSL commencement letter, recently provided to him under a freedom of information request? What is the specific reason for the delay in creating his Coal LSL member number?
Ms Perks: I think we’d have to take that one on notice and have a look at the timeframe of his records and provide a response on that review.
Senator ROBERTS: Mr Joseph has been provided information under FOI, freedom of information, that shows Coal LSL levies were paid by BHP to Coal LSL in as early as July 2022. However, his welcome member letter was produced in September 2022. Why was that?
Ms Perks: We’ll take that on notice.
Senator ROBERTS: Is it possible for levies to be paid when an identification number does not yet exist?
Mr Dowzer: When the levy return identifies a new employee, we will take that information and effectively create a record for that employee. Our obligation is to keep records—
Senator ROBERTS: And then you get an identification number out of that?
Mr Dowzer: There is an identification number which would be created at that point at which the employee is first put on a levy return.
Senator ROBERTS: So it wouldn’t be possible for levies to be paid when an identification number does not yet exist?
Mr Dowzer: The first time that a new employee is properly identified on a levy return would be the point at which we would commence a record for that employee.
Senator ROBERTS: Mr Joseph requested all company audits provided by BHP to Coal LSL for the entire period of his employment, from 2011 to 2024. I don’t think he was continually employed at Mount Arthur for that period; I think he was involved in other divisions of the company, including in Western Australia. Why was he only provided with two years, considering that Coal LSL are reviewing his open recognition of prior service application for periods that fall within this freedom of information date range, 2011 to 2024?
Ms Perks: Can I take that one on notice as well? I do know the FOI case. I can’t answer without going back to the reasoning as to why that information was provided and some wasn’t.
Senator ROBERTS: Sure.
Ms Perks: I know that the team work within the jurisdictions of FOI, so we’ll take that one on notice and provide a reasoning.
Senator ROBERTS: That’s fine, Ms Perks. The December 2023 Coal LSL BHP external audit report indicates potential discrepancies in reimbursement amounts claimed by BHP. Has the investigation into this matter been completed? This is two years later.
Ms Perks: That’s their audit report? I’d say it’s quite common, through the process of that audit work, for employers to have adjustments in reimbursement claims or levies. It’s through that audit process that the reimbursement, if it’s overclaimed or overpaid, would be rectified, and similarly the levy payment would be rectified. I won’t answer without being able to check with the team that that has been closed out, but I’d be very confident, with an audit report dated December 2023, that an action from the audit report submission would be closed out, as our administrative processes would—
Senator ROBERTS: Thank you. Perhaps you could take this next item on notice, then. Was this, in fact, found to be a confirmed finding—that is, BHP claiming illegitimate reimbursements? If so, how significant were the findings of this discrepancy?
Ms Perks: ‘Illegitimate’ is a strong word. Again, if I take us back to the process of the employer, it is a selfreporting scheme. The employers, through the submission of monthly levy returns and then the reimbursement claim process, will be calculating based on our guidance of how to calculate levy payments and also how to claim the reimbursement under the reimbursement rules. It is very common that employers get it wrong. It’s a complex administrative process. So it is quite common that, through the external audit function that we rely on for the assurance of the correctness of levies paid and reimbursement claims, there will be a—
Senator ROBERTS: An adjustment?
Ms Perks: An adjustment. I wouldn’t typically classify that as illegitimate or deliberate actions. We would typically see that as human error on the employer’s side, and the audit process provides the assurance to then get the adjustments correct.
Senator ROBERTS: Is this a disclosable matter? If it is, was it disclosed in the Coal LSL annual report for financial year 2023-24?
Ms Perks: No, that’s not a disclosable matter.
Senator ROBERTS: Thank you. Is it true that BHP did not pay any Coal LSL monthly levies from any of their owned entities to the Commonwealth Coal LSL fund in the period between November 2015 and November 2016?
Ms Perks: I will take that on notice, but I would be very surprised to find that they hadn’t paid levies. I would be very confident in saying they have paid the levies, but we will take that on notice to answer your question.
Senator ROBERTS: Something in my mind is reminding me that that might have been proven in the Iron Mountain document. Can you recall that? I can’t.
Ms Perks: I’m not familiar with that document.
Senator ROBERTS: Okay. Could you also tell me what was done about it, please.
Ms Perks: If it wasn’t paid?
Senator ROBERTS: Yes.
Ms Perks: Yes.
Senator ROBERTS: Was that approach consistent with the Coal LSL constitution at the time, and were any penalties applied? Could you tell us that as well, please.
Ms Perks: If an employer hasn’t paid a levy in line with their obligations under the collection act, the lever that we have available is to charge an additional levy. It’s an interest calculation. That is the lever that we’d have available to us.
Senator ROBERTS: So we have got some penalty provisions?
Ms Perks: We do have some penalty provisions.
Senator ROBERTS: BHP and Coal Mines Insurance previously refused to acknowledge Mr Joseph as a black coal industry covered employee, challenging him on this as recently as July 2024, yet Coal LSL have received levies from Mr Joseph since July 2022. Can you explain how and why this would occur, from Coal LSL’s perspective. I’ve got my thoughts on it. Ms Perks: Other than taking it on notice—
Mr Dowzer: My position on that is that, for the purpose of compliance with our scheme, the inclusion of an employee on a levy return is a statement by the employee in relation to eligibility under our scheme. As to matters relating to other issues of employment, we do not have visibility on them and wouldn’t have a view on them.
Senator ROBERTS: Yes. I’m guessing there’s still probably some confusion. Mr Joseph was on what some people call a staff payroll, which is an admin job, a managerial job or a supervisory job, compared with, say, a coalminer at the front line, who would be on an hourly rate.
Mr Dowzer: I would make the distinction that coverage under any industrial arrangements is, in some cases, a different assessment to eligibility under our scheme, so it’s really not appropriate for us to be commenting on those interpretation questions.
Senator ROBERTS: I’m just wondering whether that’s where some of the confusion comes from. He wouldn’t have been on the supervisory staff or administrative staff. He wouldn’t have been on the Black Coal Mining Industry Award. He would’ve been on the staff award, for example. Does the Coal LSL levy apply to the accident pay component of employee wages when on workers compensation?
Mr Dowzer: The issue of an employee on workers compensation is dependent upon the nature of the workers compensation arrangement between the employer and the employee. So, if the employee remains employed by the employer, then that is leviable eligible wages. If employment has ceased, then the obligation under our scheme is on the employer. There is no obligation on an insurer under our scheme. There is no leviable eligible wages if employment has ceased.
Senator ROBERTS: So, if the insurer is paying workers compensation but the employee has been terminated, there’s no obligation on BHP?
Mr Dowzer: That is correct.
Senator ROBERTS: And there’s no obligation on the insurer to pay either. Is that what you’re saying?
Mr Dowzer: That is correct.
Senator ROBERTS: Should an employee on workers comp in the black coal mining industry who is medically terminated and who remains on workers comp continue to accrue Coal LSL leave if they remain incapacitated due to their injuries and condition whilst they continue receiving workers compensation wages? You’ve just answered that question. This gets complex, doesn’t it?
CHAIR: How are you going there, Senator?
Senator ROBERTS: I probably need another five minutes—maybe less, because we’re going to change topic pretty soon, and then it should go quickly. In previous estimates, the Department of Employment and Workplace Relations has stated there is a list of around 80 entities who may have been paying levies in error. Has this investigation now concluded?
Ms Perks: Paying levies in error?
Senator ROBERTS: Yes. Do you remember that?
Ms Perks: Yes. That investigation has concluded. There were 28 employers who were paying levy in error, and 25 of the 28 employers have been refunded that levy amount. The three remaining, for different reasons, still need to be transacted. We’re waiting on the employer to provide information so that we can refund that amount.
Senator ROBERTS: So they overpaid.
Ms Perks: They incorrectly paid into the scheme.
Senator ROBERTS: Too much. Were any of the entities coal services or coalmining services? They wouldn’t have been, would they? They don’t employ coalminers.
Ms Perks: No.
Senator ROBERTS: Does the list include any BHP owned entities?
Ms Perks: No.
Senator ROBERTS: I will change topics, you’ll be pleased to know. I will move on to the audit. The report of the most recent audit of Coal LSL conducted by the Australian National Audit Office flagged ‘higher risk related to both valuation of investments and the valuation of provision for reimbursements’. What is the real meaning of these two findings of risk in regard to the effective operations of and the integrity of the scheme? What are the risks and who is at risk of exposure?
Ms Perks: Mr Windever will answer that question.
Mr Windever: The external audit focuses on areas of high risk on our balance sheet, and these particularly will be in areas of our provision for reimbursements, which is a piece of analysis that is covered by our actuary, but also our investments, as you pointed out. To be specific, they’re higher areas of risk of misstatement of our financial statements. I’ll speak to the first one.
Senator ROBERTS: Not financial risk, just a risk of error in your statements?
Mr Windever: In the financial statements—that’s correct. If we talk about the first one, the provision for reimbursements, that analysis is conducted by our actuary. It’s considered to be an area of higher risk, rather than a high risk, for the organisation, just by the very nature of the modelling, the estimations, the assumptions and the judgements that go into that. It’s an inherently high-risk area and one that’s a recurring area of higher risk, if you like, in our audit reports in previous times. It’s not a new finding for us. The second finding around investments is around the valuation of our unlisted trusts. Simply, the reason why this continues to be a high-risk area is the nature of those investments. Unlisted trusts are considered to be more complex from a valuation standpoint compared to other forms of assets. Certainly, there’s a portion of our portfolio that is illiquid assets. They are also, from an auditing standpoint, more complex to assess from a valuation standpoint. That’s why the valuation for investments is also considered a high-risk area. Again, it’s something that we’ve seen in previous audits. It’s not a new set of findings for us.
Senator ROBERTS: So it doesn’t affect the integrity of the scheme; it’s got more to do with assessing the size of the investments, the rates of payout and the rates of income.
Mr Windever: That’s correct. It’s so that we can stand behind the accuracy of the financial statements. Again, these two areas are focused on our balance sheet in particular.
Senator ROBERTS: You said there’s no real risk to your entity—Coal LSL.
Mr Windever: That’s correct.
Senator ROBERTS: So there’s not going to be much fallout if the risks crystallize.
Mr Windever: They’re considered to be high-risk areas, but, each year, as we work through the audits—we had a successful passing again of this audit of our financial statements. We’re satisfied with that outcome.
Senator ROBERTS: I’ll move on to the next part of this. The funds arrive in the accounts of the scheme from compulsory levies upon the relevant employers, right? The funds held by the fund are now in excess of $2 billion. What happens to the excess income generated from the scheme after leave entitlements are paid out?
Mr Windever: You’re correct about the size of the fund. It’s $2.6 billion now. We measure the health of that in terms of a fund surplus or a fund coverage ratio. That’s how I would answer that question, if you like. It remains on the balance sheet, but we have some goals that we work towards around the coverage of assets over our liabilities, and we manage to those goals accordingly. That’s how I’d answer that one.
Senator ROBERTS: I’ll come back to that in a minute. Emmett J in the Federal Court in 1998 emphasised that—and I acknowledge that that’s some 27 years ago—there was a lack of control of the corporation by the government and a lack of accountability to the government. Was Coal LSL a government entity at that time?
Ms Perks: In 1998? Yes. It was in 1992 that the entity was established under the administration act.
Senator ROBERTS: What change of governance, if any, has occurred within Coal LSL since then to tighten that up?
Ms Perks: Since 1998? That’s a very big question. I can talk about what we’ve done since I’ve been in the organisations, and we’ve had a lot of conversations around that. I can—
Senator ROBERTS: Governance was a particularly hot issue.
Ms Perks: I can talk to that specifically. Since 1998—I wouldn’t answer that question.
Senator ROBERTS: I hear what you’re saying. Given that the fund was originally set up as a stopgap measure to build up a money chest, if you like, to cover an estimated shortfall of funds to cover long service leave claims, can your office comment on the purpose for which it’s satisfied for the fund to continue generating millions of dollars per year after the original purpose was met a quarter of a century ago. Why is it still continuing?
Ms Perks: It’s a very good policy question. I can talk with passion about the value of the scheme, and I’m the first one to talk about the value of portable long service leave and what it has done for the industry and employees in the industry. What I would say is—
Senator ROBERTS: Excuse me for cutting you off. I didn’t mean that. You don’t need to convince me of that portability. That’s fine. What I’m getting to is that my understanding—I think it’s correct—is that there was a fund created because there was a shortfall in funds. Now, you’ve a massive service in funds. Why is the fund still in existence?
Ms Perks: That would be a question for government. I think you’re referring to the first reading speech or the explanatory memorandum in 1992, which talked about why the fund was being created. The payroll levy was set at five per cent at that point in time to get the fund back into—
Senator ROBERTS: I’m comfortable with all of that.
Ms Perks: What I would say, though, is that it wasn’t legislated. There was nothing in the legislation in 1992 to legislate a winding up of the fund. Yes, it’s in the first reading speech as—well, is it an intention? I won’t comment. It’s definitely in the first reading speech, but that didn’t translate into the legislation when the fund and the corporation were established.
Senator ROBERTS: I’m not talking about the original coalmine insurance fund. I’m a bit hazy on this, but I understand that there was a stopgap measure of an increase in funds to cover a shortfall due to excessive payouts and not enough revenue coming in. It was probably one of the boom-and-bust years, so they instituted an additional levy as a temporary stopgap. It’s now well past that, and they’ve got a massive $2.6 billion in funds. You don’t need it anymore. Why is it still going?
Ms Perks: Why is the fund still going?
Senator ROBERTS: The extra fund.
Ms Perks: No, the additional payroll levy that you’re talking about was removed in 2008 from memory. The payroll levy was set, and then there was an additional component added, which made it a levy of five per cent. That was in place from 1992 through to—I think it was 2005, from memory. When the fund got back into a neutral position, that’s when that additional levy component was removed. Our levy has been at 2.7 per cent for many years.
Senator ROBERTS: That’s what I was getting at—not the original fund, the stopgap fund. So that has been removed?
Ms Perks: Yes.
Senator ROBERTS: So this is wrong. Thank you. Minister, a question for you—why is a private company run by the NSW Minerals Council, the Queensland Resources Council and the Mining and Energy Union managing billions of dollars contributed compulsorily by employers on behalf of the federal government?
Senator Walsh: I’ll have to take that on notice, Senator Roberts and see what I can provide you.
Senator ROBERTS: Thank you. Before you came into the chair, a lot of the problems in the coal sector came from entities that have 50 per cent Minerals Council or 50 per cent Queensland Resources Council and 50 per cent Mining and Energy Union directors. There seems to be a very tight cluster of organisations—Coal Mines Insurance, Coal LSL, Coal Services. There’s another entity in there too that I’ve forgotten.
CHAIR: I think the minister’s taken that on notice.
Senator ROBERTS: Yes. I’m just trying to give her some background. That’s it; thank you very much.
