2nd Reading Speech

1 May 2018

The Hon. ADAM SEARLE ( 15:41 ): I lead for the Labor Opposition in debate on the Coal Industry Amendment Bill 2018. I am pleased to inform the House that we will be supporting the legislation. The Coal Industry Act provides for approved companies to carry out statutory functions under the legislation, including delivering workers compensation insurance, health surveillance, occupational health and rehabilitation services, the collection of statistics, monitoring of dust and other airborne contaminants, as well as supplying mines rescue emergency services and training to the New South Wales coal industry. The companies approved to conduct these functions are Coal Services and its subsidiaries, Coal Mines Insurance and Mines Rescue. The companies are jointly owned by the NSW Minerals Council and the Construction, Forestry, Maritime, Mining and Energy Union. The approved companies together provide a comprehensive health and safety scheme for the coalmining industry in New South Wales under arrangements that are unique in Australia and the world. The current scheme was a legacy of the Carr Labor Government.

To achieve the objectives of the legislation the approved company, Coal Mines Insurance, exercises a workers compensation insurance monopoly over employers in the coal industry. Coal Services also provides a specialist health and safety scheme for the New South Wales coal industry with very robust controls and monitoring, as the Minister outlined in his second reading speech. This enables employers who insure through the approved company to access health monitoring for their workers free of any additional charge. This monitoring assists mine operators to identify high-risk areas and activities and to drive further improvements in workplace health and safety in the coalmines. Importantly, these arrangements together have helped to effectively eliminate many conditions and illnesses that were for decades a feature of coalmining, not only in this State but also in other jurisdictions. For example, black lung disease, or pneumoconiosis as it is correctly known, has effectively been eliminated in this State. There have been some instances of it but it is much better than in other jurisdictions and this is as a result of the health screening function provided under this regime.

The work of these important services is met not by the State budget but by funds generated through workers compensation premiums paid to Coal Mines Insurance, the Mine Safety Levy investment returns and, of course, from commercially sourced revenue. As a result of two decisions of the New South Wales Supreme Court the monopoly over workers compensation insurance in the coalmining industry has for a number of years been under threat, which in turn threatens the ongoing provision of these vital health and rescue services that I outlined earlier. In the case of Kuypers v Ashton Coal Operations Pty Ltd, the Supreme Court concluded that in order for the special insurer of employers in the coal industry to be liable for an injured employee’s claim, the employer must be an employer “in” the coalmining industry. In its reasoning the court confirmed the earlier ruling by the New South Wales Court of Appeal in Central West Group apprentices Ltd v Coal Mines Insurance Ltd in 2008, that the phrase “employer in the coal industry” requires a substantive connection between the entity and the coal industry to satisfy the relationship required by the preposition “in” beyond merely being the employer of a person who works in and about a mine.

Working in and about a mine is the statutory test for workers to access workers compensation payments in the coal industry in this State. There were two different definitions of employer and employee in related but different pieces of legislation, which led to the court taking what I think was an unduly narrow and technical approach, which I will develop in a moment. The practical effect of the two decisions is that an entity that provides services that are integral to the coalmining industry does not necessarily lead to a finding that it is in the coalmining industry. To determine whether or not an employer is in the coalmining industry the courts found it was necessary to assess the substantive character of the industrial enterprise in which the employer is engaged and its connection with the coal industry. It sounds fair enough, but in the case of Kuypers the company at issue provided services such as exploration drilling, drilling service holes and drilling to enable dewatering of a site.

Although the overwhelming majority of its work was in the coal industry in New South Wales and in some years was exclusively for the coalmining industry it offered, at least technically and in some cases did provide, its services more widely. As a result the court held that this company was not in the coalmining industry of New South Wales. That was an interesting result, given that the legislation did not say “exclusively in the coalmining industry in New South Wales”. As I said, without being critical of the courts, I think an unduly narrow and technical approach has led to the current consequence. As a result many companies providing services to the coalmining industry, such as labour hire companies, are not required or may not at least be legally required to insure with Coal Services. They may be able to insure with other workers compensation insurance providers, which may have lower premiums that do not fully reflect the risk profile of employees working in the coal industry in this State.

Given the increasing level of contract and labour hire engagement in the New South Wales coalmining industry with workers often not being directly employed by coalmining companies per se, over time these rulings of the Supreme Court have the potential to destroy the integrity of the health and safety regime provided under successive governments to the industry in this State. While the level of compensation payments to injured workers in the coalmining industry has not, as I understand it, been impacted by these decisions, the loss of premium income to Coal Services does over time threaten to impact the provision of the other health and safety services to employees and employers in the industry. To date this has been avoided by commercially provided and obtained services and returns on investment; however, this is not an indefinite solution.

I applaud the Government for bringing forward this amendment that changes the definition of “employer in the coal industry” in the Coal Industry Act to make it clear that any employer whose employees work in and about a mine is required to be insured with the approved workers compensation company with respect to those employees and their employment.

Importantly, it synchronises that definition in the Coal Industry Act 2001, the Workers Compensation Act 1987 and Workplace Injury Management and Workers Compensation Act 1998 and closes the loophole created by those rulings.

The full consequences of the ruling of the Court of Appeal was not understood at the time. It was as a result of the Kuypers v Ashton Coal Operations Pty Ltd case that its full impact became public knowledge, and it has had an impact. I welcome the move by the Government to close that loophole by introducing this bill. For the sake of completeness and although these are matters of public record, I advise the House that I am a member of the Construction, Forestry, Maritime, Mining and Energy Union and Coal Services was previously, from time to time, a client of mine.

Mr David Shoebridge: It is still half owned by them.

The Hon. ADAM SEARLE: I have made that point. The point is that this is a sensible arrangement providing for the health and safety of those engaged as employers and employees in the coalmining industry. The vehicle for doing that is a body jointly owned by the association of employees and the association of employers. These arrangements have enjoyed bipartisan support under successive governments. However, their integrity has been impacted negatively by these court rulings, and the Government, with the Opposition’s support, is closing the loophole. It is taking measures to maintain the integrity of the scheme and to protect the health and safety of those who work in the industry. With those comments, I urge all members to support the passage of this legislation.