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Coal Industry Act changes and your insurance

Earlier this year, the NSW Government passed the Coal Industry Amendment Act 2018 (NSW) (the Amendments). The Amendments amend the Coal Industry Act 2001 (NSW) and the insurance industry participants require.

The Act will have significant impacts to the coal industry by:

  1. introducing a definition for employer of a coal industry to mean “any employer whose employees work in or about a coal mine[1]; and
  2. requiring that employers (from 1 July 2018) provide approved compulsory workers compensation insurance run by Coal Mines Insurance (CMI) for employees who work ‘in or around’ a coal mine.

Why was the Act introduced?

Following the 2014 Supreme Court case of Kuypers v Ashton Coal Operations Pty Ltd[2], where the Supreme Court found that it was necessary to establish that an employer is an employer “in” the coal industry to be covered by the special CMI workers compensation scheme, the NSW Government tabled the bill for these amendments to avoid the Court being required to consider that issue.

The NSW Government wanted to close any loophole or uncertainty that may affect the health and safety protection of mine workers with the special insurances provided by CMI by employers.

The growing presence of a flexible contract workforce was also a significant consideration for the Government when introducing this Act for the paramount safety of all mine workers regardless of their employment type.[3]

What does ‘working in or about a coal mine’ mean?

Work that is undertaken at any pit or place where coal mining is carried out or is developed for coal mining to be carried out. This will include any place that is located at or in the vicinity of the mine where materials that are being extracted are being processed.

When does an employer need to hold a policy with CMI?

Employers who have any employees who work in or about a coal mine and are engaged in mining activities in the coal industry will need to have a policy with CMI for their employees.

Examples include:

  • where you have employees who work in or around a coal mine for all or only part of the year; and
  • where you provide ancillary services to coal mining such as mining equipment maintenance and repair.

Even if you have employees who are engaged in mining activities but do not work in or around a coal mine you should have a policy with CMI to cover those works. This includes:

  • Mine operator workshops;
  • Mine operator administrative offices; and
  • Offsite coal washery and preparation plants.

Who will the Act affect?

The Act will have legal, practical and commercial implications for those affected businesses who fall under the widened definition of ‘employer’.

In particular, businesses who may not operate directly in the coal industry but who provide services to businesses in the coal industry may have employees who perform work ‘in or about’ a coal mine.

Employees who work in or around a coal mine making deliveries will also not be required to have a policy with CMI, example includes fuel and equipment deliveries. However, general workers compensation insurance schemes are still applicable.

What is the take out?

The new broad definition will capture companies that previously were not required to have CMI. Those companies that are on the periphery of the definition, must consider whether they are required to be insured, and if so, how that cost will be absorbed or passed on .

Further information from CMI on the new Act is available here:

https://www.coalservices.com.au/wp-content/uploads/2018/07/20180716_Coal-Industry-Act-Change-FAQs.pdf

If you have any questions regarding your legal obligations under the new Act please do not hesitate to contact Morrissey Law + Advisory.

This article was prepared by Ruby Lee and Mary Ann Wen.

 

[1] Schedule 1, Section 3 of the Coal Industry Amendment Act 2018 (NSW)

[2] [2014] NSWSC 1276

[3] Anderson Kevin MP, “Coal Industry Amendment Bill Second Reading Speech” (presented at the NSW Parliament Legislative Assembly, Sydney, 16 May 2018) Also available at https://www.parliament.nsw.gov.au/Hansard/Pages/HansardResult.aspx#/docid/HANSARD-1323879322-101854

 

Disclaimer: This publication by Morrissey Law & Advisory is for general information and commentary only and should not be considered or relied upon as legal advice. Formal legal advice should be sought in relation to any matters or transactions that may arise in relation with communication.

2018-11-09T11:18:03+00:00 November 9th, 2018|Uncategorized|