THE NSW opposition wants a full inquiry into the government body overseeing portable long service leave for construction workers, after a whistleblower raised shortcomings similar to allegations made against the corresponding fund for Hunter coal workers.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Labor upper house MLC Adam Searle said both funds needed to be properly administered to protect the leave earned by thousands of Hunter workers.
"There are serious allegations that developers have under-valued projects to reduce their long service liability," Mr Searle said.
"With the coal fund, it appears the casualisation of the industry has opened up opportunities for employers to short-change workers."
In both funds, the officials in charge have either denied problems or played down their significance, although the coal industry fund - Coal LSL - confirmed it was undertaking an audit as a result of allegations raised by Senator Malcolm Roberts of One Nation.
Coal LSL's most recent annual report, for 2018-19, said it had $1.83 billion in funds under management and was managing the long service accounts of more than 118,000 employees and 780 employers.
The NSW fund's 2019 annual report showed it to be of a similar size, with $1.82 billion in total assets.
It managed the long service accounts of 422,455 workers and 34,154 employers in the building and construction industry, and 74,999 workers and 828 employers in the contract cleaning industry.
Senator Roberts has raised Coal LSL issues at the past three Senate estimates, held every six months.
The key cross-bench member has made it clear he wants change before he will support the Morrison government's proposed new industrial relations bill.
Problems in the NSW government's construction industry Long Service Corporation were exposed last week by the Sydney Morning Herald, working with documents provided to Mr Searle through a parliamentary "call for papers".
Both Coal LSL and the construction industry fund were set up to provide long service leave to workers on the basis of their time spent in the industry, rather than their time working for any one employer.
The coal fund began in 1949 and the NSW construction fund legislation dates from the 1980s, with other states having similar scheme.
Employers pay levies to the funds, which invest the money with actuarial oversight to ensure they can meet their liabilities.
The construction fund says its levy is 0.35 per cent of project value, or 1.7 per cent of a cleaner's ordinary wage, while Coal LSL says its wage levy was cut from 2.7 per cent to 2 per cent in 2018.
Mr Searle said he called for the construction industry documents to be produced in parliament because of serious allegations of potential fraud and mismanagement.
"From what we can see, there is a strong basis for concern," Mr Searle said.
"If there is systematic undervaluation of projects leading to lower long service leave payments being made, then developers are stealing from workers. If correct, this would be a further example of wage theft on a massive scale.
"There now needs to be a full and proper external audit or inquiry, to see what has been going on in this government agency. It is not enough for the agency to investigate itself.
"The long service payments by developers should be made on the total final value of a project, not just an estimate. If the law has not been followed, those responsible need to be held to account. If there is a lack of clarity in what the law means, that must be addressed urgently by Parliament.
"If the minister fails to act, I will propose an upper house inquiry look into these matters."
While you're with us, did you know the Newcastle Herald offers breaking news alerts, daily email newsletters and more? Keep up to date with all the local news - sign up here
IN THE NEWS: