Pit railway sat on by working dog (8)
I believe the answer is:
Here is my best explanation:
'pit' is the definition.
('colliery' can be a synonym of 'pit')
'railway sat on by working dog' is the wordplay.
'railway' becomes 'ry' (abbreviation for railway).
'sat on by' is a charade indicator (letters next to each other).
'working dog' becomes 'collie' (collie is a kind of working dog).
'ry' after 'collie' is 'COLLIERY'.
(Other definitions for colliery that I've seen before include "A coalmine and its buildings", "Mining complex", "Pit", "Coal-mining establishment", "Coal mine", "Coalmine and surrounding buildings", "Where a coalminer goes to work", "Grimethorpe?" and "Mine".)