Union wins major victory in Federal Court against Peabody on sick leave redundancy entitlements

18 August 2022

The Collieries’ Staff and Officials Association, a division of Professionals Australia has won a significant victory in the Federal Court against Peabody to protect the sick leave redundancy entitlements of members at the Wambo and North Goonyella mines in NSW and QLD respectively, a decision which has major implications for employees across Australia.

After two years, the Federal Court found that mining company Peabody was legally obliged to pay out specific redundant workers for accrued but untaken sick leave.

Peabody had attempted to claim that a ‘Guarantee of Annual Earnings’ clause, which precluded employees earning over $162,000 from being subject to the conditions of the Modern Award, could in fact be applied to all employees who had been made redundant and met this threshold, despite those employees having no such clause included in their own contracts.

Collieries’ Staff Division Director Catherine Bolger welcomed the decision and said it had major implications for all employees across Australia.

She said that mechanisms such as the ‘Guarantee of Annual Earnings’ clause were simply a backdoor to stripping workers of important rights and working conditions.

“This decision lays bare Peabody’s unscrupulous strategy to rob workers of their rights and working conditions and we welcome the that fact that it has been thrown out by the Federal Court.

“Peabody has failed in its attempt to unilaterally cancel the Modern Award for individuals, one by one, removing access to a comprehensive range of conditions and entitlements they would otherwise be protected by.

“Had Peabody’s attempt been successful, it would open the door for any employee in any industry earning over $163,000, whether it be engineering, mining, manufacturing or any other, having the rights and working conditions of their Award being stripped away.

Ms Bolger said that in this case, Peabody had attempted to use a loophole in industrial law to deprive workers of sick leave redundancy payments.

“Through the use of the ‘Guarantee of Annual Earnings’ clause, and the attempted extension of it to employees who had not contractually agreed to it, Peabody has sought to strip employees of the right to be paid out for accrued but not taken sick leave when an employee is made redundant.

“We welcome the Federal Court’s ruling that this act was illegal and Peabody must now pay the relevant redundant employees their accrued sick leave in full.

“However, it must be made clear that the use of such mechanisms as the ‘Guarantee of Annual Earnings’ clause are simply a cynical attempt by Peabody to disenfranchise employees of their rights under the Black Coal Mining Industry Award, and such mechanisms should not be legal under industrial law.

“Under no circumstances should an unscrupulous employer be permitted to circumvent critical rights, including those contained in Modern Awards, such as the payout of annual and sick leave in cases of redundancy.

“The conditions contained in Modern Awards have been developed over many generations to provide decency and fairness to all Australian workers. They provide an inalienable foundation of basic rights and conditions, which underpin safe and sustainable workplaces.

“These hard fought rights and working conditions should not be vulnerable to compromise at the whim of large corporations, who through the use underhanded contractual clauses, are able to cancel the Award with a ‘take it or leave it’ contract.

Ms Bolger also said that Peabody’s attempts undermine the conditions of loyal and hardworking employees was extremely disappointing.

“The employees in question have dedicated long periods of their professional careers to Peabody, fulfilling difficult roles in often complex and hazardous working environments.

“They are members and contributors to the local communities where Peabody operates and they have had a direct influence on the company’s returns. They should have been treated with decency and respect when confronted with redundancy by their employer.

“It’s a shame that its taken two years to confirm basic workplace entitlements after their working and family lives were uprooted due to no fault of their own following a serious safety incident. The Collieries’ Staff and Officials Association will continue to working toward ensuring that mechanisms such and the ‘Guarantee of Annual Earnings’ clause which disenfranchise members are eliminated, and that all employees receive the protection their rights and working conditions afford to them in Modern Awards.

Media Contact: Darren Rodrigo – 0414783405