A coal producer that operates black coal mines in Queensland and NSW has signed an Enforceable Undertaking with the Fair Work Ombudsman after it rectified nearly $5 million, including superannuation and interest, to 197 underpaid workers.
Peabody Energy Australia Coal Pty Ltd (Peabody) signed the undertaking. It is a wholly owned and controlled subsidiary of United States-based parent company Peabody Energy Corporation.
In addition to its rectifications, Peabody must make a contrition payment of $50,000 to the Cleaning Accountability Framework, an independent, not-for-profit organisation that aims to improve working conditions and standards in property cleaning services.
The undertaking also commits the miner to improving its compliance practices, which includes new systems and processes, to meet all its obligations under the relevant Award and the Fair Work Act.
Peabody came forward to tell the FWO about an issue that was the subject of Federal Court proceedings filed by the Association of Professional Engineers, Scientists and Managers, Australia on behalf of members who used to work at Peabody.
A judge agreed that under the relevant Black Coal Mining Industry Award 2010 and 2020, employees terminated by way of redundancy were entitled to be paid out their accrued personal leave balance (of 70 hours or more). After the judgment, the parties reached an agreement and the proceedings were discontinued, however, Peabody began a remediation process to assess any other former employees who needed to be back-paid based on the principles in the court’s judgment. A self-report was made to the FWO in May 2023.
The underpaid employees, almost all of whom worked full-time, had duties in supervision, administration, production, warehousing, surveying, purchasing, geology, engineering and more. They worked across 14 mine sites in Queensland and NSW.
The most affected sites were all in Queensland – in North Goonyella (more than $1.4 million underpaid to 45 workers, excluding interest and super); Coppabella (more than $562,700 to 28 workers); and Millenium (more than $535,000 to 31 workers). The most affected NSW site was North Wambo (more than $452,000 underpaid to 24 workers).
Peabody admitted it did not pay out accrued and untaken personal leave to employees it made redundant. The company mistakenly believed the personal leave-related benefit was not due to employees under the Award.
It also failed to pay the allowance component of wages for accrued and outstanding annual leave for redundant employees, and the allowance component of their wages for the termination notice period for those who were made redundant.
Peabody had to rectify to its former employees a total of $4,982,070, including $988,568 in interest and $20,511 in superannuation after they were underpaid between January 2016 and April 2023.
Across all the employees, the lowest individual back payment was $272 and the highest was $91,013, excluding superannuation and interest.
An Enforceable Undertaking was considered appropriate because of the company’s cooperation with the FWO’s investigations, the full back-payments, and the measures put in place to prevent future breaches – including an independent audit to check compliance in the future.
Fair Work Ombudsman Anna Booth urged employers to proactively check they are meeting their legal obligations.
“Checking compliance – as Peabody have committed to do going forward – is an important cornerstone of ensuring hardworking employees receive all they are owed under any relevant Award and the Fair Work Act.
“We welcome Peabody’s back-payments of all impacted staff and their commitments to improve their processes so that there is ongoing compliance in the future. Importantly, we also welcome steps already taken, for example, Peabody’s new guidelines for payroll, its provision of training for HR and payroll staff, and its new online system for recording and requesting leave.
“We want employers to get it right in the first place and encourage them to take advantage of the free tools and resources we offer, including via fairwork.gov.au and the Fair Work Infoline,” Ms Booth said.
Under the EU with the Fair Work Ombudsman, Peabody has also agreed to convene a joint consultative committee to monitor compliance with industrial instruments, complaints or disputes raised, including any questions or concerns raised by the independent auditor.
It will report back to the FWO about complaints raised on any systemic or significant underpayment issues. It will also keep its corporate governance committee notified of its compliance, including providing it with a report on the outcome of its independent audit plus quarterly reports on employee complaints about their entitlements.
