The clause promised eight hours' pay a day until workers were paid - a judge said it can't stand
A union chased $842,000 for two redundant crane workers. A court gave back about $12,000 - and voided the clause behind the big number.
When the Federal Court handed down its decision on June 24, 2026, it did more than settle a redundancy pay fight. It marked out the limits of what an enterprise agreement can actually do - and reminded HR teams that a signed, approved clause can still be worth nothing.
The dispute came out of a Victorian crane-hire business, GC Crane Hire. Two mobile-crane operators were made redundant in late September 2023, after the employer's mobile-cranes division - then six or seven people - hit a downturn. The union sued, listing a run of alleged breaches of the enterprise agreement and the Fair Work Act.
The headline number came from a single clause. Under the agreement, a departing worker left waiting more than two business days for "accrued entitlements and other wages owing" could claim up to eight hours' pay for every day - weekends included - until they were paid. With wages still outstanding well after the deadline, the union put that "waiting time" entitlement at $421,000.32 for each worker. Across two redundancies, about $842,000.
The court would not enforce it. The judge found the clause was not about a "permitted matter" - the test for what an enterprise agreement may validly cover - because it only starts after employment ends and is measured over a period when no employment relationship exists. It read, the judge said, as a clause about a "former employer (as a debtor) and a former employee (as a creditor)." That put it outside the agreement's reach, and the seven-figure claim fell away.
The judge added a second, independent reason: the clause was "repugnant" to the Fair Work Act, because it tried to impose a money penalty for underpayment when the Act already controls how penalties are set. On either footing, the clause failed.
The employer was not in the clear. The court found GC Cranes underpaid wages on several occasions and failed to pay each worker four weeks' pay in lieu of notice on redundancy, as the agreement required - breaches of both the agreement and section 323 of the Fair Work Act, which governs how wages must be paid.
But the union lost ground that HR practitioners will find familiar.
It argued the unpaid notice was a "serious contravention," a label that lifts the penalty ceiling sharply. The court disagreed. Serious contraventions must be knowing and part of a systematic pattern. The judge was not persuaded the employer knew it owed four weeks in lieu - it had paid some notice and told the industry fund the workers were redundant - and a one-off decision to let two people go was not a pattern.
The union also said accrued personal and carer's leave should have been paid on top of the employer's contributions to the portable-leave fund. The court treated those as covering the same entitlement, not stacking on top of each other.
Then the consultation point - the one most worth pinning to the wall. The agreement's consultation clause is triggered by "a decision to introduce a major workplace change" likely to have a significant effect. The court split cause from effect: a dismissal is an effect of a change, not the change itself. Letting two of six or seven people go was not, on its own, a "major workplace change," so the consult-and-inform duty never switched on.
The redundancy rules did bite in one place. GC Cranes admitted it failed to first call for expressions of interest in voluntary redundancy, as the agreement required. The court accepted that as a breach.
The final tally: $5,084.30 to one worker, $7,130.42 to the other, plus interest. Penalties and any declarations were left for a case management hearing to be listed.
The lessons for HR and IR leaders sit on three points. A clause is only as strong as its legal base - a novel post-employment or penalty-style entitlement can be void even with sign-off and Commission approval. Redundancy steps are not interchangeable: notice, severance and consultation each have separate triggers, and skipping the call for volunteers is a breach on its own. And a consultation duty tied to "major workplace change" does not fire automatically when a job is lost - the change has to be the cause, not the result.
