Mining company made payment errors related to redundant employees' personal leave balance
Peabody Energy Australia has back-paid nearly $5 million to 197 underpaid employees as it entered an Enforceable Undertaking (EU) with the Fair Work Ombudsman (FWO) after errors in employees' personal leave-related benefit.
The company, which is a wholly owned and controlled subsidiary of its US-based parent firm, back-paid former employees a total of $4,982,070. This includes $988,568 in interest and $20,511 in superannuation.
According to the FWO, Peabody Energy self-reported the underpayments in May 2023 after a remediation process to assess if employees that it made redundant were paid out their accrued personal leave balance.
The remediation process followed discontinued Federal Court proceedings, where a judge found that employees terminated by way of redundancy were entitled to be paid out their accrued personal leave balance under the relevant Black Coal Mining Industry Award 2010 and 2020.
Peabody admitted that it did not pay out accrued and untaken personal leave to employees it made redundant under the belief that personal leave-related benefit was not due to employees.
It also reported that it failed to pay the allowance component of wages for accrued and outstanding annual leave for redundant employees, as well as the allowance component of their wages for the termination notice period for those who were made redundant.
Who were the impacted employees?
The underpaid employees were employed between January 2016 and April 2023, according to the FWO.
Almost all of the affected employees worked full-time and had duties in supervision, administration, production, warehousing, surveying, purchasing, geology, engineering, among others.
The most affected sites were all in Queensland, particularly in its North Goonyella mine site, where 45 workers were underpaid by more than $1.4 million.
Twenty-eight employees in Coppabella were also underpaid more than $562,700, while 31 workers in Millenium were underpaid more than $535,000.
In New South Wales, the most affected site was North Wambo, where 24 workers were underpaid more than $452,000.
Enforceable Undertaking with FWO
"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," said Fair Work Ombudsman Anna Booth in a statement.
According to the FWO, Peabody has also implemented new payroll guidelines, a new online system for recording and requesting leave, as well as provision of training for HR and payroll staff.
These measures, as well as the back-payments, made the EU appropriate for Peabody's case.
"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," Booth said.
Under the EU, Peabody Energy commits to improving its compliance practices, which includes new systems and processes, to meet all its obligations under the relevant Award and Fair Work Act.
The miner has also agreed to a joint consultative committee to monitor compliance, and report back to the FWO about complaints raised on any systemic or significant underpayment issues.
It must also 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.
