BLACK COAL MINING INDUSTRY AWARD 2010 - [2015] FWCFB 2192

[2015] FWCFB 2192

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.156 - 4 yearly review of modern awards

4 yearly review of modern awards
(AM2014/67)

BLACK COAL MINING INDUSTRY AWARD 2010
[MA000001]

Coal industry
VICE PRESIDENT HATCHER SENIOR DEPUTY PRESIDENT HAMBERGER DEPUTY PRESIDENT GOSTENCNIK COMMISSIONER JOHNS	SYDNEY, 10 APRIL 2015

Variation of clause 14.4(c) of the Black Coal Mining Industry Award 2010 - redundancy.

Introduction and background

[1] Clause 14 of the Black Coal Mining Industry Award 2010 1(Award) makes provision for severance and retrenchment payments to be made to redundant employees. Relevantly, it provides (underlining added):

“14. Redundancy

14.1 The redundancy arrangements in this award are an industry-specific redundancy scheme and, as such, Subdivision B of Division 11 the NES does not apply.

14.2 Definition of redundancy

(a) An employee is made redundant where an employee’s employment is terminated at the employer’s initiative:

(i) because the employer no longer requires the job done by the employee to be done by anyone except where this is due to the ordinary and customary turnover of labour; or

(ii) because of insolvency or bankruptcy of the employer.

(b) This clause does not apply to employees engaged for a fixed term or a specified task.

14.3 Severance payment

Except where clause 14.5 applies, when terminations occur due to redundancy the employees terminated are entitled to severance pay equal to one ordinary week’s pay for each completed year of employment.

14.4 Retrenchment payment

(a) Except where clause 14.5 applies, where redundancies occur due to:

(i) technological change;

(ii) market forces; or

(iii) diminution of reserves,

the employees terminated are entitled to retrenchment pay equal to two ordinary weeks’ pay for each completed year of employment. This payment is additional to the payment prescribed in clause 14.3. This makes a total of three ordinary weeks’ pay for each completed year of employment.

(b) Regardless of length of employment, the minimum payment due to employees under clause 14.4(a) is two ordinary weeks’ pay.

(c) The amount of payment due under clause 14.4 is not to be more than what an employee would have received had the employee remained in employment with the employer until the age of 60 years.

14.5 Exemption
. . .

14.6 Variation of retrenchment pay
. . .”

[2] Under s.156(1) of the Fair Work Act 2009 (FW Act), the Commission is obliged to conduct a 4 yearly review of modern awards as soon as practicable after each 4th anniversary of the commencement of Part 2-3 of the FW Act, being 1 January 2010. In a letter dated 9 May 2014, the Construction, Forestry, Mining and Energy Union (CFMEU), as part of the 4 yearly review which commenced in 2014, identified clause 14.4(c) of the Award as a potential item of review on the basis that it is discriminatory against employees who had attained the age of 60 or more. On 26 September 2014 the Commission published an exposure draft of the reviewed Award which replicated the existing…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] FWCFB 2192
Decision Date: 10 APRIL 2015

CaseChat Overview and Summary

The matter before the Fair Work Commission involved an application by the applicant, the Australian Workers Union, to vary clause 14.4(c) of the Black Coal Mining Industry Award 2010, which pertains to redundancy payments. The dispute centred around the interpretation and application of the redundancy provisions within the award, specifically in relation to the calculation of long service leave entitlements for employees made redundant. The Fair Work Commission was tasked with determining whether the existing clause adequately reflected the intent of the legislation and industry practices, particularly in light of recent legislative amendments and industry changes.

The central legal issues revolved around the interpretation of the redundancy clause in the award, its alignment with the Fair Work Act 2009, and the appropriate method for calculating long service leave entitlements for redundant employees. The applicant argued that the existing clause did not sufficiently account for the legislative changes and industry practices, leading to potential underpayments of long service leave. The respondent, on the other hand, maintained that the current clause was adequate and any changes should not be made without broader industry consultation.

The Fair Work Commission, after considering the submissions from both parties and relevant legislative and case law, concluded that the existing clause did not adequately reflect the legislative intent and industry practices. The Commission found that the calculation method for long service leave entitlements in the context of redundancy did not align with the statutory requirements and was not reflective of industry standards. The Commission ordered a variation to clause 14.4(c) to ensure that the award provisions were consistent with the Fair Work Act and industry practices, thereby ensuring fair and accurate calculation of long service leave entitlements for redundant employees.

Orders