Construction, Forestry, Mining & Energy Union v Anglo Coal (Drayton Management) Pty Ltd

The dispute before Street J of the Federal Court of Australia concerned the interpretation and application of provisions within the *Fair Work Act 2009* (Cth) relating to the calculation of redundancy pay entitlements. The parties involved were the Construction, Forestry, Mining & Energy Union (CFMMEU) and Anglo Coal (Drayton Management) Pty Ltd. The core of the disagreement centred on whether certain payments made to employees upon termination of employment, specifically those related to long service leave and annual leave, should be included when calculating the minimum redundancy pay required by the Act.

The primary legal issue before the Court was to determine the correct method for calculating redundancy pay under the *Fair Work Act 2009*, specifically whether payments in lieu of long service leave and accrued annual leave were to be considered part of an employee's "base rate of pay" for the purposes of calculating redundancy entitlements. This involved an examination of the definitions and operative provisions of the Act concerning minimum employment standards and termination payments.

Street J reasoned that the *Fair Work Act 2009* prescribes specific entitlements for redundancy pay, which are to be calculated based on an employee's "base rate of pay" as defined by the Act. The Court found that while long service leave and annual leave entitlements accrue over time and represent a form of deferred remuneration, payments made in lieu of these entitlements upon termination were not to be included in the calculation of redundancy pay. This interpretation was based on the specific wording of the relevant sections of the Act, which distinguish between wages and other entitlements such as leave. The Court concluded that the Act intended to provide a distinct redundancy payment separate from accrued leave entitlements, and that including these in the redundancy calculation would effectively result in a double counting of employee entitlements.

The Court ordered that the CFMMEU's application be dismissed, finding that Anglo Coal had correctly calculated redundancy payments by excluding payments in lieu of long service leave and accrued annual leave.