Peabody Energy enters into EU worth almost $5m

Further to numerous cases of wage and entitlement underpayments, Peabody Energy Australia has become the latest company to sign an enforceable undertaking (EU) with the Fair Work Ombudsman (FWO) after conducting a remediation process in relation to earlier court proceedings.

The Australian coal producer and subsidiary of the US-based Peabody Energy Corporation originally faced a lawsuit from the Association of Professional Engineers, Scientists and Managers, Australia regarding allegations that the company failed to pay accrued personal leave and modern award entitlements to redundant staff.

It was determined that employees made redundant were entitled to be paid their accrued personal leave balance of 70 hours or more under the Black Coal Mining Industry Award 2010 and 2020.

While the 2022 judgment clarified the obligation and led to a settlement, the EU agreement was the result of a large and retrospective audit, which only recently concluded.

According to the FWO, the victims of underpayment were employed in supervision, administration, production, warehousing, surveying, purchasing, geology, and engineering capacities, among others, and almost all were full-time.

The employees worked across 14 mining sites in Queensland and NSW, with most affected employees working in North Goonyella, Coppabella, and Millennium in Queensland.

The back payments, which occurred between January 2016 and April 2023, totalled $4,982,070, including almost $1 million in interest and $20,511 in super. Individual payments ranged from $272 to $91,013 for the 197 affected workers.

According to Peabody, it was unaware that the personal leave-related benefit applied to employees under the award. However, it also failed to pay allowance of wages for accrued and outstanding annual leave, or for the termination notice period.

As part of the EU, the company will fulfil a $50,000 contrition payment to the Cleaning Accountability Framework and commit to improving compliance practices, including implementing new systems and processes, to ensure compliance with all award and Fair Work Act obligations.

Further, Peabody has agreed to convene a joint consultative committee, to report to the FWO on any underpayment complaints, and keep its corporate governance committee notified of compliance with a report of the outcome of its independent audit, as well as supplying quarterly reports on employee entitlement issues.

The workplace watchdog said the EU was established because of Peabody’s cooperation with its investigation, with FWO Anna Booth noting that employers are best placed when they proactively ensure compliance with legal obligations.

“We want employers to get it right in the first place,” she said.

“Checking compliance – as Peabody [has] 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.”

Ongoing coverage of enforceable undertakings has seen several in the university sector alone, with staff from CQUniversity, UNSW and Charles Darwin University receiving back payments over the last few months alone.

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