[2015] FWCFB 2192


Fair Work Act 2009

s.156 - 4 yearly review of modern awards

4 yearly review of modern awards


Coal industry



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):

[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 clause 14.4(c) in proposed clause 24.3(c). On 20 October 2014 the CFMEU and the Association of Professional Engineers, Scientists and Managers, Australia (APESMA) filed a joint submission which sought the deletion of the provision.

[3] On 25 July 2014 the APESMA made a complaint to the Australian Human Rights Commission (AHRC) pursuant to s.46PW(1)(d) of the Australian Human Rights Commission Act 1986 (AHRC Act). Section 46PW of the AHRC Act provides:

[4] The APESMA’s complaint was that two identified coal mining companies had in October 2013 terminated the employment of four of its members who were over the age of 60 on the ground of redundancy, but relying on clause 14.4(c) of the Award did not pay them the retrenchment benefits provided for in clause 14.4(a). The APESMA contended that this constituted age discrimination.

[5] In a letter dated 20 October 2014, the President of the AHRC referred the matter to the President of this Commission pursuant to s.46PW(3) on the basis that the acts complained about by the APESMA appeared to be discriminatory. The consideration and conclusion of the President of the AHRC as stated in this letter were as follows:

[6] The action required to be taken by this Commission upon receiving a referral under s.46PW of the AHRC Act is set out in s.161 of the FW Act, which provides:

[7] On 5 November 2014 the President of this Commission made directions that the award modernisation submission of the CFMEU and the APESMA concerning clause 14.4(c) of the Award and the referral from the President of the AHRC should be heard concurrently. The matters were referred to this Full Bench, and were the subject of a hearing on 16 February 2015.

[8] Separately from these matters, Centennial Northern Mining Services Pty Ltd applied to the Federal Court of Australia for a declaration that clause 30.8 of the Centennial Northern Mining Services Enterprise Agreement 2011 (Agreement) was lawful. Clause 30.8 of the Agreement is in terms identical to clause 14.4(c) of the Award. In the alternative, if the declaration was not granted, the company sought that the provisions in the Agreement conferring retrenchments pay benefits (clauses 30.6 and 30.7) be declared unlawful along with clause 30.8 on the basis that they together formed a single entitlement. This application was heard by the Federal Court (Buchanan J) on 9 February 2015, and the judgment was issued on 27 February 2015 (Centennial Mining Decision). 2 The Court rejected the company’s primary application for a declaration that clause 30.8 was lawful, and also rejected the alternative application that clauses 30.6, 30.7 and 30.8 together be declared unlawful.

Evidence and submissions

[9] The CFMEU and the APESMA submitted that clause 14.4(c) of the Award discriminated on the basis of age, and on that basis should be removed from the Award. The history of the award provision demonstrated, they contended, that the provision was originally made in circumstances where there was a standard coal mining industry retirement age of 60. That retirement age had been abandoned, and persons over 60 now worked in the coal mining industry. The clause was discriminatory on the basis of age because if a person over the age of 60 was made redundant, he or she would receive no retrenchment payment under clause 14.4 whereas a person under 60 with exactly the same length of service would receive a payment. The only distinguishing feature between them was age. Clause 14.4(c) was inconsistent with the modern awards objective in s.134 of the FW Act. The CFMEU and the APESMA also pointed to s.578, which requires the Commission, in performing its functions and exercising its powers, to take into account the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of, among other things, age.

[10] The CFMEU and the APESMA adduced evidence by way of a statement made by Catherine Bolger, the Director of the Collieries’ Staff Association of the APESMA. Ms Bolger was not required for cross-examination by any party. Ms Bolger gave evidence as to the following propositions:

[11] In its submissions the Coal Mining Industry Employer Group (CMIEG) pointed to s.153(1) of the FW Act, which requires that modern awards not include terms that discriminate against an employee because of or for reasons including, relevantly, age, and contended that clause 14.4(c) of the Award was not contrary to s.153. This provision, the CMIEG submitted, was concerned only with direct and not indirect discrimination, and referred to Shop, Distributive and Allied Employees Association v National Retailers Association. 3 The CMIEG pointed to the fact that clause 14.4(c) was introduced into the Award when it was made in the course of the award modernisation process with the consent of the CFMEU and the APESMA as part of an industry-specific redundancy scheme under s.141 of the FW Act. Clause 14.4(c), it was submitted, was an integral part of an industry-specific redundancy scheme that had been in place since 1983, and no proper merit case had been advanced for its removal. The provision was not directly discriminatory because it did not have a substantial and operative purpose of seeking to disadvantage employees by reason of their age; rather it had the different purpose of setting a reasonable limit on economic compensation paid upon retrenchment. The age of 60 was a reasonable reference point for that limit because at that age employees could immediately access their retirement benefits; as an example of this, under the AUSCOAL superannuation scheme:

[12] The CMIEG also referred to the fact that under superannuation legislation, superannuation may be accessed by an individual once that person reached their preservation age, which was from 55 to 60 depending on the year of birth, and retired. The retention of the cap in clause 14.4(c) was also supported by the Termination, Change and Redundancy Case 4 and the Redundancy Case5 which required that standard redundancy provisions ensure that severance payments not exceed the amount the employee would have received if employment had proceed to the employee’s normal retirement date.

[13] In the alternative, the CMIEG submitted that if it was found that s.153 did not permit clause 14.4(c), then the whole of clause 14 should be removed because clause 14.4(c) was an integral element in the redundancy scheme which was only permitted to be in the Award because of its industry-specific nature, that the redundancy scheme including clause 14.4(c) had been implemented with the consent and support of all the parties, the scheme did not constitute a proper safety net, and there should not be cherry-picking of the scheme in a way which resulted in it departing from its original form. The CMIEG also contended that there was no power under s.141(3)(a) of the FW Act to remove clause 14.4(c), because this did not involve varying the amount of any redundancy payment in the scheme. The CMIEG also made a further alternative submission that, if clause 14 was not removed in its entirety, a new limitation on payments should be introduced capping payments under clause 14.4 to 18 weeks’ pay.

[14] The CMIEG tendered a witness statement of Ms Hannah Martin, a lawyer employed by Ashurst Australia. Ms Martin was not required for cross-examination. She was provided with data from the Department of Natural Resources and Mines which was drawn from the Coal Mine Workers’ Health Scheme for the years 2009-2014 which she analysed. Her analysis showed, relevantly, that in 2009 5.5% of coal mine workers were aged 60 and over, and that for the subsequent years in the 2009-2014 period the corresponding figures were 3.1%, 3.3%, 3.2%, 3.4% and 4.3%.

[15] The CMIEG also tendered a witness statement made by Mr David Gunzburg, the principal of DGHR Services, a human resources consultancy, and a director on the board of Coal Services Pty Ltd. He was likewise not required for cross-examination. Mr Gunzburg provided data concerning the age profile of 953 employees who had been retrenched in the black coal mining industry over the last two years. That data showed that 10% of such employees were aged 60 years or over when retrenched, and a further 15% were in the 55-60 age range. He also provided further data concerning the age distribution of employee in the black coal mining industry in New South Wales, which showed that the proportion of employee 60 years of age or more had increased from 2.8% in 2007 to 4.7% in 2013.

The Centennial Mining Decision

[16] Subsequent to the hearing of this matter, the Centennial Mining Decision was delivered as earlier indicated. In that decision, Buchanan J dealt with the issue of alleged age discrimination as follows:

[17] In rejecting the applicant’s alternative claim in that matter to which we have earlier referred, namely that the entirety of the retrenchment pay provisions in the Agreement be declared unlawful if the age cap was found to be discriminatory, Buchanan J said:

[18] The CMIEG has filed an appeal against the Centennial Mining Decision on 19 March 2015, but the appeal does not seek to challenge Buchanan J’s conclusion concerning the lawfulness of the aged based cap on retrenchment pay in the Agreement.

Further submissions

[19] After the Centennial Mining Decision was delivered, we invited the parties to make further submissions concerning it. The CFMEU and the APESMA submitted that there was no relevant distinction between clause 14.4(c) of the Award and the enterprise agreement provisions considered in the Centennial Mining Decision such as to justify any different conclusion as to whether clause 14.4(c) was discriminatory. The result was that clause 14.4(c) was a provision that was not, under s.153(1), permitted to be contained in a modern award, and that consequently s.137 rendered it of no effect. In those circumstances, they submitted, clause 14.4(c) should be removed on the basis that it was ambiguous and/or uncertain.

[20] The CMIEG filed a submission in which it maintained its earlier position. In the alternative, it submitted that if the Commission were to reach the conclusion that it was not appropriate for clause 14.4(c) to remain in the Award, it sought to be heard further as to the appropriate variation to the Award.

[21] The Australian Industry Group (AIG) submitted that if, given the Centennial Mining Decision, the Commission determined that clause 14.4(c) could or should not remain in the Award, the appropriate course would be to allow the parties to enter into discussion in an attempt to agree upon an alternative form of cap of redundancy entitlements, and that if agreement could not be reached, a timetable for the filing of submissions and a hearing of that matter should be established.


Relevant statutory provision

[22] Section 139 of the FW Act identifies generally the matters about which terms may be included in modern awards. Redundancy pay is not one of those matters. However s.141 permits the inclusion of an “industry-specific redundancy scheme” in a modern award. Section 141 provides:

[23] Apart from a limited ability under s.55(4) for a modern award to include terms ancillary or incidental to the operation of (relevantly) the National Employment Standards (NES) redundancy pay entitlements, and under s.121(2) to include terms specifying situations other than those in s.121(1) where the NES redundancy entitlements are not payable, there is no other power to include terms in modern awards concerning redundancy pay.

[24] The FW Act contains requirements concerning terms which must not be included in modern awards. Section 153 prohibits discriminatory terms in modern awards as follows:

[25] Section 136(2)(a) provides that a modern award must not include terms that contravene Subdiv. D of Div.3 of Part 2-3 of the Act (in which s.153) is located. Section 137 then provides: “A term of a modern award has no effect to the extent that it contravenes section 136”. Thus, for relevant purposes, any modern award provision which discriminates against an employee because of, or for reasons including, the employee’s age has no effect.

[26] Section 134 establishes a general objective, the “modern awards objective”, which the Commission must ensure is achieved when it exercises its modern award function and powers. Section 134 provides:

[27] In addition, in performing any of its functions or exercising any of its powers (including in relation to modern awards), s.578(c) requires the Commission to take into account “the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

[28] In conducting a 4 yearly review of modern awards in accordance with s.156(1), the Commission is empowered by s.156(2)(b)(i) to make determinations varying modern awards. Outside of 4 yearly reviews, the Commission has the power to vary modern awards (except in relation to minimum wages and default fund terms) if it is satisfied that it is necessary to do so to achieve the modern awards objective. The Commission may also, under s.160(1), make a determination varying a modern award to “remove an ambiguity or uncertainty or to correct an error”.

History of the black coal mining industry redundancy scheme

[29] The scheme of redundancy payments in clause 14 of the Award has two elements: the severance payments provided for in clause 14.3, and the retrenchment payments provided for in clause 14.4. The severance payment entitlement has its origins in decisions of the Coal Industry Tribunal in 1973. The payment of that entitlement has never been limited by reason of the age of the redundancy employee.

[30] For employees in New South Wales and Queensland, the retrenchment payment entitlement was added by a decision of the Coal Industry Tribunal of 19 January 1983 6, and included the capping provision currently to be found in clause 14.4(c) of the Award. It appears, having regard to the evidence and submission in the matter that the rationale for the capping provision was to be found in the then-existing State legislative provisions which established a mandatory retirement age of 60 for coal miners and provided for the payment of pensions after that age.7 This statutory mandatory retirement age did not extend to colliery staff, who were permitted to work until the age of 65, but nonetheless an industry practice of retirement at 60 was recognised as applicable to them as well.8 In that context, the capping provision was determined to be necessary to ensure that no employee received more than he would have received had he remained at work until the statutory retirement age. In that decision the question of retrenchment benefits for employees over 60 did not arise because the statutory provisions referred to prohibited employment of persons over that age.

[31] The Coal Industry Tribunal’s decision to cap retrenchment payments by reference to the earnings an employee would have received had the employee not been retrenched and had worked to retirement was consistent with the standard redundancy provisions established by the Full Bench of the Australian Conciliation and Arbitration Commission in the 1984 Termination, Change and Redundancy Case. 9 In that case, the Full Bench said, in relation to the standard provisions it proposed to establish: “... we are of the opinion that where termination is within the context of an employee’s retirement, an employee should not be entitled to more than he/she would have earned if he/she had proceeded to normal retirement.”10 The standard provision which was ultimately determined in the supplementary Termination, Change and Redundancy Case11 was:

[32] The aged-based cap on retrenchment pay in the redundancy scheme for the coal mining industry (as contained in the then Coal Mining Industry (Production and Engineering) Consolidated Award 1997) was reviewed by the Australian Industrial Relations Commission (AIRC) in 2000 in the context of the requirement in item 51(7)(f) of Schedule 5 of the Workplace Relations and Other Legislation Amendment Act 1996 to determine whether it meant the criterion that (relevantly) “it does not contain provisions that discriminate against an employee because of, or for reasons including ... age...”. In a decision issued on 16 July 1999 12, the Commission (Harrison C) recorded that (ironically) the employers sought the deletion of the cap on the basis that it was discriminatory and its replacement by an overall cap on retrenchment pay equal to the amount payable after 20 years service, and that this was opposed by the CFMEU, which contended that the provision was not discriminatory.13 Commissioner Harrison found that the age cap was discriminatory and determined that it should be deleted, and directed the parties to confer on a replacement cap.14

[33] It appears that the parties did not agree upon a replacement cap, and the Commissioner did not ultimately order the deletion of the age cap. This led to an appeal by the employer on this issue (as well as other issues). In a decision issued on 18 May 2000, a Full Bench of the AIRC (Giudice J, President, Boulton J and Lawson C) 15 upheld the appeal, and in doing so observed that the Commissioner had not explained why he implicitly rejected a submission of the CFMEU that “the cap renders the operation of the retrenchment pay provision more equitable” in that “employees who are close to the end of their working lives should not receive a benefit on retrenchment which is larger in relative terms than that received by employees with a greater proportion of their working lives still ahead of them.” The Full Bench then referred the issue to Commissioner Wilks for re-determination. In a decision issued on 13 July 200016, Commissioner Wilks noted that the employers no longer pressed the submission that the age cap was discriminatory (except indirectly), and that they were supported in this approach by all the unions which appeared in the matter, including the CFMEU and the Australian Collieries Staff Association.17 The factual premise upon which the matter proceeded was stated by the union representatives to be as follows:

[34] Commissioner Wilks found that the provision was not directly discriminatory, and because there was a reasonable justification for it there was no need to consider whether it was indirectly discriminatory. His reasons were as follows:

[35] The retirement proviso to the standard award redundancy pay provisions was revisited by a Full Bench of the AIRC in the 2004 Redundancy Case 18 in the context of an application by the Australian Council of Trade Unions (ACTU) to have it removed and another application by the AIG to have the reference to “normal retirement date” changed to refer to the age of 65. The Full Bench rejected both applications and decided to retain the proviso in its existing form. Its reasons were as follows (underlining added):

[36] The statutory provisions mandating the retirement of coal miners at the age of 60 were progressively repealed in the light of community recognition (ultimately embodied in the Age Discrimination Act 2004 (Cth) and in State anti-discrimination legislation) that discrimination on the basis of age was no longer socially acceptable and should be eliminated. It is clear that by the time of the 2000 decision of Commissioner Wilks earlier referred to, there was no longer a mandatory retirement age of 60 in Queensland, although it remained an industry practice at that time. The last of the statutory provisions to be repealed was in New South Wales in 2006, by way of the Coal and Shale Mine Workers (Superannuation) Amendment Act 2006.

[37] When the award modernisation process took place in 2008-9 pursuant to Pt.10A of the Workplace Relations Act 1996, the existing coal industry award redundancy pay provisions, including the age cap, was incorporated as clause 14 of the Award as an industry-specific redundancy scheme by consent of all relevant parties, including the CFMEU and the APESMA. It is apparent from that time that it was no longer a requirement or a practice in the coal industry that retirement necessarily occur at the age of 60.

[38] The federal statutory entitlement to redundancy pay established as part of the NES in the FW Act (Pt.2-2 Div.11 Subdiv.B) does not contain any limitation on the amount payable by reference to retirement age. Because, as earlier discussed, redundancy pay is not a general matter about which there may be terms in a modern award, the large majority of modern awards do not contain provisions concerning redundancy pay but merely cross-refer to the NES provisions, and only a minority have different redundancy pay entitlements as a result of the incorporation of industry-specific redundancy schemes. The effective result of the inclusion of redundancy pay in the NES has therefore been that the retirement age limitation has ceased to be a standard redundancy provision.

Is clause 14.4(c) consistent with the modern awards objective?

[39] Having regard to this history, we consider that it is clear that clause 14.4(c) of the Award is not a provision which can legitimately form part of a “fair and relevant minimum safety net of terms and conditions” as required by the modern awards objective in s.134(1) of the FW Act. Taking into account the matters identified in paragraphs (a)-(h) of s.134, we have reached that conclusion for the following reasons:

Is clause 14.4(c) discriminatory?

[40] Additionally, we find that clause 14.4(c) is a term which discriminates directly against employees at or over the age of 60, as well as employees nearing 60, on the ground of their age. We consider that the reasoning and conclusion in the Centennial Mining Decision, with which we agree, are directly applicable to clause 14.4(c). We do not accept CMIEG’s submission that the substantive and operative purpose of clause 14.4(c) is not to treat someone adversely because of their age but rather to set a “reasonable limit” on economic compensation paid by reason of the retrenchment. The background history which we have earlier set out belies this, and the provision does not provide any “reasonable limit” in its operation. It may be accepted that it is common and legitimate for redundancy schemes, particularly those of a more generous nature, to be subject to a cap on the total payment to be made in respect of employees who have reached or surpassed a particular period of service. This is not, however, what clause 14.4(c) does. For example a person aged 50 who is retrenched after 30 years’ service is subject to no limitation upon his or her retrenchment pay and will receive 60 weeks’ retrenchment pay (in addition to 30 weeks’ severance pay). An employee aged 60 or over will receive no retrenchment pay whatsoever, regardless of the employee’s length of service. The difference in outcomes is only rationally explicable on the basis of age.

[41] The effect of this conclusion is that clause 14.4(c) is a provision which is not permitted to be included in a modern award under s.153(1), and therefore under s.137 has no effect. We do not of course have the power to make a binding declaration to that effect, but we are entitled to act on the basis of the conclusion we have reached in deciding whether or not to vary the Award to delete clause 14.4(c).

Variation of the Award

[42] We consider that the appropriate course, in the light of the conclusions we have reached, is to make a determination varying the Award to delete clause 14.4(c). Such a provision should never have been placed in the Award because at all times since the Award became effective on 1 January 2010 it was inconsistent with the modern awards objective in s.134(1) and offended s.153(1). The immediate removal of the provision will not have any adverse consequence for any employer bound by the Award, since the provision has in our opinion never had legal effect by virtue of s.137.

[43] Contrary to the submissions of the CMIEG, there are ample sources of power in the FW Act to remove clause 14.4(c): under our general power in s.156(2)(b)(i) to vary modern awards as part of the 4 yearly review, under the power in s.141(3)(a) to vary an industry-specific redundancy scheme to vary the amount of any redundancy payment in the scheme (which would necessarily occur by removal of the age cap), and under s.160(1) to correct the error of clause 14.4(c)’s inclusion in the Award.

[44] We do not consider that we have sufficient material before us to reach any conclusion that, by reason of the deletion of clause 14.4(c), clause 14 in its entirety should either be deleted in its entirety or modified to add a new limitation on the amount of retrenchment payments that is not discriminatory in nature. We would certainly need a very substantial merits case before us to be persuaded that we should, to borrow Buchanan J’s expression, “take the axe” to the whole redundancy pay scheme, and no case of that nature has been advanced before us. There may potentially be some merit in the proposition that a new limitation on retrenchment payments should be introduced to replace clause 14.4(c). Clause 14.4(c) did have the indirect effect of imposing a limitation on retrenchment payments of about 80 weeks (if one assumes a hypothetical minimum starting age of about 18), albeit that limitation operated in an unfair and discriminatory way for the reasons we have discussed. Arguably, in circumstances where the original consensual industry-specific redundancy scheme will now be altered to remove one of its starting-point features, a new cap upon what is a fairly generous scheme should be imposed in line with common industrial practice. However, to give proper consideration to this, we would need to have before us greater evidence as to a range of matters including the age profile and length of service of coal mine employees who have been made redundant, the typical circumstances they face on redundancy, and the cost impact on employers of the scheme.

[45] We will therefore grant liberty to apply to any party which wishes there to be any further variation to clause 14 of the Award as a consequence of the removal of clause 14.4(c). If the parties to the proceeding consider that there would be utility in convening a conference to discuss this issue further, we will make a member of this Full Bench available for this purpose.

[46] A separate determination [PR562586] to vary the Award to delete clause 14.4(c) will be issued in conjunction with this decision.

al of the Fair Work Commission with the memeber's signature.



I. Taylor SC and O. Fagir of counsel for the Construction, Forestry, Mining and Energy Union and the Association of Professional Engineers, Scientists and Managers, Australia.

Y. Shariff of counsel with H. Fairhall solicitor for the Coal Mining Industry Employer Group.

B. Ferguson for the Australian Industry Group.

Hearing details:



16 February.

Final written submissions:

19 March 2015 - The Construction, Forestry, Mining and Energy Union and the Association of Professional Engineers, Scientists and Managers, Australia

19 March 2015 - Coal Mining Industry Employer Group

19 March 2015 - Australian Industry Group

 1   MA000001

 2   Centennial Northern Mining Services Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 136

 3   (2012) 205 FCR 227 at [56]

 4   (1984) 9 IR 115 at 131

 5   (2004) 129 IR 155 at [159]-[168]

 6   Decision - Coal Mining Industry (Severance and Retrenchment Pay, New South Wales and Queensland), CR3132

 7   Coal and Oil Shale Mine Workers (Superannuation) Act 1941 (NSW), Pt.2 Div.1; Coal and Oil Shale Mine Workers (Pensions) Act 1941 (Qld); Coal Mine Workers Pensions Act 1942 (Vic)

 8   Decision - Coal Mining Industry (Staff, New South Wales, Queensland and Tasmania), 3 February 1983, CR3147 at pp.5, 6.

 9   (1984) 8 IR 34

 10   Ibid at 75

 11   (1984) 9 IR 115 at 131

 12   Print R4611

 13   Ibid at [61]-[66]

 14   Ibid at [67]-[69]

 15   S6142

 16   S8070

 17   Ibid at [6]-[10]

 18   (2004) 129 IR 155

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