| FWCFB 2192|
|FAIR WORK COMMISSION|
4 yearly review of modern awards
Fair Work Act 2009
s.156 - 4 yearly review of modern awards
BLACK COAL MINING INDUSTRY AWARD 2010
VICE PRESIDENT HATCHER
SYDNEY,10 APRIL 2015
Variation of clause 14.4(c) of the Black Coal Mining Industry Award 2010 - redundancy.
Introduction and background
 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):
14.1 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.
. . .
14.6 Variation of retrenchment pay
. . .”
 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.
 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:
46PW Referral of discriminatory industrial instruments to the Fair Work Commission
(1) A complaint in writing alleging that a person has done a discriminatory act under an industrial instrument may be lodged with the Commission by:
. . .
(d) a trade union,on behalf of one or more of its members aggrieved by the act or on behalf of a class of its members aggrieved by the act.
(2) If the Commission receives a complaint under this section,the Commission must notify the President accordingly.
(3) If it appears to the President that the act is a discriminatory act,the President must refer the industrial instrument to the Fair Work Commission. However,the President need not refer the industrial instrument if the President is of the opinion that the complaint is frivolous,vexatious,misconceived or lacking in substance.
(4) If the President decides not to refer the industrial instrument,the President must give notice in writing of that decision to the complainant or each of the complainants,together with notice of the reasons for the decision.
(5) If the President refers the industrial instrument to the Fair Work Commission,the President must give notice in writing of the outcome of the referral to the complainant or each of the complainants.
(6) The President may obtain documents or information under section 46PI for the purposes of this section.
(7) In this section:
"discriminatory act under an industrial instrument"means an act that would be unlawful under:
(a) Part 4 of the Age Discrimination Act 2004;or
(b) Part 2 of the Disability Discrimination Act 1992;or
(c) Part II of the Sex Discrimination Act 1984;
but for the fact that the act was done in direct compliance with an industrial instrument.
(a) a fair work instrument (within the meaning of the Fair Work Act 2009);or
(b) a transitional instrument,or a Division 2B State instrument,(within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009).
(8) For the purposes of the definition of discriminatory act under an industrial instrument in subsection (7),the fact that an act is done in direct compliance with the industrial instrument does not of itself mean that the act is reasonable.
 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.
 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:
“On its face,clause 14.4(c) appears to provide for less favourable treatment of employees based on their age,in that an employee over 60 years of age who is made redundant is not entitled to retrenchment pay while an employee under 60 years of age made redundant at the same time is entitled to retrenchment pay.
I note there is jurisprudence of the AIRC to the effect that a similarly worded redundancy cap clause was not discriminatory (Re BHP Coal (unreported,AIRC,Wilks C,S8070,13 July 2000 and Re Metropolitan Daily Newspapers Redundancy Award 1996 (unreported,AIRC,Giudice J,S8526,25 July 2000). However,as observed by Lawler VP in Re Australian Catholic University Ltd  FWA 3693 these decisions were made almost 15 years ago in a context where compulsory retirement at 60 years was the practical reality in the coal mining industry. With the passage of the Age Discrimination Act 2004 and the abolition of the compulsory retirement age in the coal mining industry that position has now changed.
On the basis of the information before me at this time,it appears that the agreed act which is the subject of this complaint is a discriminatory act,in that it would be unlawful under Part 4 of the Age Discrimination Act 2004 but for the fact that it was [an] act was done in direct compliance with an industrial instrument.
I am therefore referring the Award to you.
I have notified the Association of my referral.”
 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:
161 Variation of modern award on referral by Australian Human Rights Commission
(1) The FWC must review a modern award if the award is referred to it under section 46PW of the Australian Human Rights Commission Act 1986 (which deals with discriminatory industrial instruments).
(2) The following are entitled to make submissions to the FWC for consideration in the review:
(a) if the referral relates to action that would be unlawful under Part 4 of the Age Discrimination Act 2004—the Age Discrimination Commissioner;
(b) if the referral relates to action that would be unlawful under Part 2 of the Disability Discrimination Act 1992—the Disability Discrimination Commissioner;
(c) if the referral relates to action that would be unlawful under Part II of the Sex Discrimination Act 1984—the Sex Discrimination Commissioner.
(3) If the FWC considers that the modern award reviewed requires a person to do an act that would be unlawful under any of the Acts referred to in subsection (2) (but for the fact that the act would be done in direct compliance with the modern award),the FWC must make a determination varying the modern award so that it no longer requires the person to do an act that would be so unlawful.
Note:Special criteria apply to changing coverage of modern awards (see section 163).
 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.
 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
 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.
 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:
●Upon a review of enterprise agreements in the coal mining industry,only a minority had aged-based caps on redundancy payments.
●In relation to members of the APESMA employed on common law contracts,most of those which contained any redundancy provisions at all did not have any aged-based caps on payments. A minority of them referred to the Award entitlement.
●An Australian Bureau of Statistics analysis published in 2011 showed that 5% of employees in coal mining in New South Wales were over the age of 60.
●An analysis of the membership of the Collieries’Staff Division of the APESMA showed that 11.5% of members were over the age of 60 and still working.
 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:
(a) members aged 60 could make tax free withdrawals from the Auscoal Fund;
(b) members aged 55 to 59 could make tax free withdrawals up to an amount of $185,000;
(c) members aged 55-60,depending upon year of birth,were if no longer employed able to access their superannuation funds;
(d) members aged 55 and over,if permanently retired,could invest in an account-based pension and receive a regular income;and
(e) members aged 55-65 and still working could withdraw from the Auscoal Fund by electing to receive their superannuation as a pre-retirement pension to supplement their income.
 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.
 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.
 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%.
 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
 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:
“ Until 30 June 2006 coal mine workers in New South Wales were obliged to retire from coal mining at the age of 60 years. Section 5(1) of the Coal and Oil Shale Mine Workers (Superannuation) Act 1941 (NSW) prohibited the employment of mine workers of or above the age of 60 years. The prohibition was removed by the Coal and Oil Shale Mine Workers (Superannuation) Amendment Act 2006 (NSW) (s 3,Sch 1 cl ).
 For so long as a coal mine worker could not work beyond the age of 60 years it was at least arguable that no discrimination would have been involved in a provision such as cl 30.8 of the Agreement. I do not need to consider further how any such argument might have been resolved.
 However,it is unarguable that cl 30.8 will have a dramatically different effect upon a long-serving employee retrenched at age 60 or over (for example) than one retrenched at less than that age. Leaving aside any debate at the margins about a progressive reduction in entitlement as age 60 is approached,the effect of cl 30.8 is stark from age 60 on:no retrenchment payment is available no matter what the length of service.
 The reason for that difference in outcome is the employee’s age. In my view,the conclusion is inescapable that the term of the Agreement having that effect (cl 30.8) is a discriminatory term (s 195 of the FW Act) and therefore an unlawful term (s 194(a) of the FW Act).”
 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:
“ On the other hand,I can see no reason why cll 30.6 or 30.7 are thereby affected. I do not accept the applicant’s submissions that:
68. ... clause 30.8 cannot be read in isolation from cll.30.6 and 30.7. These three clauses read together give rise to the single entitlement to “retrenchment pay”...
 The effect of accepting the applicant’s submissions would be to strip all other employees (in addition to those at present disadvantaged) of any entitlement to retrenchment pay in any circumstances. The appropriate course to take is to remove the unlawful discriminatory term,not take the axe to an entitlement which should not have been subject to a discriminatory limitation in the first place.”
 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.
 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.
 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.
 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
 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:
141 Industry-specific redundancy schemes
When can a modern award include an industry-specific redundancy scheme?
(1) A modern award may include an industry-specific redundancy scheme if the scheme was included in the award:
(a) in the award modernisation process;or
(b) in accordance with subsection (2).
Note:An employee to whom an industry-specific redundancy scheme in a modern award applies is not entitled to the redundancy entitlements in Subdivision B of Division 11 of Part 2-2.
Coverage of industry-specific redundancy schemes must not be extended
(a) a modern award includes an industry-specific redundancy scheme;and
(b) the FWC is making or varying another modern award under Division 4 or 5 so that it (rather than the modern award referred to in paragraph (a)) will cover some or all of the classes of employees who are covered by the scheme;
the FWC may include the scheme in that other modern award. However,the FWC must not extend the coverage of the scheme to classes of employees that it did not previously cover.
Varying industry-specific redundancy schemes
(3) The FWC may only vary an industry-specific redundancy scheme in a modern award under Division 4 or 5:
(a) by varying the amount of any redundancy payment in the scheme;or
(b) in accordance with a provision of Subdivision B of Division 5 (which deals with varying modern awards in some limited situations).
(4) In varying an industry-specific redundancy scheme as referred to in subsection (3),the FWC:
(a) must not extend the coverage of the scheme to classes of employees that it did not previously cover;and
(b) must retain the industry-specific character of the scheme.
Omitting industry-specific redundancy schemes
(5) The FWC may vary a modern award under Division 4 or 5 by omitting an industry-specific redundancy scheme from the award.
 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.
 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:
153 Terms that are discriminatory
Discriminatory terms must not be included
(1) A modern award must not include terms that discriminate against an employee because of,or for reasons including,the employee’s 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.
Certain terms are not discriminatory
(2) A term of a modern award does not discriminate against an employee:
(a) if the reason for the discrimination is the inherent requirements of the particular position held by the employee;or
(b) merely because it discriminates,in relation to employment of the employee as a member of the staff of an institution that is conducted in accordance with the doctrines,tenets,beliefs or teachings of a particular religion or creed:
(i) in good faith;and
(ii) to avoid injury to the religious susceptibilities of adherents of that religion or creed.
(3) A term of a modern award does not discriminate against an employee merely because it provides for minimum wages for:
(a) all junior employees,or a class of junior employees;or
(b) all employees with a disability,or a class of employees with a disability;or
(c) all employees to whom training arrangements apply,or a class of employees to whom training arrangements apply.
 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.
 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:
134 The modern awards objective
What is the modern awards objective?
(1) The FWC must ensure that modern awards,together with the National Employment Standards,provide a fair and relevant minimum safety net of terms and conditions,taking into account:
(a) relative living standards and the needs of the low paid;and
(b) the need to encourage collective bargaining;and
(c) the need to promote social inclusion through increased workforce participation;and
(d) the need to promote flexible modern work practices and the efficient and productive performance of work;and
(da) the need to provide additional remuneration for:
(i) employees working overtime;or
(ii) employees working unsocial,irregular or unpredictable hours;or
(iii) employees working on weekends or public holidays;or
(iv) employees working shifts;and
(e) the principle of equal remuneration for work of equal or comparable value;and
(f) the likely impact of any exercise of modern award powers on business,including on productivity,employment costs and the regulatory burden;and
(g) the need to ensure a simple,easy to understand,stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards;and
(h) the likely impact of any exercise of modern award powers on employment growth,inflation and the sustainability,performance and competitiveness of the national economy.
This is the modern awards objective.
When does the modern awards objective apply?
(2) The modern awards objective applies to the performance or exercise of the FWC’s modern award powers,which are:
(a) the FWC’s functions or powers under this Part;and
(b) the FWC’s functions or powers under Part 2-6,so far as they relate to modern award minimum wages.
Note:The FWC must also take into account the objects of this Act and any other applicable provisions. For example,if the FWC is setting,varying or revoking modern award minimum wages,the minimum wages objective also applies (see section 284).
 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.”
 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
 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.
 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.
 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:
“Provided that the severance payments shall not exceed the amount which the employee would have received if employment with the employer had proceeded to the employee’s normal retirement date.”
 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
 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:
“ Mr Wilson and Mr O’Sullivan supported the submissions of both Mr Longland and Mr Slevin and in Mr Wilson’s case,supplemented them by reference to the fact that the normal retiring age in the coal mining industry is 60 years. While the situation in New South Wales and Queensland differs in regard to statutory requirements,the practical situation remains the same in both states. That is,that the normal retiring age is 60 years.”
 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:
“ Clearly,the clause is applicable to all employees. There is no different formula applied to any employee on any of the bases which would be prohibited by the definition of direct discrimination. For example,if an employee retires at the “normal retiring age”of 60 years,he or she could not earn more than that. It follows therefore,that the clause is intended to avoid the potential for employees to obtain an unintended or “windfall”gain from being made redundant at a point where he or she is coincidentally nearer to the normal retirement age than another employee who,for no different reason is also made redundant,but may be much further from the normal retiring age of 60 years.
 Any differential in monetary entitlement is a function of the point in time at which the retrenchment occurs and is not based on some formula which relies upon the age of the individual concerned to differentiate directly. Accordingly,I find that the clause does not involve direct discrimination as described by the definition of it which I have set out above.
 Having now found that the clause does not involve direct discrimination,I turn to consider the clause in the context of the definition of indirect discrimination,also set out above.
. . .
 In relation to the second of those parts it is clear to me that,dependent upon the point in time at which an individual employee is retrenched,the quantum of retrenchment pay is affected. For example,an employee who is 58 years and 6 months of age and who has 30 years continuous service with a company would be entitled to 60 weeks retrenchment pay,while another employee who is 59 years of age and has the same amount of service with the company would only be entitled to 52 weeks retrenchment pay. This apparent discrimination is,as I have already said,not primarily caused by the clause but rather by the timing of the decision to retrench employees. Both of the employees in the example given above would not be entitled to any retrenchment pay at all if they had taken early retirement at age 55 or,alternatively,had worked on until the normal retirement age of 60 years. It is the fact of the redundancy which determines an employee’s entitlement,the clause merely ensures that no employee can receive more than he or she would have received if no redundancy had occurred at all. In my view,such a clause is,in all of the circumstances,reasonable.”
 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):
“ We have decided to reject the ACTU's claim to delete the retirement date limitation. In our view the current provision should be retained. The original purpose of the provision - to ensure that employees who are retrenched in reasonable proximity to their projected retirement date should not receive more than they would have earned had they remained employed until retirement - is still apposite. The principle underpinning the existing provision is sound. The amount of money paid to a retrenched employee by way of severance pay should not cause that individual to be better off than if they had never been retrenched.
 The ACTU did not seek to challenge the original rationale for including this restriction in the TCR standard clause. Rather,as we have noted,it argued that the provision ought to be removed because the concept of a normal retirement date will cease to have relevance. We do not find these arguments persuasive. It seems to us that despite the passage of age discrimination legislation,the concept of a normal retirement date will continue to be relevant where a particular occupation or industry continues to have a fixed retirement date.
 Where employees and employers agree in advance to a retirement date the principle underlying the current provision will also continue to be relevant. It is not uncommon for employees and employers to discuss and plan retirement dates in advance. Where they do so,the principle underlying the existing retirement age provision remains relevant - if the employee is retrenched before the agreed retirement date,severance pay should be capped so that the employee does not receive more than if the employee had worked through to the retirement date.
 Nor are we persuaded to amend the current retirement date limitation in the manner proposed by AiG. While the proposal has the virtue of clarity it seems to us that it erroneously assumes that 65 years of age is the common retirement age across federal awards. Further the proposed amendment does not seem to take into account the prospect that an employer and employee may agree on an earlier retirement date.
 We note AiG's concern that the existing provision has led to debate at the enterprise level with an attendant risk of unnecessary industrial action,but in our view such matters are best addressed on a case-by-case basis by way of dispute notification.
 We have decided to retain the retirement date limitation in its current form.”
 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.
 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.
 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?
 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:
(1) The original rationale for the provision,namely the existence of an industry retirement age of 60,no longer exists. The position now is therefore clearly distinguishable from that which existed at the time of the 2000 decision of Commissioner Wilks.
(2) The standard provision established by the 1984 Termination,Change and Redundancy Case capping redundancy payments by reference to an employee’s normal retirement date has effectively been abolished. In any event the clause does not have any rational connection with the individual retirement dates of redundancy employees such as to serve the purpose of preventing a windfall gain upon redundancy to an employee about to retire.
(3) The employment of persons over the age of 60 is now an established feature of the coal mining industry. The effect of clause 14.4(c) is to deny such employees any retrenchment pay upon being made redundant in circumstances where younger employees made redundant in identical circumstances may receive a substantial retrenchment payment. Clause 14.4(c) therefore operates in a way which is clearly unfair.
(4) The effect of clause 14.4(c) is likely to discourage greater participation in the coal mining workforce by employees over the age of 60,directly contrary to the need identified in s.134(1)(c) to “promote social inclusion through increased workforce participation”.
(5) There is no alternative rationale for the retention of clause 14.4(c). We reject the submission of the CMIEG that the accessibility of superannuation benefits forms any sort of retrospective justification for the provision. That submission itself demonstrates that the requirements for access to superannuation and associated tax concessions vary over the age span of 55 to 65,so that the age of 60 is not of talismanic significance. Further,that submission is predicated on the inherently ageist assumption that a person aged over 60 who is retrenched will necessarily go into retirement rather than seek further employment.
Is clause 14.4(c) discriminatory?
 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.
 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
 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.
 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.
 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.
 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.
 A separate determination [PR562586] to vary the Award to delete clause 14.4(c) will be issued in conjunction with this decision.
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.
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
2 Centennial Northern Mining Services Pty Ltd v Construction,Forestry,Mining and Energy Union (No 2)  FCA 136
3 (2012) 205 FCR 227 at 
4 (1984) 9 IR 115 at 131
5 (2004) 129 IR 155 at -
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 -
14 Ibid at -
17 Ibid at -
18 (2004) 129 IR 155
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