Peabody repaid $4.98m to 197 coal workers, then signed a Fair Work undertaking instead of facing court

A United States owned coal producer has repaid $4,982,070 to 197 former Australian mine workers and, on 6 August 2026, signed an enforceable undertaking with the Fair Work Ombudsman rather than face court. Peabody Energy Australia Coal Pty Ltd, a wholly owned subsidiary of Peabody Energy Corporation, underpaid those workers between January 2016 and April 2023 across 14 black coal mine sites in Queensland and New South Wales. The total includes $988,568 in interest and $20,511 in superannuation.

The money was owed because of a single misreading of an award. Under the Black Coal Mining Industry Award 2010, and its 2020 successor, an employee holding more than 70 hours of accrued but untaken personal or carer's leave who is retrenched must be paid that leave out. Peabody did not pay it. The company also failed to pay the allowance component of wages on accrued and outstanding annual leave for redundant employees, and the allowance component for their termination notice period. Peabody admitted to the regulator that it had mistakenly believed the leave entitlement was not due under the award.

That belief had already been tested and rejected. In Association of Professional Engineers, Scientists and Managers Australia v Peabody Energy Australia Coal Pty Ltd [2022] FCA 945, delivered by Justice Wigney on 17 August 2022, the company argued the award did not apply because the workers were high income employees under section 329 of the Fair Work Act 2009. Its case rested on annual remuneration clauses in the employment contracts that exceeded the high income threshold. Wigney J held those clauses were not a guarantee of annual earnings within sections 330 and 331. A guarantee required something more than a promise to pay a salary: an undertaking given by the employer and accepted by the employee, notice of the consequence that the award would cease to apply, and a guaranteed period with an identifiable end date. The award therefore applied, and Peabody had contravened section 45 of the Act.

The proceedings, filed as NSD 753 of 2020 and NSD 1388 of 2020, were settled and discontinued before relief was determined. Peabody then ran its own remediation across former employees who were not parties to the case, applying the principles in the judgment, and self reported to the Fair Work Ombudsman in May 2023. The undertaking published on 6 August 2026 closes that file, more than three years after the self report.

The losses were unevenly spread. The heaviest was at North Goonyella in Queensland, where 45 workers were underpaid more than $1.4 million before interest and superannuation. Coppabella accounted for more than $562,700 across 28 workers and Millennium for more than $535,000 across 31. The worst affected New South Wales site was North Wambo, at more than $452,000 for 24 workers. Region Illawarra reported on 11 August 2026 that workers at Peabody's Metropolitan Colliery at Helensburgh were among those repaid. Individual back payments ranged from $272 to $91,013, excluding interest and superannuation. Almost all of those underpaid worked full time, in supervision, administration, production, warehousing, surveying, purchasing, geology and engineering roles.

An enforceable undertaking is not a penalty. The Fair Work Ombudsman's own guidance describes it as a written agreement used instead of taking an employer to court, made under section 715 of the Fair Work Act and enforceable by court application if its terms are broken. Peabody's undertaking requires a $50,000 contrition payment to the Cleaning Accountability Framework, a not for profit body working on conditions in property cleaning, plus an independent compliance audit, a joint consultative committee to monitor industrial instruments and disputes, quarterly reports to the company's corporate governance committee on entitlement complaints, and reporting to the regulator on systemic or significant underpayment issues. Fair Work Ombudsman Anna Booth said checking compliance was an important cornerstone of ensuring employees receive what they are owed.

The sum is large but not exceptional. The regulator recovered $358 million for more than 249,000 workers in 2024 to 2025, taking five year recoveries past $2 billion, and entered eight enforceable undertakings covering $47 million in back payments in that year alone. Its record court penalty in the same period, $15.3 million against the operators of Sushi Bay outlets, followed underpayments of just over $650,000, a ratio Peabody will not face.

What is not known is how far the same exposure runs. Wigney J's reasoning applies to any employer that assumed a high salary alone lifts a worker out of an award, and the regulator has not said whether it has looked beyond Peabody. It has not explained the gap between the May 2023 self report and the August 2026 undertaking, nor published what the independent audit must cover or when it reports. No statement from Peabody appears in the regulator's release or in the trade coverage. Whether the amounts the company calculated for each of the 197 were correct will now never be tested by a court.