Miner faces legal action over redundancy payouts

RIO TINTO is facing a legal challenge over claims it discriminated between union and non-union miners by giving workers on individual contracts up to $120,000 more in redundancy payments when it shut down a coalmine in central Queensland last year.

The dispute marks the latest instalment in a long-running effort by Rio Tinto to curb the influence of unions across its workforce.

The Construction, Forestry, Mining and Energy Union has accused the mining giant of discriminating between union and non-union members as it was preparing to close the Blair Athol coalmine last November. In a statement of claim filed in the New South Wales Federal Court, the CFMEU claims Rio Tinto breached four sections of the Fair Work Act by discriminating against members of an industrial association.

The union is seeking penalties against the mining giant and compensation for 29 members made redundant when the mine closed. It also wants any penalties imposed on Rio to be paid to the CFMEU. The matter is due to be heard in March before Justice Geoffrey Flick.

"Rio have attempted to penalise those workers that chose to remain on a collective agreement," said Alex Bukarica, the CFMEU's national legal officer.

Although redundancy payments "were in accordance with the collective agreement", Rio Tinto discriminated against one group of employees, he said.

A spokesman for Rio Tinto said employees at Blair Athol chose to work under the collective agreement or on individual arrangements. "Employees who chose to be on the collective agreement benefited from a number of secure working conditions and benefits over many years. Redundancy payments were made in accordance with the employee's conditions of employment, which Rio Tinto believes was fair," he said.

Rio Tinto decided in 2005 to close the 30-year old Blair Athol coalmine because it was reaching the end of its planned life. Coal for the site was becoming more costly to mine just as global prices for thermal coal were falling. The site employed between 140 and 170 people.

Union members received redundancy entitlements based on their base salary plus a "market allowance", the statement of claim said.

But workers on individual contracts got entitlements based on actual remuneration - including overtime, rostering allowances and superannuation - plus an extra three months' salary. The difference in payout is believed to be between $40,000 and $120,000 depending on salary and years of service.

Rio Tinto and the CFMEU have been fighting over wages and conditions at the Blair Athol mine for years and union members went on strike for 36 hours to protest the different redundancy payments shortly before the mine closed. The legal action started in late December 2012.