A decision by Fair Work Australia to allow 154 workers at Xstrata’s Newlands coalmine in Queensland  to opt out of a collective union agreement in favour of common law contracts could have wider implications for future work relations cases.


In the latest decision, Senior Deputy President Jonathan Hamberger overturned a decision of December 2011 when he ruled that “the only obstacle to approval of the Newlands Coal Surface Operations Agreement 2010 was that I was not satisfied that the agreement passed the better off overall test.”


Responding to these concerns, Newlands Coal satisfied the Senior Deputy President with an undertaking that: in the event an employee elects to “opt out” of the Newlands Coal Surface Operations Agreement 2010 pursuant to clause 2.2, then that employee will receive pursuant to his or her common law contract of employment:

a) A Base Salary at least equal to the Base Salary for their employment level as provided for in Clause 9.1 of the Agreement; and

b) A Roster Allowance at least equal to the applicable Roster Allowance provided for in Clause 9.2 of the Agreement.’


Mr Hamberger noted that these rates “are significantly in excess of those contained in the Black Coal Mining Award 2010’.


Newlands also confirmed that prospective employees will not have their employment made conditional on agreeing to “opt out” of the Newlands Coal Surface Operations Agreement 2010.


“Employees will be given a free choice as to whether or not they wish to be covered by the Agreement.”


The agreement was approved, taking effect from 1 February, having met concerns regarding the ‘better off overall’ test.


The Fair Work Australia decision is available here.