The Construction, Forestry, Mining and Energy Union said it had agreed to the settlement following a three-year court battle.

The cases, heard before the Australian Industrial Relations Commission since 1998, resulted in three separate decisions being handed down, all in favour of the CFMEU.

Rio Tinto, which owns 72.7% of Coal & Allied, appealed each decision, claiming the dismissals were justified and fair.

"These cases are a hangover from four years ago and many more years of litigation were likely before the entire matter would have been dealt with," Coal & Allied managing director Gary Goldberg said.

In return for the payout the former employees have dropped their claims to be reinstated.

"The company has made provision for these cases in its reported results and the settlement will not materially affect the company's performance going forward," Coal & Allied said.