Illawarra Coal has failed to undertake "proper consultation" with workers after the company announced 85 mostly managerial positions would be made redundant on Tuesday, the union representing science, engineering and technical professionals says.
About half the positions made redundant were contractor roles, while the other half were permanent employees.
The move was phase two of an operational review begun in April, when 36 employee and contractor roles were made redundant.
Collieries Staff and Officials Association director Catherine Bolger said Illawarra Coal, a subsidiary of BHP Billiton, had failed to properly consult with staff during its review.
"We urge Illawarra Coal to explore the option of offering voluntary redundancies before any forced redundancies," she said.
"We call on Illawarra Coal to do the right thing by staff and work with them to reach better options for both staff and the business."
Illawarra Coal head of external affairs John Brannon said the decision had not been taken lightly.
"When these decisions are taken, they're obviously very difficult decisions, they affect a lot of people who work for us and their families," he said.
"[But] they are necessary. If we want to continue to operate, we need to be more cost effective and that's what this decision is all about."
The redundancies are the latest in a long list of recent job losses across the Illawarra's mining sector.
Coking coal prices have slumped to six-year lows. They peaked in mid-2011 at about $300 a tonne but have been trading at about $130 a tonne this year with challenging conditions.
Illawarra Coal president Troy McDonald blamed the job cuts on "difficult market conditions including continuing low coal prices and oversupply".
"The industry is also undergoing a difficult transition and to be globally competitive, the cost base of our operations must be reset."
Affected employees would be provided with support services and some would be eligible for a redundancy package or redeployment opportunities, Mr McDonald said.
Illawarra Coal employs about 2000 people including contractors.