C2001/1837, Transcript of Proceedings [2001] AIRCTrans 767 (3 May 2001)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT DUNCAN

C2001/1837

FINANCE SECTOR UNION OF AUSTRALIA

AND

COMMONWEALTH BANK OF AUSTRALIA

APPLICATION UNDER SECTION 170GB OF THE ACT
RE ALLEGED FAILURE BY THE CBA TO CONSULT WITH
UNIONS

C2001/1838

FINANCE SECTOR UNION OF AUSTRALIA

AND

COMMONWEALTH BANK OF AUSTRALIA

APPLICATION UNDER SECTION 170FB OF THE ACT
RE PROPOSED REDUNDANCIES

SYDNEY

10.45 AM, THURSDAY, 12 APRIL 2001

HEARING CONTINUING

PN1

THE SENIOR DEPUTY PRESIDENT: Could I have appearances, please?

PN2

MR S. PENNING: With leave for the Finance Sector Union of Australia and with me is MS R. KEOGH from the union.

PN3

MR P. HILL: I appear for the Commonwealth Bank and Colonial Services and with me I have MR N. ELVIN and MS S. SANDERSON and I have no objection to the leave sought by my friend.

PN4

THE SENIOR DEPUTY PRESIDENT: Very well, thank you, Mr Hill. Leave is granted Mr Penning. Before you start anything at all, I might indicate that it's my intention, I'll be guided by the parties, however, to hear you relatively briefly on the problem as you each see it and move into conference in an endeavour to see whether or not there can be something arranged that meets the requirement of people. I know nothing about the merits of the matter at the moment so that course may be fruitful. I'd certainly like to try it if the parties will come with me.

PN5

MR PENNING: Yes, your Honour. Your Honour, I've provided my friend, although only very shortly prior to the commencement of the proceeding this morning with several documents which I'd also propose to hand up and tender if that's appropriate in the proceedings and I believe that might assist identify what the issues are and the basis for the request for urgency in the application. The first document is a short outline of submission for the Finance Sector Union and the second of the documents is a folder of material which contains various correspondence, award and agreement provisions that are applicable to the employees affected, a list of authorities upon which we would propose to rely and initial statements or material obtained from affected employees.

PN6

THE SENIOR DEPUTY PRESIDENT: That's fairly substantial. What I'll do is mark them all for identification so we can track them down. Some of the things, of course, would be marked fully. The outline of submissions would, for example, but some of the statements would naturally be subject to further examination by the Bank. So I'll mark them all for identification. The outline of submissions for the FSU I mark FSU1I.

MFI #FSU1I OUTLINE OF SUBMISSIONS OF MR PENNING

PN7

THE SENIOR DEPUTY PRESIDENT: The other is a single exhibit, is it not, Mr Penning?

PN8

MR PENNING: Yes, your Honour, the folder.

PN9

THE SENIOR DEPUTY PRESIDENT: It's the folder.

PN10

MR PENNING: Yes.

PN11

THE SENIOR DEPUTY PRESIDENT: It contains all those things you've itemised but I think if I simply mark it for identification as exhibit FSU2I that will suffice for the present time.

MFI #FSU2I FOLDER

PN12

MR PENNING: While we're doing that I might also hand up, and I suppose this is equivalent to filing a document although I note that it is not sworn at this stage, a witness statement of Rosemary Keogh as an appropriate juncture we propose to rely upon in the proceedings.

PN13

THE SENIOR DEPUTY PRESIDENT: I'll do the same as I have with everything else, so I will mark it for identification. The witness statement of Rosemary Keogh is marked FSU3I.

MFI #FSU3I WITNESS STATEMENT OF ROSEMARY KEOGH

PN14

THE SENIOR DEPUTY PRESIDENT: Yes.

PN15

MR PENNING: Briefly, your Honour, if I could turn to the outline of the submission. I have indicated in the first paragraph that we seek to have the two applications which are before the Commission, that is the application made pursuant to section 170FB for an order under section 170FA, and an application pursuant to section 170GB for an order under section 170GA heard and determined either jointly or concurrently. I have indicated that there are the same parties involved, substantially the same subject matter involved and substantially the same orders that are sought.

PN16

THE SENIOR DEPUTY PRESIDENT: Yes, well I should deal with that now I think because everything else in your submission will be going to both. Do you have any objection to the matters being joined, Mr Hill?

PN17

MR HILL: No, I don't, your Honour.

PN18

THE SENIOR DEPUTY PRESIDENT: Very well, then, I will have that second matter called and we'll formally join it to the one that has already been called.

PN19

MR PENNING: Thank you.

PN20

THE SENIOR DEPUTY PRESIDENT: I am joining the most recently called matter which is C2001/1837 with the matter originally called C2001/1838. Yes, Mr Penning?

PN21

MR PENNING: Your Honour, the applications arise from significant planned reductions in the number of employees of the Commonwealth Bank of Australia and Colonial entities that arise from decisions taken to merge the Colonial entities into the Commonwealth Bank. There has been an estimate made and published by the Commonwealth Bank to the effect that ultimately between 2500 and 2700 or 2750 employees may be retrenched either voluntarily or involuntarily as a result of the merger of Colonial into the Commonwealth Bank and support for that number of potentially affected staff is contained in a document that's behind tab 8 of the folder of material that's been filed and marked FSU2I.

PN22

I've given a reference for that, your Honour. It's probably not necessary to take the Commission to it in respect of the number of people affected. That document was initially issued in April 2000. Subsequently the union sought consultations with the Bank as to the process that was going to occur for the reorganisation of the two organisations. Those initial requests by the union to be involved in discussions with the Bank were rebuffed and at an appropriate point I can tender correspondence that relates to that initial application or that initial request by the union to the Bank.

PN23

The urgency of the matter that's currently before the Commission, however, arises from different circumstances and I've outlined those circumstances at subparagraphs (3)(a), (b), (c) and (d) of paragraph 3 and those are briefly, your Honour. That it's only come to the FSUs attention in March that the Bank has begun a process of telling employees that they are displaced from positions that they previously held. Those employees having been told that they've been displaced from a position that they held have subsequently received letters from the Bank telling them or advising them that they have been displaced and telling them that they've been put into a pool called an unplaced person pool or a surplus pool.

PN24

The important point is that these employees were employees of the Commonwealth Bank, remain employees of the Commonwealth Bank and in most instances held positions within the Commonwealth Bank that had been advertised, that they'd applied for and that they'd been appointed to and there was no suggestion at any time that they were being displaced from those positions because of inadequate performance or some other unsatisfactory conduct.

PN25

In subparagraph (b) of paragraph 3 the employees in various circumstances have been told that there is the potential of involuntary retrenchment that could become effective as early as 23 April 2001 and I've given some reference there to where that material is contained in the folder of the material and that is also referred to and we can come to it in due course in the written statement of Ms Keogh. So we say from that that there is an urgency in this matter which has suddenly arisen which was certainly not clear to the union certainly prior to early March 2001.

PN26

In subparagraph (c) I've referred to some of the material that's contained in the correspondence from various area managers of the Commonwealth Bank to employees who are potentially affected by this displacement and potential involuntary redundancy. They're short letters and they're generally of a proforma nature. They particularly focus on the fact that:

PN27

Should it become evident during the course of your attachment to an area, ...(reads)... vacant position during or at the conclusion of the project, retrenchment may be an option that we need to consider.

PN28

and I can go to those documents in due course and they're in material that's before the Commission as an MFI.

PN29

Finally as a basis for urgency of the matter being dealt with, there's a reference in subparagraph (d) to material that's just come to the union's attention very recently that in some circumstances there appears to be improper or undue pressure that's being placed on certain employees to agree to accept a retrenchment on the basis that it's a voluntary as opposed at this stage to a involuntary retrenchment process.

PN30

At paragraph 4 I've indicated the evidence that we rely upon in pursuing the matter. That would principally be the evidence of Ms Keogh, who as you may be aware, your Honour, is a Senior Industrial Officer attached to the Commonwealth Bank offices section of the Finance Sector Union and has worked for that organisation for approximately 20 years and who, together with Mr Peter Riordan, the Assistant National Secretary of the union, has had principal carriage of this issue with the Commonwealth Bank.

PN31

In paragraphs 5 and 6 of the outline, I've indicated that to the union's knowledge there is, and this would be our submission that there is not an available alternative mechanism which can deal with the requirements or provide a mechanism to deal with the requirements of article 13 of the termination of employment convention other than the orders that we've sought. That article which is at schedule 10 of the act principally relates to the provision by an employer where the employer is contemplating terminations for reasons including economic, structural or of a similar nature and we say those are the exact circumstances of the terminations arising in this instance, that the employer will provide certain information to the workers representatives. That information which is to be provided to workers representatives is contained in subparagraph (a)(i) of article 13.

PN32

THE SENIOR DEPUTY PRESIDENT: It's replicated more or less in the act.

PN33

MR PENNING: It is although it's perhaps in some slight level of graded detail in the convention but it's principally that information that's sought by the application pursuant to section 170FB and that information has not been provided by the Bank voluntarily and there's no indication that the Bank has any intention of providing that information voluntarily. That information is really quite basic which includes the reasons for the terminations contemplated, that is the particular reasons for terminations contemplated of individuals and most importantly the number and categories of workers likely to be affected and the period over which the terminations are intended to be carried out.

PN34

In relation to that, your Honour, we would submit that the Bank by this stage would well and truly know what that information is. It could provide it if it was so ordered. It to date has chosen and apparently deliberately so not to provide that information. So the union for example was taken unawares by the advice provided to its members that they would be or had been displaced. It's unaware of any details relating to the total number of positions of persons who have been provided or have been so advised by the Bank. It's unaware of the redeployment options that the Bank is looking at for particular individuals and of the options that those employees who have been displaced from positions they previously held face.

PN35

So that's the principle purpose of the first application. That's the application pursuant to section 170FB and going onto subparagraph (b) of paragraph 1 of article 13, that then provides that having been provided with that basic information about where the terminations or restructuring is likely to occur, that there's then a proper opportunity provided for measures for consultation between the Bank and the FSU on measures to be taken to avert or to minimise the terminations and measures to mitigate the adverse affects of any terminations on the workers concerned and that includes finding alternative employment.

PN36

What's sought in the orders, your Honour, is a proper system for that process of negotiation to occur. In relation to paragraph 6 of the outline, it's our submission that there is no alternative remedy that is readily available under other Commonwealth or State law to provide an alternative remedy to that which is sought and that submission is made in satisfaction, we say, of section 170GC of the Act where an order is sought under section 170GB. We say further that there are good public interest grounds as to why the Commission would intervene in this matter and grant the orders that are sought in the two applications which I've previously indicated substantially mirror each other.

PN37

Your Honour, that's an outline of what the basis of the applications are and it's an outline or an indication, we say, of why there is an urgency in the matter. I haven't at all sought to take the Commission to any of the detail that's contained in the documentation behind tab 5 of the bundle of material that's been filed and it probably isn't necessary nor appropriate for me to do that in an outline. That would be covered through, we would hope, the witness evidence of Rosemary Keogh.

PN38

THE SENIOR DEPUTY PRESIDENT: Very well, thanks, Mr Penning. Yes, Mr Hill?

PN39

MR HILL: Your Honour, the applications that are brought by the union today are grounded in section 170FA article 13 and 170GA and the building blocks of those applications are that an employer has failed to consult where it has decided to terminate 15 or more employees. I know your Honour is very familiar with those provisions having had other matters before your Honour previously around these sections.

PN40

Now apart from the sweeping statements we've heard from the bar table this morning concerning an allegation that the banks failed to consult the applications themselves are devoid of any allegation conspicuously in fact of any factual ground which alleges that we have in fact failed to consult.

PN41

Your Honour, the grounds in both applications seek to focus on the FSU disagreeing with the selection process adopted by the bank, not a failure to consult, which necessarily must ground the application under the sections which they proceed under this morning. But the reason why your Honour, in my submission, why this factual ground is not pleaded is because the allegation of the failure to consult cannot be substantiated.

PN42

The case for the bank your Honour is that there has been some very real and concrete discussion with the FSU across customer service division over the past six months concerning the merger, and at that point I would like to hand up a document your Honour to mark for identification which represents a chronology, your Honour.

PN43

THE SENIOR DEPUTY PRESIDENT: Before you take it any further I will mark it for identification. I mark the document entitled, Chronology of consultation with FSU and the Commonwealth Bank, Customer Service Division regarding Colonial/CBA Integration exhibit CBA1I.

MFI #CBA1I CHRONOLOGY OF CONSULTATION WITH FSU AND COMMONWEALTH BANK CUSTOMER SERVICE DIVISION COLONIAL/CBA INTEGRATION

PN44

MR HILL: Thank you. Now your Honour this chronology provides a summary of consultation with the union over the past six months in respect to the restructure of area offices and the integration of Colonial and CBA areas which is the focus of this application, and your Honour will see as early as 15 September, and your Honour will recall that there was a rather premature and ill fated application made I think it was in July of last year under similar provisions that came before yourself and it was about two days after we actually took over Colonial. The real consultation gets under way in September and it was a meeting with Mr Riordan and Ms Keogh and there was an overview provided by the bank of the area restructure.

PN45

Your Honour, by 12 October detailed information was provided to the FSU in a letter dated 12 October and if your Honour will turn in about three pages there is a copy of a letter that was sent to the union for Ms Keogh from Mr Mason that provides certain numbers of positions. It also provides an organisation chart as well as other information that go to the bank's obligation under its EBA. The letter, and I make one correction your Honour, is written by Suroene Sanderson, industrial manager from CSD rather than Terry Mason who is the head of Human Resources for that division.

PN46

But the point is your Honour that by 12 October there was certainly a flow of information and there were certainly discussions ensuing. By 7 December your Honour will see that meetings at the national level were held and then further meetings were held on 2 February, an integration update was provided to the union, and at both the December and February meeting in concerns raised by the union they were addressed by the bank in those discussions.

PN47

Your Honour, at meetings at the State level, which took place on 5 March, you will observe from the chronology, if your Honour turns over, in Queensland, and on 7 March in Victoria, and the document speaks for itself at these dates around the information that was exchanged and I won't go any further but if the matter is progressed obviously there will be detailed evidence called in relation to those issues, to give your Honour an overview.

PN48

It is patently not the case that this process only crystallised in March of this year, it is patently not the case and we will be able to adduce evidence to indicate that it wasn't patently the case that only in March of this year was the union properly appraised as to what was actually happening. Your Honour, in short the engagement of the FSU over the merger since September of last year is hardly indicative of an employer that has failed to consult, which is the necessary ingredients of the application that is before you today.

PN49

I wonder your Honour just briefly could I take you to a document which I would seek to have marked for identification that deals with the integration process to give your Honour an understanding of really how this is being rolled out across the bank.

PN50

THE SENIOR DEPUTY PRESIDENT: I will mark the document entitled Integration process at CSD, exhibit CBA2I.

MFI #CBA2I DOCUMENT ENTITLED INTEGRATION PROCESS AT CSD

PN51

MR HILL: Thank you, your Honour. This document provides an overview of the integration process across CSD for your Honour's benefit and contains various attachments that sets out information regarding the bank's selection principles and integration steps and let me just speak to it quickly.

PN52

Shortly after the bank merged with Colonial in the middle of last year CSD in July created an integration team. By October 2000 you will see on the front page the bank had embarked on a restructure, an establishment of area offices, reducing the number from 89 to 71. Now this additionally involved the appointment of new area managers which were selected from both Colonial and CBA sites which was four months ahead of the branch amalgamation process. Now your Honour when I talk of the branch amalgamation process I'm talking of branches in Colonial and branches of CBA coming together and being rationalised under an amalgamation program.

PN53

THE SENIOR DEPUTY PRESIDENT: A physical change.

PN54

MR HILL: That's right. Now your Honour the branch amalgamation process commenced in Western Australia in January and since that time has flowed across to the eastern seaboard. The primary drivers for the bank on the people front was to keep involuntary job losses within the merged group to a minimum and that was consistent with the undertakings that were made to a number of regulatory authorities and regional communities and secondly to select the best people for Colonial and CBA on merit for the new merged group, they were the two primary drivers on the people front in respect to the merger and the work that went on bringing the two organisations together.

PN55

The selection process has involved both Colonial and CBA staff across the branch network being selected for new positions and some not being successful. The branch amalgamation process began in WA in January and many staff have been in their new positions for nearly three months. For staff that has been unsuccessful, and it is not just CBA staff, your Honour, and I note the application is CBA Century. There has also been Colonial employees that have not been successful in securing a job in the new merged group.

PN56

Now for both Colonial and CBA employees that have not been successful in obtaining a role they have been gainfully employed up to a maximum period of three months in an effort to exhaust every opportunity to find them employment within the merged group, and the whole purpose, like my friend refers to this notion of surplus pools, there is no pool as such, there is a group of individuals who have not been successful in obtaining roles in the new group and they are spread across the country but there is no reserve pool as such and those people, some have been involved in training, some have been involved, mostly involved in meaningful employment and the purpose behind that your Honour to have that period and have that opportunity was to see if we could give every effort to find those people jobs and that's the point. The point with the people that have been displaced and the reason why they've been kept on is exactly to fulfil our commitments that we've given to regulatory authorities and to the community at large in respect to minimising the number of involuntary redundancies.

PN57

In short, your Honour, our submission is that our process has been fair, transparent and in compliance with all undertakings given to the ACCC and regulatory authorities. Your Honour, it's anticipated that the final branch amalgamations will be completed by early May. At the present time and time of this application, the overwhelming majority of staff have been selected for positions, advised of this and formally offered roles.

PN58

The merger, your Honour, with the CBA with Colonial, it's the largest people integration exercise in Australia's corporate history. If the orders were granted as the union seeks, it would have serious implications for the merger. It would cause complete and absolute chaos and I can't put that too highly. This is certainly the case in respect to the orders in one and two that the union seek.

PN59

THE SENIOR DEPUTY PRESIDENT: One and two, just let me see what you mean.

PN60

MR HILL: One and two of each application, your Honour.

PN61

THE SENIOR DEPUTY PRESIDENT: I see.

PN62

MR HILL: Your Honour, the union has been aware of the Bank's amalgamation process for nearly six months because the consultative process and exchange of information across CSD began in September of last year. The application is now being made at the tail end of the process and they've been fully aware for some period of time of what's happening. It's not something that's just crystallised in March. The granting of relief, your Honour, is likely to in fact exacerbate rather than solve the problem.

PN63

It's not as if there have not been other opportunities for these applications to be agitated more formally earlier and the Commission has been involved in a raft of other things with the bank and so there's been plenty of opportunities in our submission, your Honour, for this to be agitated far earlier than at the 11th hour. The framework for the parties to resolve the issues, your Honour, lies in the EBA and the consultative mechanisms that those agreements provide.

PN64

The Bank is well ready and willing to continue to consult with the union under the EBA framework and indeed envisages continued consultation as it has done. Your Honour, the Bank is not opposed to conciliation this morning and indeed would comment that process and should the union wish to press the application, then it will need to be properly timetabled and witness evidence called. The Bank, your Honour, reserves any arguments it may have on jurisdiction.

PN65

At this stage, your Honour, we, as I said, commend the process of conciliation this morning. If the union decides to press with the application, then it would need to be properly set down and properly programmed, the filing of witness statements. I haven't had an opportunity, your Honour, to distil any of that material. I was only handed it this morning and all the more need to have the matter properly timetabled if it's to go further. If the Commission pleases.

PN66

THE SENIOR DEPUTY PRESIDENT: Very well. I'll go into conference.

OFF THE RECORD [11.17am]

RESUMES [12.15pm]

PN67

THE SENIOR DEPUTY PRESIDENT: The outcome of the conference which has just occurred is that I issue the following directions:

PN68

(1) That there be a discussion between the FSU and the CBA on the selection process for appointment and redundancy in the merger between CBA and Colonial. This discussion should cover: (i) individual cases and (ii) the general approach and information thereon.

PN69

(2) The matter is adjourned for a report back on Wednesday, 18 April next at 2.00 pm. Friday, 20 April is set aside for further hearing.

PN70

I adjourn the matter accordingly and the Commission indefinitely.

ADJOURNED UNTIL WEDNESDAY, 18 APRIL 2001 [12.16pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

MFI #FSU1I OUTLINE OF SUBMISSIONS OF MR PENNING PN7
MFI #FSU2I FOLDER PN12
MFI #FSU3I WITNESS STATEMENT OF ROSEMARY KEOGH PN14
MFI #CBA1I CHRONOLOGY OF CONSULTATION WITH FSU AND COMMONWEALTH BANK CUSTOMER SERVICE DIVISION COLONIAL/CBA INTEGRATION PN44
MFI #CBA2I DOCUMENT ENTITLED INTEGRATION PROCESS AT CSD PN51