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Australian Industrial Relations Commission Transcripts |
AUSCRIPT PTY LTD
ABN 76 082 664 220
Level 4, 60-70 Elizabeth St SYDNEY NSW 2000
DX1344 Sydney Tel:(02) 9238-6500 Fax:(02) 9238-6533
TRANSCRIPT OF PROCEEDINGS
AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION
SENIOR DEPUTY PRESIDENT DUNCAN
C2001/2972
C2001/4079
AG2001/3823
COLONIAL GROUP ENTERPRISE AWARD 1996
Application under section 113 of the Act
by Colonial Mutual Life Society Limited
to vary the above award re the addition
of clause 21(i) re redundancy
COLONIAL RETAIL NETWORK MULTI-SITE
FRANCHISE INTERIM AWARD 2000
Application under section 113 of the Act
by ACN 080 159 762 Pty Limited to vary
the above award re redundancy, retrenchment
and severance pay
APPLICATION FOR VARIATION OF
CERTIFIED AGREEMENT TO REMOVE
AMBIGUITY
Application under section 170MD(6) of the Act
by Colonial Services Pty Limited
re Colonial Group Enterprise Agreement 1999
SYDNEY
10.34 AM, THURSDAY, 2 MAY 2002
Continued from 1.5.02
PN2091
PN2092
MR DOUGLAS: Mr Pritchard, could you provide for the record, your full name and address please?---Yes, Kenneth John Pritchard, 10 Coniston Street, Wheeler Heights.
PN2093
Thank you. Now, your Honour, I think we faxed last night an amended statement from Mr Pritchard to you and supplied that to my friends. Does your Honour have a copy of that?
PN2094
THE SENIOR DEPUTY PRESIDENT: Yes I do, Mr Douglas.
PN2095
MR DOUGLAS: Do you have a copy of the amended statement?---I do.
PN2096
There was an original statement that was prepared with respect to your evidence and subsequently an amended statement?---I do.
PN2097
The amended statement - are the matters dealt with in the statements made in that document true and correct?---Yes, they are.
PN2098
Yes. We take it that the attachments to your original statement are attachments to that amended statement?---That's correct.
PN2099
I would tender that, your Honour.
PN2100
THE SENIOR DEPUTY PRESIDENT: Very well. Any objection?
PN2101
MR LAWRENCE: No objection.
PN2102
MR DOUGLAS: I would provide your Honour with a clean version of the faxed document. This one doesn't have the revision passages in it.
**** KENNETH JOHN PRITCHARD XN MR DOUGLAS
PN2103
THE SENIOR DEPUTY PRESIDENT: I'm sorry, I don't quite understand that.
PN2104
MR DOUGLAS: The original one that was faxed, your Honour, was the original statement with various words having a line drawn through them and different words in their place.
PN2105
THE SENIOR DEPUTY PRESIDENT: I see, the one that has been filed absorbs those and is clean.
PN2106
PN2107
MR DOUGLAS: Just a couple of questions, Mr Pritchard. In relation to the outsourcing of Colonial's IT function to EDS, which we have been told was, in essence, an extension of the 1997 CBA EDS contract. Was it important and if so, for what reasons, for as many of the Colonial IT employees to transition across to EDS as part of that outsourcing?---In '97 obviously when we transitioned to EDS, we were transitioning a very large institution IT shop and there are a very large number of employees that were transitioned at the time and they made up - EDS at the time did not have a financial industry systems presence, it was largely other industries. When we did the transition to - of the Colonial people - to EDS, it was consistent with our strategy to not deal with IT processing as one of our core competencies and it was consistent with that that the Colonial IT would be transitioned to EDS. In relation to the people as part of the transition, it was important to us that we had the right level of skills and intellectual property to enable those systems and processes and technologies to be transitioned and of the - - -
**** KENNETH JOHN PRITCHARD XN MR DOUGLAS
PN2108
You mean the right level of skills and knowledge going across to EDS?---Exactly.
PN2109
Yes?---Now a lot of those skills were not of the higher level but there was a core component of the people that were being transitioned that had specific skills that were necessary in an ongoing sense.
PN2110
In terms of percentage terms, can you give us a ballpark figure, having in mind the group of 370 odd that had offers made to them?---Yes, as part of our investigations when we dealt with Colonial IT, the numbers are not exact but it is in my recollection of somewhere between 10 to 15 per cent of that total number across the broad numbers of systems, would have been seen as critical resources.
PN2111
What about as to the remainder of the group of 370? Was it important and if so, why, that those people should transition to EDS, in the bank's view?---From our perspective, it was at the very outset, it was our intention to transition all of the IT staff for two reasons, continuity of employment and secondly, obviously as EDS were a growing company and we were part of a - we had equity in the EDS group, EDS Australia, it was important that we actually provided ongoing opportunities in an employment sense for those people and that was consistent with our strategy for Colonial and consistent with a strategy that we adopted in '97 when we transitioned our CBA IT staff to EDS.
PN2112
What is the CBAs equity position in EDS?---Thirty five per cent.
PN2113
And as part of the transitioning, the position that EDS adopted with respect to the transitioning employees, was that precisely known to them as to the nature of skills and so on that the employees had or what was the position that they took up?---EDS took a risk position in relation to transition as they did in '97 where they took the bona fides of Colonial IT assessment of what those people did and what their skill sets were and they were quite comfortable in taking the people on, on the basis of what was portrayed to them. They did acknowledge,
**** KENNETH JOHN PRITCHARD XN MR DOUGLAS
in relation to placement, that they would work with the transition employees to make sure that their skill sets were commensurate with the activities they needed to do, they were doing the up-skilling that was necessary and they would develop development plans to enable them to grow as part of the EDS organisation. Their intent also was to take all of their people on because they had, across Australia, a number of other accounts that they saw that IT staff could be used so that was an opportunity for them as well.
PN2114
Now the people who went to EDS came out of CSL, Colonial Services Limited, is that the position?---Yes.
PN2115
Subsequent to the takeover of the Colonial group by CBA, are you able to indicate in round terms - well tell his Honour whether any other Colonial Services employees has transitioned, not to EDS but to the Commonwealth Bank and, if so, in round terms approximately how many?---Certainly. With the acquisition of Colonial, Colonial actually brought a number of different businesses and skill sets into our organisation that we needed to obviously have as many of those skill sets maintained, but there were approximately 2000 employees that have accepted Commonwealth Bank offers under Commonwealth Bank conditions from Colonial Services into the bank and the financial services arms of our business.
PN2116
And are there still employees in CSL who may at some time in the future come across to the bank?---Yes, there are. If we take Colonial First State Investments, that is a specific part of our business that has very strong skill sets and very key people. They still maintain current Colonial CSL terms and conditions and remuneration packages. There are also - and there is about 600 of those and they are maintained. On the other in our processing areas, we have approximately 1000 staff that are part of Colonial Services Limited and they have maintained their conditions. In certain circumstances some of the CBA conditions in terms of their award, have been negotiated as part of their awards and they are maintained under the Colonial Services Limited system.
**** KENNETH JOHN PRITCHARD XN MR DOUGLAS
PN2117
And the process involved in the 2000 going across to the CBA, was that similar in any way to the process that was involved in the CSL people going to EDS?---Yes, the process was the same - and what I mean by that is that they were given a CBA offer. They were asked to accept or reject it and part of that acceptance process was to resign from Colonial Services Limited. There was a difference, however, in the fact that they were not offered any other conditions or incentives to make that - it was purely on the basis of the role in CBA and the conditions attached to that role.
PN2118
Were there guarantees given to those people in terms of the offers about salaries and conditions of employment, to your knowledge?---Guarantees - in relation to length of service, all of those inherent conditions that they'd accrued as members of Colonial, they were transferred - the difference was mainly around the remuneration packages. My recollection is that in relation to superannuation, we were able to port through the existing super schemes to enable people to retain that and that was certainly the deal with the IT transfer and they were maintained. So all of the things in long service, length of service, redundancies, for services purposes, were transitioned across.
PN2119
And salaries, from what I understand that you are saying, that the individual's personal salary level was either maintained or increased?---Yes, because - because in some cases the actual jobs offered were different to what they were under a Colonial regime and they - they accepted those offers on the basis of the salary package and in a lot of cases they were enhanced on what they were paid previously. In others where there was a movement across, there was flexibility to maintain the remuneration amount, so that it was either equal to or better than.
PN2120
Now can you turn to KP3 which is attached to your statement?---Yes.
PN2121
THE SENIOR DEPUTY PRESIDENT: What page?
PN2122
MR DOUGLAS: 56 I think, your Honour.
**** KENNETH JOHN PRITCHARD XN MR DOUGLAS
PN2123
THE SENIOR DEPUTY PRESIDENT: 56.
PN2124
MR DOUGLAS: Well, 56 on the original statement, I suppose it would be 56 on the - - -
PN2125
THE SENIOR DEPUTY PRESIDENT: That is true, it could vary, but we are working off the original statement as far as the annexures go.
PN2126
MR DOUGLAS: Now, Mr Holland - you know Bob Holland?---I do.
PN2127
He gave evidence yesterday that he became aware that this statement was to be made at meetings of Colonial Services employees a couple of days before the meetings occurred. When was this statement put together, roughly speaking?---Yes. Maybe I could just give you a sequence of events to try and put some context around it.
PN2128
Yes please?---These series of presentations were not the first presentations given to Colonial IT staff. The first set of presentations that were given were in the July period and the context around those presentations was to give the Colonial IT staff an understanding of what the Commonwealth Bank was and what - what its business was about and what its strategy was in relation to IT and they were conducted in Sydney and Melbourne in the July period. At those initial presentations, EDS were not present and we intimated to the Colonial IT staff that there would be a series of presentations that EDS would then conduct with them consistent with our IT outsourcing strategy. First to introduce EDS and what they stood for, what the company was about and what their sphere of activities were in Australia and globally. That was first an information session and saying that, we are EDS, this is what we do. The next set of presentations was to inform Colonial IT staff of the offer and acceptance process and this is what this particular exhibit refers to and those was a set of presentations to first of all tell them what the - how the office would be made up and how we would be taking it forward and the process that would be unfolding in that offer and acceptance period.
**** KENNETH JOHN PRITCHARD XN MR DOUGLAS
PN2129
So was this statement part of presentations in both Melbourne and Sydney?---At the third series of presentations. It wasn't part of the first and it wasn't part of the initial EDS, this is who we are, this is what we do.
PN2130
Okay and was this statement at both locations?---Yes.
PN2131
Yes. Was it presented to the employees before or after the offers went out? The offers went out on 14 August I think?---Prior to the officers being made.
PN2132
Prior?---Yes.
PN2133
Was that some time prior or shortly prior?---My recollection - it was - initially we were aiming to try and get the offers out around the start of August and we had just, with the logistics and - and some of the questions that we'd got through over time and the preparation of all of those offers and the supply of salary detail and all of the other things, the 14th is a result of not being able to meet that 1 August original date.
PN2134
What is the reason for the heavy type? Was it put up on a screen?---Yes, they were used as Powerpoint presentations or transparencies, I can't actually recall, but that's just normal Powerpoint in I think, font 22, 24, and usually we do it in bold so it's readable.
PN2135
Can you recollect why it was that this statement was put together and actually presented to the staff?---Yes I can. We need to understand, perhaps, the makeup of Colonial. Colonial was a series of acquired companies.
**** KENNETH JOHN PRITCHARD XN MR DOUGLAS
PN2136
Say again?---Colonial was a series of acquired companies and they had actually been through a partial outsourcing of some of their businesses and obviously with the acquisition of other companies and other IT people, they had been through some transitional processes previously. We, over time, as we were preparing for this, we - we had in place feedback mechanisms which were either email or on the EDS internet. The questions and answers in relation to what the staff were putting forward and we had heard that there were expectations within the IT area that there may have been opportunities for redundancies, so we wanted to be very clear that what we were offering was an offer and acceptance of comparable employment and make that offer to the staff. But at the same time that they understood that the offer and acceptance process was about comparable employment and we believed that we needed to make a statement in relation to retrenchment because it was an issue that we had seen - heard some ground-swell about.
PN2137
Okay, now go to the end of the statement which leads to that end and I presume that those words are referring to the foregoing:
PN2138
If a comparable offer from EDS is declined, no retrenchment payments will be payable.
PN2139
Now what was your understanding of the intention of that sentence?---My understanding was that we would make offers to Colonial IT staff and they would have the opportunity to either accept or reject those offers. Their rejection of those offers would not be a signal for retrenchment.
PN2140
So rejection of the EDS offers wouldn't give rise to retrenchment - wouldn't be a signal?---No, that's right.
PN2141
So did that sentence in your view - - -
PN2142
MR LAWRENCE: I object to this question. It is quite obviously a leading question. Certainly it has got the hallmarks of a leading question.
**** KENNETH JOHN PRITCHARD XN MR DOUGLAS
PN2143
MR DOUGLAS: Yes, well now that I think about it, your Honour, it would have been. I apologise for that. I attempt to be disciplined, your Honour.
PN2144
Did that sentence have any relationship to secondment or issues of that kind?---No, it was clearly a statement of where we stood on the basis of providing a comparable offer. Obviously with - in making - if there was a rejection we would have needed then to understand, firstly, the number of rejections and we also made it very clear that if people did reject the offer, we would be individually talking to them to understand the reasons for that rejection.
PN2145
Could you have a look at this document please. I only have one copy but I can get a copy. No doubt my learned friend, Mr Lawrence, has got a copy of this anyway. In his list it is B31, folder 2, B31. Now that is one of the documents that has come forward as a result of a subpoena issued by Phillips Fox, on behalf of their 34 clients and it sets out KP3 in the form that it is in your statement, except that the last sentence reads differently but the last sentence is on the document in hand-written form with the words, "shown to Peter Hill". Now Peter Hill, who is he?---Peter Hill is a lawyer employed by our group human resources section.
PN2146
Yes. And I think that hand-written note is dated 11 August, about 4.15 in the afternoon?---Yes, it is.
PN2147
And the document itself is dated 11 August 2000?---Yes, it is.
PN2148
Now the final wording of KP3 is in the hand-written form. Can you read out the original wording in the last sentence?---Which is the last sentence or the last paragraph?
PN2149
The last sentence. The sentence that is ultimately replaced?---Okay:
**** KENNETH JOHN PRITCHARD XN MR DOUGLAS
PN2150
We would want to explore the individual circumstances of the employee to see where the issues arose and what other alternatives existed in the particular situation to maintain employment.
PN2151
Now those words followed the word, "rejected", which exists in KP3 and were intended originally, as I understand it, from that document to stand in the place of the sentence that was ultimately put in, is that right?---As I understand, this was prepared for me, yes.
PN2152
Yes. Your Honour, I will have a copy of that made and I will tender it subsequently, but I think my learned friend is aware of it. In fact he has got a copy in front of him.
PN2153
THE SENIOR DEPUTY PRESIDENT: Very well.
PN2154
MR DOUGLAS: Well, it could be marked at this time, your Honour.
PN2155
THE SENIOR DEPUTY PRESIDENT: It probably would be wise to mark it now to keep track of it.
PN2156
PN2157
MR DOUGLAS: Thank you, your Honour.
**** KENNETH JOHN PRITCHARD XN MR DOUGLAS
PN2158
Just one last question, Mr Pritchard. Going back to the 2000 who have gone from CSL to the CBA. Are you aware as to whether any of those employees have been paid retrenchment pay by CSL?---No, the offers would have been on the basis of a position within CBA and an acceptance of that offer and a resignation from CSL.
PN2159
PN2160
MR LAWRENCE: Mr Pritchard, I would like to take you through a number of documents?---Yes.
PN2161
And on the way through those documents I will ask you various questions in relation to them. The first one that I would take you to is the document which is entitled: Briefing for Colonial IT Presentations 19 and 20/7. A copy of that is just being passed to you?---Thank you.
PN2162
I will give you a moment to read it. Have you seen this document before?---I can't recall seeing the actual document but I am aware of the, you know, the approaches and things that are being stated here.
PN2163
All right. You were involved in the presentations of 19 and 20 July?---19 and 20 July. Yes, the ones that were held in Sydney. That's right, yes I was. I think it is the hotel just at Wynyard.
PN2164
Yes?---Yes.
PN2165
Now, these were the first presentations?---That's right.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2166
To tell people what was being proposed?---Yes.
PN2167
And they were just the Colonial presentations, not the joint Colonial EDS presentations?---Sorry, they were the EDS presentations.
PN2168
Yes, there were the second - the second in the series of presentations that you have referred to?---No, they were the third.
PN2169
The third?---Yes.
PN2170
Well I will put it to you that the third presentations were in August?---No, sorry we have got two sets of sequences here. I mean - not the dates - I will speak as I understand it if I may. We had Sydney and Melbourne presentations. The first presentations to the IT staff that Russell Scrimshaw gave was about: This is CBA, and I thought they were June. The second presentations which were the EDS presentations of: Who We Are, I thought they - they were mid July. Then the third set of presentations which was about these ones, I believe, are the ones where the context of the offers of what they would receive were being done on.
PN2171
All right. So if we just take the first set. You said: CBA - Who We Are, or words to that effect?---Yes.
PN2172
Was this a general introduction to CBA following the takeover of Colonial?---Yes, yes. It was more specifically, technology, operations and property, which was one of the divisions of the Commonwealth Bank. And what the aim was is to give the Colonial IT staff an understanding of what the CBA business was, what our intentions were and what our strategy was in relation to IT outsourcing. That would suggest presentation of 19 and 20 July?---Which I think this was the EDS presentation.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2173
Now, you will see, about a third of the way down under the underlined words:
PN2174
In terms of Colonial's EBA we have written legal advice in relation to Colonial employees who do not accept comparable offers to CBA will not have any entitlement to retrenchment and can then be terminated.
PN2175
Do you see that?---Sorry, two-thirds down?
PN2176
Yes, on the first page, about a third of the way down?---Right, sorry.
PN2177
"In terms of Colonial's EBA"?---All right.
PN2178
Do you see that?---Yes, I do.
PN2179
Yes, were you aware of what is asserted there?---I was aware that there was advice, from what I've told, that provided comparable employment was offered, there would not have been entitlement to retrenchment.
PN2180
Yes, and is that in relation to CBA, going into CBA or in other circumstances?---My understanding of it it was in all circumstances.
PN2181
All right?---Where comparable employment was being offered.
PN2182
Yes, and the next two sentences say this:
PN2183
For IT purposes and movement to EDS we have the same initial advice, however we are yet to have this advice confirmed. Accordingly, no definitive position should be provided.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2184
?---At that point in time that would have been, I think that we were.
PN2185
Yes, so you were waiting on confirmation of a position?---Yes.
PN2186
And then it goes on:
PN2187
To that end keep bringing any retrenchment related questions back to employability and give an undertaking that a clear position will be communicated to employees before offers are made and I will have one of my CBA ..... people clarified for you.
PN2188
Do you see that?---Yes.
PN2189
Now, obviously this is written by a particular person, given the reference to a particular person's intention, do you know who wrote this document?---I'd only be speculating.
PN2190
You might not be able to answer this, would it have come from HR within Colonial or Group HR?---I'd be speculating again and I would think, on the basis of how it's written, it may be the CBA position waiting for clarification.
PN2191
Yes, all right, and then in the next part under the next heading, under the heading: Recommended answers to questions submitted:
PN2192
What will happen if I don't accept an offer from EDA, will I be retrenched?
PN2193
And then there's a standard response proposed?---Yes.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2194
Was that the response that was in fact given at, what we will call, the second round of presentations?---I think that's correct, yes.
PN2195
All right, and then under the heading:
PN2196
If I elect not to take an EDS offer will there be forced secondments?
PN2197
And the answer that is proposed is:
PN2198
Again, the focus here is on ongoing employability in terms of comparable offers with EDS. With that I do not envisage there will be secondments of any great degree.
PN2199
Do you remember that being part of the script or the approach that the bank was taking - - - ?---At that - - -
PN2200
- - - in relation to those matters?---At that point in time we - we were of - our strategy obviously was to transition as many people as we could and we were quite hopeful that we would transition all of the people.
PN2201
When you say "transition" do you mean transition them to EDS employment?---Yes.
PN2202
Yes, so secondment is different to transition?---Absolutely.
PN2203
And the question here is:
PN2204
If I elect not to take an EDS offer will there be for secondments?
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2205
And the answer is in part:
PN2206
I do not envisage there being secondments of any great degree.
PN2207
Are you justifying that response on the basis that you thought at that stage that most of the employees would transition?---A premise is probably on - on a number of things, the fact that Colonial had already gone through an outsourcing arrangement where they outsourced to Alltel, the retail banking systems, and there were a number of Colonial IT people that were transitioned to that organisation. Where also, as I mentioned earlier, the fact that we transitioned a number of our people under the CBA transition to EDS and we - we had a very strong working relationship with EDS. But at the same time we were very comfortable and confident that the offers that would be made by EDS would be seen as comparable and - and would be seen as fair and equitable, and as such given a - a wider spread of opportunity. So our - our view was that we didn't expect the level of - of secondments.
PN2208
All right?---But at the same time, if I could add one more thing, because we had already transitioned to EDS the CBA business, provided that we had a - the right skill sets, and I mentioned earlier that that was in the order of some 10 to 15 per cent, we could actually continue operation with other people, there would be - obviously bring people in to do the work for us.
PN2209
Well, are you saying that as long as you have got the right people, you had your critical people transferring over, that you would still be able - or EDS would still be able to provide the services by bringing in others to supplement that group?---No, I'm saying that we were confident that our offers were acceptable and we had a high expectation to - to move people across because there - there was opportunity and we would - in development of those packages with EDS, one of these that we ensured is that their - their salary was equal to/or better than, their superannuation was maintained, their conditions of service were maintained and they were joining an equitable company and we were going through a process of educating Colonial IT people.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2210
All right, well, that was the script that you were using at the time, the question that is put at the bottom of that first page is:
PN2211
If I elect not to take an EDS offer will there for secondments?
PN2212
And I put it to you that the answer is in effect: No, save that there might be some secondments but those secondments won't be to a great degree?---Given that, at that stage, we didn't know how many people would accept the offers, and what we wanted to understand and analyse was our - our needs as a result of those offers being either accepted or rejected, I think that's a reasonable position of where we were and we would then actually work through what we needed in a secondment basis, but our expectation was that there would be not a large number.
PN2213
..... asked you the question, that is at the bottom of that page, at that time, that is a person said:
PN2214
I'm currently working in Colonial IT, I'm in scope, if I don't sign will I be seconded over to EDS?
PN2215
What would your answer have been?---Our answer at that stage would have been: if - if you don't accept the offer we will talk to you about why you didn't accept the offer and go through that process first.
PN2216
Yes, but what about on the question of secondment, what could you have said on the question of secondment?---The question - in the question of secondment, there was a question asked in August to our HR people about secondment and the answer, I believe, was that - what I recollect, is that we would need to consider secondment in the circumstances and at the time.
PN2217
So are you saying that the line that you were giving to the employees who asked about secondment was that: they may be seconded but maybe not?---That's right.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2218
And what was the position in relation to those who would not be seconded?---We hadn't a position at that time, if we're talking about this - the date when this presentation - - -
PN2219
In July?---Yes.
PN2220
Yes, and what was your position in August when the presentations were done in August, if they didn't - - - ?---At that point, and that's the point I'd brought up earlier, that question was asked in Melbourne.
PN2221
Yes?---We still didn't have the feedback in relation to the actual acceptances to take a reasonable view on that at that point.
PN2222
So are you saying that in August you were not in a position at that stage to be able to tell people whether they would in fact be seconded over if they refused or not be seconded over if they refused?---Well, we didn't know what the level of acceptance would have been so we couldn't have given any certainty in relation to secondment.
PN2223
If the person was not seconded over, what were you telling the people would be the consequence?---From my perspective, my understanding at the time that we would be doing that through one on one discussions at a time when we understood what people had rejected the offers and what jobs or roles had to be adopted so we were leaving it until we understood what the outcome of the offer and acceptance process was.
PN2224
Well, you knew that the view that was taken in the middle of August was the positions were comparable?---Yes.
PN2225
So that didn't need to be debated, did it?---No.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2226
We said up front that we would ensure that there was comparability and we asked a third party to actually verify that.
PN2227
So the question is by August, when the third round took place, if it was put to you by somebody that he or she didn't want to go to EDS, had rejected what you claimed to be a comparable position and was not going to change his or her mind, then what would have been the consequence?---As I said earlier, at that point, at which we did articulate, we would go through a series of discussions with the individuals, one on one to determine what our next steps would be.
PN2228
If it turned out that the company's position didn't change and the individual's position didn't change, what would have been the position?---At that point there was no position formally. It was as a result of what the outcomes were going to be.
PN2229
Are you saying right up until August there was no position as to what the outcome would be?---Given we didn't have the numbers and given we didn't know where we would have any short fall - obviously our preferred position was not to have secondments.
PN2230
If you had sufficient numbers by way of transitioning staff and you didn't need these other people by way of secondment or a particular person by way of secondment, what would have been the position?---Well, again I go back to the point I made before, our objective was to transition all of our IT professionals to EDS and as a result of that any that didn't accept the offer we would go through the process of why they didn't accept because some of their situations in around '97, was about - people were positioning for a retrenchment.
PN2231
Mr Pritchard, I am asking you a series of questions which would be the kind of questions an employee would ask you or some other manager in August 2000. I am trying to find out what one's future livelihood would be, what options are available and in the series of answers that you have given to the Commission in response to questions from me, you haven't answered the question as to what would happen if the offer was rejected. First of all, you have not said - - -
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2232
MR DOUGLAS: Well, your Honour, I object to that. The witness has answered the question. He might not have answered the question in the way my friend wanted but that is a different matter and I object to this line - - -
PN2233
THE SENIOR DEPUTY PRESIDENT: I am prepared to let the line continue on. I am conscious the answers given don't meet the questions but I am also conscious of the fact that they are being repeated, Mr Lawrence and there comes a time when one must accept that is the answer.
PN2234
MR LAWRENCE: Yes. Now, could I put it this way. If the outcome of this process would have been that the employee still didn't want to go to EDS and the company stayed with the position that it was a comparable offer then what would have happened to the employee?---The positions that were placed was that we would go through that in depth discussion with individuals and understand their reasons why because if going forward from the outset to when the offers were given, there were a series of questions raised by employees of Colonial IT and they were answered on a progressive basis. There were questions about conditional services, there were questions about what would I be doing in EDS, there was a lot of education because there was some uncertainty about what was I being offered. So went through a process of trying to inform and answer and use that as a continual education process to get people to have at least the best available information to enable them to make a decision. That process was ongoing and started in June and progressively more information and answers were given. At the end of the offer and acceptance period, there was a very high take up in relation to those offers, a very high take up. I wasn't privy to the actual discussions, one on one, with people that had refused the offers.
PN2235
It is the case, isn't it, Mr Pritchard, that that overhead, that document which is KP3, your statement, was intended to communicate a message to the employees that if they didn't sign up with EDS they would have been taken as refusing an offer of comparable employment and would have been terminated without retrenchment payments.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2236
MR DOUGLAS: I object to that, your Honour. The statement, KP3, nowhere says that.
PN2237
MR LAWRENCE: Well, my learned friend is trying to assist the witness by that intervention.
PN2238
MR DOUGLAS: I am not, your Honour. Your Honour, my friend is putting a question to the witness about KP3, what is in KP3. KP3 does not say that anywhere in its wording.
PN2239
MR LAWRENCE: He has got away with it, your Honour. The witness could have said that. The witness could have disagreed with what I said. Now, Mr Douglas has put the words into his mouth.
PN2240
THE SENIOR DEPUTY PRESIDENT: Well, he has. Where that leaves you, Mr Lawrence, I don't know.
PN2241
MR LAWRENCE: Well, it is a matter for comment, no doubt.
PN2242
THE SENIOR DEPUTY PRESIDENT: I am sure I will heard about it further too.
PN2243
MR LAWRENCE: Yes. I will give the witness an opportunity of answering the question. I put it to you, Mr Pritchard, that what that passage or passages in KP3 were intended to communicate to employees who refused an offer was that they would be terminated without retrenchment payments?---The intent of what we wanted to have our people understand, as we went through the process, was the fact that if they didn't accept the EDS offer, retrenchment would not follow. That was to - actually, as I said to you earlier, there was a feeling and we got feedback on this, that people were looking for retrenchment. We wanted to clearly state that provided we were equitable and provided
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
comparable opportunity and on what had been informed to me, and obviously I can only work on what I am told, that we would be not - we would be looking at being fair an equitable and if there was not a situation where a person did not accept the offer, that we would go through the process of understanding that and then make a determination. It did not follow that, necessarily, that retrenchment would not be paid as a result of refusal of offer.
PN2244
I put it to you that what was being advised to the employees was they would be terminated and they would be terminated without retrenchment payments?---I am sorry, that was not the intent of my understanding and that - what we were looking for was understanding the reason for refusal and if there was refusal we would need to look and see if there was an opportunity within the bank for another role, and that was also said.
PN2245
I put it to you that the position at the time, during August, was that there was already a commitment that the bank had made to EDS, that any employees who didn't take up the offer to be employed by EDS would nevertheless be seconded to EDS?---I think in all things, when you go through a process of planning what may or may not happen, you will always take a series of scenarios that could occur and we would have, in the process, have expected, as was in the '97 experience, that secondment was an - sorry, secondment may have been a necessary approach.
PN2246
Well, I put you, that secondment was going to be the approach taken if they didn't transfer?---Depending on circumstances, that would have been an option.
PN2247
There has been - perhaps the witness could be shown exhibit PF2. I am just trying to find an unmarked copy of PF2. Yes, we have got an unmarked copy of PF2 here.
PN2248
THE SENIOR DEPUTY PRESIDENT: We have found one ourselves.
PN2249
MR LAWRENCE: Well, when I say "unmarked" I mean - - -
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2250
THE SENIOR DEPUTY PRESIDENT: Not initially marked.
PN2251
MR LAWRENCE: Yes, that is right. Mr Pritchard, would you just have a look at this document. Have you seen that document before?---May I have moment just to read it?
PN2252
Yes?---It wasn't addressed to me. It was addressed to our contracts management area. I would think this is a pre-emptive document that sort of sets out a position on the basis that if - that the bank would provide for staff if there was a secondment outcome and it was setting that up in contractual terms.
PN2253
Are you referring to the dot point on second last page?---Yes.
PN2254
You have seen this document before?---No, I haven't.
PN2255
You have a recollection?---No.
PN2256
If you would go to the last page, you will see that it was CC to yourself?---I don't recollect seeing it. I mean, I am privy to - I mean we are talking about a couple of years ago but I am privy to a lot of the context around the number of issues that had to be resolved of which, obviously, the transition of people was one.
PN2257
Could I just ask you to go to the last page briefly. The word "approved" and then a signature appears on that page, do you recognise the signature?---I recognise Skip Dray's signature as the signing of the letter. Graham Dawkin's signature is vaguely familiar, looks like Russell Scrimshaw's signature.
PN2258
You could come back to the bottom of the previous page, I put it to you that this document makes it clear that employees, Colonial Staff employees who did not accept the offer would be seconded to EDS?---Provide for Colonial staff who do not accept the job offer to be seconded to EDS, yes, it sets up that opportunity.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2259
Well, it is an obligation, I suggest to you?---I would suggest that we were saying if that did occur, we would actually play the part that we needed to play in that happening. Similar to what happened previously in '97 when there were some secondments as well.
PN2260
That letter is dated 11 August, it would have been appropriate, after that, certainly after that, if not before that, to have said, I suggest to you, to staff making the sort of inquiries that I alluded to a short time ago, that if they don't take up the offer of employment with EDS they would nevertheless be seconded over to EDS?---Again, it was one of the options and that came out of the August meeting. It was put to staff if they didn't accept the offer they would look towards alternative employment with the Commonwealth Bank, providing, of course, there were opportunities.
PN2261
The position that was put at that stage was there weren't other opportunities or very few opportunities?---No. What we did say was because - we had a very small group technology component, I think at the time would have been 15 to 20 people which was largely about managing the out-source contract with EDS as a result of the '97 transition. So there were not a large number of technical opportunities within the group because it was mainly around banking and financial services.
PN2262
Now, can I just ask you - you can put that document down now and go back to the other document that I showed you before?---That is the A1, the briefing document?
PN2263
I am not sure if I mentioned this earlier, your Honour, but the numbers that appear relate to the position within the series of folders that were provided in response.
PN2264
THE SENIOR DEPUTY PRESIDENT: This particular copy does not have those numbers.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2265
MR LAWRENCE: Now, would you turn to page 2 of the document. There are some other questions there: Is the bank offering retrenchment to IT people and you will see the suggested answer there is or the theme of the responses is:
PN2266
The focus is on employability and I am committed to making to ever effort to keep people employed wherever possible. With that I do not envisage many, if any, retrenchments being offered as we work through the integration.
PN2267
?---That is consistent with what I mentioned before.
PN2268
The retrenchments that are referred to there are terminations with retrenchment pay, is that correct?---I would have thought, if there was a retrenchment, that is what it refers to.
PN2269
Then there is a suggestion as to what could be added to that comment and there is another question, this is halfway down or a third of the way down the page:
PN2270
Will there be any circumstance in which employment is terminated by Colonial without redundancy being an option?
PN2271
And I suggest to you the script there is:
PN2272
I assume this question relates to the industrial ramifications of comparable offer not being accepted. With that I will have my HR team investigate and confirm our position as I am not fully across the industrial issues.
PN2273
?---At that point in time I think that is consistent.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2274
It was consistent, at least, with the presentations that were being made at that point in time?---I think it is consistent with our knowledge.
PN2275
So is the position this, that although you are not familiar with this document, this does contain matters which you were aware of and responses which you are aware of at the time that the - - - ?---Yes, as I said earlier, there was a feeling that people were looking for retrenchment payouts and we obviously in preparing people for the likely questions to understand and that's where this has come from.
PN2276
Thank you. I tender that, if the Commission pleases.
PN2277
THE SENIOR DEPUTY PRESIDENT: Any objection?
PN2278
PN2279
MR LAWRENCE: If your Honour pleases.
PN2280
I would just like to ask you briefly about another document which will be handed to you in a moment. Mr Pritchard, were you aware that what might be called Q and As were being produced for Colonial employees during the July, August period?---Yes, I was.
PN2281
Is this a copy of one of the Q and As, the first of the Q and As that were distributed?---Yes. It looks very early in the piece, I'm familiar with where it has come from.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2282
At the bottom of the page there's a reference to the TOP, t-o-p, integration hotline and there's an E-mail address there. Whose E-mail address is that?---That's Louise Denver's E-mail.
PN2283
What is her position?---She is the communication person for TOP.
PN2284
For TOP?---Yes.
PN2285
Yes, thank you. I tender that if the Commission pleases.
PN2286
THE SENIOR DEPUTY PRESIDENT: Any objection?
PN2287
PN2288
MR LAWRENCE: Mr Pritchard, I would like to now take you to a copy of an E-mail?---Yes.
PN2289
It is actually several E-mails reproduced on this document but the E-mail at the top of the document is from Mr Pellegrini to a couple of people and it is cc to you?---Yes.
PN2290
It is dated 7 August. Do you see that?---Yes.
PN2291
If I could just go to the bottom of the document on the second page - this was the document that initiated the subsequent correspondence. Do you see there that it was from an Irene Lyson to a number of employees within Colonial?---Yes.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2292
Who is Irene Lyson?---She is the personal assistant to Russell Scrimshaw.
PN2293
He, according to this document, has his name at the bottom of that part of the E-mail?---My recollection that there were a series of E-mails sent direct to Russell as a result of the first presentation where employees of Colonial IT were asking Russell questions in relation to EDS and subsequent process around EDS offers and the like.
PN2294
Yes. Well, you see that first message is on the subject:
PN2295
Your E-mails of 27 July 2000.
PN2296
The response is at the outset:
PN2297
Thank you for your recent E-mails concerning my presentation to Colonial IT staff on your employment situation.
PN2298
Then the second paragraph refers to the Commonwealth group's intention. You will be aware of those words, they were frequently used words, weren't they?---Yes.
PN2299
Then the third paragraph:
PN2300
To this end EDS will be making offers to Colonial IT staff.
PN2301
Again they were standard words that were used?---Yes, which was consistent with something else.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2302
Yes. The last sentence in that penultimate paragraph is:
PN2303
We would want to explore the individual circumstance of the employee to see where the issues arose and what other alternatives existed in the particular situation to maintain employment.
PN2304
?---That's right.
PN2305
Yes. Then that message is sent to a number of people and the next document, working backwards, is from Andy Black to a number of people and it is dated 3 August. Who is Andy Black?---I don't know Andy Black personally. I'm presuming he was another Colonial employee that received a copy - well, he's obviously one of the people that wrote directly to Russell via E-mail.
PN2306
Then the second paragraph of that letter says:
PN2307
My major concern revolves around the fact that if I accept an offer from EDS I could -
PN2308
and I won't read the rest. You will see that that document is then the subject of another communication from Irene Lyson, again on behalf of Russell Scrimshaw. She says:
PN2309
Thanks for your note. Our EDS and HR people understand your issues and will take them into account in framing any offers. Our objective is not to disadvantage people. My best advice at the moment is to wait and see what the offers look like before making any judgments.
PN2310
?---Yes.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2311
Then that correspondence goes to a variety of people and it leads to the TOP E-mail which is from Milano Pellegrini and you are copied in on this correspondence?---Yes.
PN2312
I skip the first paragraph. In the second it says:
PN2313
EDS will firm up T and Cs via presentations late in the week.
PN2314
?---Yes.
PN2315
I just stop there. What does T and Cs mean?---It's terms and conditions or Q and As I think in that context.
PN2316
Terms and conditions?---Yes. If I can explain to you, there was a series of E-mails and questions that were progressing - that were right up to this time and continued right a long time after.
PN2317
Then it goes on:
PN2318
This issue will no doubt be raised for CBA to answer and we need to be -
PN2319
it says form - I think it means firm -
PN2320
with our position. To that end can I confirm our position has not altered, nor do we intend to alter for those who do not accept offers from EDS.
PN2321
Well, do you know what the position was at that stage?---Largely what I think I've been saying all the time, that the comparable employment offer and acceptance and providing there was comparable employment, that retrenchment wouldn't be payable.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2322
In those circumstances the employees would be terminated without retrenchment payments?---Not in that sequence.
PN2323
But at the end of - - - ?---At a point in time that could be a result.
PN2324
Yes?---As I said to you, very much was about talking to people individually which occurred.
PN2325
I tender that, if the Commission pleases.
PN2326
THE SENIOR DEPUTY PRESIDENT: Any objection?
PN2327
PN2328
MR LAWRENCE: If your Honour pleases.
PN2329
Would you look at this document. This is Mr Pellegrini to Louise Denver. You are copied in on this?---Yes.
PN2330
The subject of retrenchment. Starts off:
PN2331
Final wording as discussed this afternoon and okayed by GHR.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2332
?---Yes, that's Group Human Resources.
PN2333
Thank you. The next is:
PN2334
Louise, if I may please have a copy of the final Q and A so I can provide to the FSU at the same time it is despatched to employees.
PN2335
Then Mr Milano is obviously the author of this and if I could draw your attention first of all to the first paragraph of the two paragraphs underneath Mr Milano's name. At the end of that first paragraph it reads:
PN2336
Accordingly where appropriate employment is found for staff the group will not be making employees redundant or making retrenchment payments in these circumstances.
PN2337
That was meant to indicate that if the comparable position or if the bank identified a comparable position in EDS and there was a job offer from EDS, then those employees would not be made redundant or receive retrenchment payments?---That's - yes.
PN2338
Yes. Then it goes on:
PN2339
With that EDS will be making offers to Colonial IT staff on an overall comparable basis for their current terms and conditions. Should an offer of employment be made by EDS and then be rejected by an employee, an understanding will be sought of the issues and circumstances why the employment was rejected. To that end if a comparable offer from EDS is declined, no retrenchment payments will be payable.
PN2340
?---Yes.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2341
Is that the similar form or the same form of words that was adopted by way of the handwritten comments in the earlier document that you were shown? Perhaps the witness should have that earlier document.
PN2342
THE SENIOR DEPUTY PRESIDENT: COLONIAL10, I think?---In relation to the E-mail trail and the times, that's a result of that, yes.
PN2343
MR LAWRENCE: Yes. Just while we are on that Colonial document, the one you have got in your right hand, the handwriting on it, do you recognise that handwriting?---No, I'm sorry. I could guess but I don't know, I can't say with certainty.
PN2344
Yes, thank you. Your Honour could I tender the document 11 August.
PN2345
THE SENIOR DEPUTY PRESIDENT: Any objection?
PN2346
PN2347
MR LAWRENCE: If your Honour pleases.
PN2348
You have just been passed a document, Mr Pritchard, which is headed: Integration 2000 EDS Q and A August #1. I will just give you a moment to read that. You don't need to read it in detail at this stage but just look through it. Have you seen that document before?---I've seen many documents similar to this and it's consistent with the previous one issued by - out of TOP communications.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2349
MR DOUGLAS: Your Honour, on the copy I have I can't read the passages that have been marked as answer to.
PN2350
THE SENIOR DEPUTY PRESIDENT: No, nor can I for that matter. Are they significant, Mr Lawrence?
PN2351
MR LAWRENCE: These are the ones that have been provided by Colonial so we haven't got the originals, if I can put it that way.
PN2352
THE SENIOR DEPUTY PRESIDENT: The originals.
PN2353
MR LAWRENCE: I only want to go to a couple of passages and obviously this is a matter for some other witness rather than this witness but I'm going to limit it to two or three questions in relation to this.
PN2354
THE SENIOR DEPUTY PRESIDENT: To the document?
PN2355
MR LAWRENCE: Yes, which will put some matters in context.
PN2356
Mr Pritchard, you will see that on the first page there are two paragraphs that have been shaded?---Mm.
PN2357
The end of the second paragraph the words are:
PN2358
We would want to explore -
PN2359
sorry, this is on the third-last line, second paragraph?---Yes.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2360
We would want to explore the individual circumstances to see where the issues arose and -
PN2361
I can't read the next word, it might be "what" -
PN2362
other alternatives existed in the particular situation to maintain employment.
PN2363
If you turn over to page - - -
PN2364
MR DOUGLAS: I accept that reading, your Honour.
PN2365
THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Douglas, I was taking it on faith.
PN2366
MR LAWRENCE: Then at page 4, this is question 28, it reads:
PN2367
I would like more clarity about what happens if I reject the EDS offer.
PN2368
Then it reads:
PN2369
It is the clear intention of the Commonwealth Bank group to keep in employment as many of its employees as it can arising from the Bank's merger with Colonial. To this end EDS will be making offers to Colonial IT employees on an overall comparable basis with current terms and conditions. Should an offer of employment be made by EDS and then rejected, the Commonwealth group would need to understand why the employment offer was rejected. We would want to explore the individual circumstance to see where the issues arose and what other alternatives existed in the particular situation to maintain employment.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2370
?---Mm.
PN2371
I tender that, if the Commission pleases.
PN2372
THE SENIOR DEPUTY PRESIDENT: Any objections?
PN2373
PN2374
MR LAWRENCE: Mr Pritchard, you have just had passed to you another document setting out some E-mails. The one at the top of the first page is from Mr Pellegrini to Louise Denver on Monday 14 August 2000 at 1748. I would ask you to turn to the attachment. You will see this is a document, again a Q and A, August #2?---Yes.
PN2375
You will see from this document that in question 2 the answer at the end of the first paragraph is in a format that you have become aware of, familiar with, and again at the end of the second paragraph the sentence again is one that we have been to earlier?---Yes.
PN2376
If you could now turn to - - -
PN2377
THE SENIOR DEPUTY PRESIDENT: Just before you turn the page. Mr Pritchard, does the answer to question 1 help us to fix the date of the third meeting in your - third presentation in your chronology?---Yes, your Honour, I think I would be - - -
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2378
It would be the third, wouldn't it?--- - - - fairly comfortable. That's the third of the series where we actually then started - - -
PN2379
Terms and conditions?---Not actual terms and conditions at the individual level but the framework - - -
PN2380
No, no, no?--- - - - at the gross level, yes.
PN2381
But it is the third in that series that you introduced earlier in your evidence?---That's right.
PN2382
Yes, Mr Lawrence.
PN2383
MR LAWRENCE: Now, if we could go to the second page in the document which is the page that has the originating E-mail. You will see it is from Mr Pellegrini on Friday, 11 August to a variety of people. You were copied in on it?---Yes.
PN2384
Then it says:
PN2385
Final wording as discussed this afternoon okayed by GHR. Louise, if I may have a copy of the final Q and A so I can provide the FSU at the same time -
PN2386
etcetera, and I think we might have seen that in another document. Then again underneath we have got a form of what might be called the earlier form of words. Do you see that?---Is that the same E-mail that we referred to previously?
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2387
Yes, I think that was the - - -
PN2388
THE SENIOR DEPUTY PRESIDENT: It is a different date.
PN2389
THE WITNESS: I think it is the 1650 of the 11th. This one?
PN2390
THE SENIOR DEPUTY PRESIDENT: Yes, PF15?---Final wording.
PN2391
Yes, I think you are right?---It is that one?
PN2392
MR LAWRENCE: Yes, we've - yes, exhibit PF15, your Honour.
PN2393
The E-mail in PF15 is the first of the E-mails of the sequence?---Yes.
PN2394
THE SENIOR DEPUTY PRESIDENT: When the system can work out an arrangement which puts these E-mails in proper order that will be a major technical achievement I'm sure. It would be very useful if it was done.
PN2395
MR LAWRENCE: Yes. I suppose the problem is that E-mails go to different people and - - -
PN2396
THE SENIOR DEPUTY PRESIDENT: I'm not holding you responsible, Mr Lawrence.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2397
MR LAWRENCE: Just before I leave this particular E-mail, do you know if Group HR had a committee or a group or a particular person assigned with the responsibility of dealing with the EDS Colonial arrangement and the Human Resources aspects?---It was a collective thing. I mean, the TOP HR had responsibility because they had the technology component but they had, as part of the group, the Group HR would have been advising them and Peter Hill, it's referred to in F2B31 is the lawyer in Group HR, so they would have been - and there was a Group HR - because the integration was wider than IT under the - the team leader there was John Matthews. So yes, there was a group, but there were obviously individual discussions depending upon what the issues were.
PN2398
Yes, so there would have been a paper trail within Group HR?---I'm presuming so.
PN2399
Yes, and you would have presumed a file and - - - ?---And the engagement of Peter Hill obviously would say that they would be - reference with information.
PN2400
Yes, all right. Again if we could follow back these E-mails. You will see at the bottom of the first page there is an E-mail from Rob Goller to Kate Dennis regarding the Q and As. Do you know Rob Goller or know of him?---I only - I'm assuming he's an EDS person.
PN2401
Yes, and Kate Dennis?---Kate Dennis I knew personally. She was the communication person for EDS.
PN2402
So obviously there's been some communication within EDS about the Q and As that were then under consideration?---There was a collective approach to the questions and answers. Obviously we were providing information to one data source so all the questions and answers were actually accommodated on one accessible medium for Colonial IT people. So Louise would do the actual wording in consultation with the appropriate subject matter expert area, collate that, get the sign-offs and hand it off to EDS for collation on their internet site.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2403
What Mr Goller is saying in this communication is that - well, it says:
PN2404
Why hasn't the last sentence below beginning "To that end" found its way into the Q and A I reviewed on Friday?
PN2405
That suggests to you, does it not, that Mr Goller had been involved in dealing with the question of what the consequences would be of failure to accept the offer of employment?---That's fair.
PN2406
Sorry?---I think that's a fair assumption.
PN2407
Then further up if we go to just above the middle of the page there's a message from Louise Denver to Kate Dennis at EDS and a variety of people are copied in, including yourself. There's a reference to the Q and A document that is attached, the one that you have already seen. It says:
PN2408
This is the final signed-off version from all of us here at the CBA. It was agreed by Graham Watson, Freehill, Hollingdale and Page and Peter Hill over the weekend and by John Matthews this morning. Katie has asked if we can withdraw question 14 on unions and we are happy to at this stage. I attach the final ..... Rob Goller, the last sentence is definitely on there now.
PN2409
Now, I would just like to ask you a few questions about that. When there's a reference to "all of us here at the CBA", do you take that to be a reference to at least Group HR?---Yes. The intent - sorry, let me take a step back and give you a bit more clarity. All of the questions and answers were compiled at one source by Louise Denver as a composite piece and part of the process would be to get the appropriate level of sign-off. In this case John Matthews is Group HR, Peter Hill is Group HR, so yes, that is correct. TOP HR would be the, if I could say, the developers of the information and then feeding that through for approval.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2410
Yes. Now, I just take you for completeness to the top entry there. There's a reference there to question 14 which I won't take you to in detail. Perhaps I could put this to you, that what we saw on 14 August was the finalisation of the change in the standard form of words that was used by the bank in respect of a rejection of an offer of what the bank would regard as comparable employment?---Are we referring back to my presentation? The content of this one which is agreeing them and the use of it.
PN2411
Well, perhaps I could put it another way. I might not have made myself clear. There have been two paragraphs that have been sitting together in a number of these documents?---Yes.
PN2412
There have been some similarities between the two over a period of time but what did change on 14 August was the expression or the sentences at the end of each of the paragraphs and in the former version of the two paragraphs the approach was basically: we want to talk about it and work through these issues?---Mm.
PN2413
In the latter form from 14 August there were the words in effect that retrenchment payment wouldn't be made?---I'm certainly agreeing that those words are there. I wouldn't have said that we didn't want to talk about it was taken away.
PN2414
All right. Were you aware, or have any recollection of becoming aware, at that time that there was a change in the standard response?---Only consistent with what I've actually said.
PN2415
Thank you. Could I tender that document.
PN2416
THE SENIOR DEPUTY PRESIDENT: Any objection?
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2417
PN2418
MR LAWRENCE: Now, Mr Pritchard, do you remember the date on which the first of the presentations was made during August?---The first presentation was in Sydney. I'm absolutely certain on that and if that was the 14th that was the first presentation.
PN2419
Yes?---Sorry, the first presentation of phase three.
PN2420
The witness statements of two of the interveners for whom I act refer to a meeting in Melbourne on 16 August?---Yes.
PN2421
Do you agree there was a meeting in Melbourne on 16 August?---Yes, there was a meeting in Melbourne and that was after the Sydney meetings.
PN2422
Yes. So could the Sydney meeting have been on - - - ?---There was more than one meeting in Sydney, more than one presentation, because there were far more people in Sydney.
PN2423
Do you recall if the Sydney meeting was on 14 August, Monday the 14th or Tuesday the 15th or both or can't you say?---I'm just trying to recollect. There was more than one session. They were held in the basement of the hotel on George and the little street behind it, Wynyard Park there. There were at least two sessions that I can recall and there was a subsequent session in Melbourne and that was, as I recollect, a couple of days later.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2424
All right. Would you now look at a document that is being passed to you again concerning the meetings of August. I will just give you a moment to quickly look at this document just to see if you have got any recollection of it. Have you seen this document before?---It appears to be an EDS document. I've only read the first couple of points but that's inconsistent with the EDS approach. The 15 to one sessions that they are referring to are 15 Colonial IT people and an EDS leader commensurate with the type of experiences they've had to explain EDS and I'm presuming one on one is if they wanted to ask specific questions, that's with EDS HR. So I don't recall the actual document. I recall some of the things and obviously if you went through it I could actually give you an opinion on most of the things.
PN2425
Do you remember getting briefing notes for the Melbourne presentation?---We used the presentation that we used in Sydney. We did have - and I'm just trying to recollect here. I wouldn't have been given briefing notes per se. We would have had conversations.
PN2426
Yes and you would have had conversations before the Sydney presentations and before the Melbourne presentations?---Yes and conversations as we developed the questions and answers and conversations as we responded to queries from Colonial IT.
PN2427
Perhaps you can't say much about this document but I will tell you that it was a document that was produced by Colonial as a result of a request for the production of documents. So that doesn't say where it came from or who made it. I just want to clarify that?---Yes. There were a number of people involved. There were a number of areas involved.
PN2428
Yes. Well, without being exhaustive, who were the people involved in the presentations from the Colonial side?---Are we talking Colonial IT or Colonial HR?
PN2429
Well, Colonial generally, IT and HR?---Sydney or Melbourne?
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2430
In both?---My recollection in Sydney, the person that may have been party - and I can't, I'm not absolutely certain if there was a Colonial HR person there and if that was a Colonial HR person it was either Carolyn Barbuto, I think, or one of the others. The attendees at the Sydney were predominantly IT, Colonial IT people, that either worked at Ashfield, Parramatta or 39 Martin Place. In the Melbourne meetings, however, there was a different Colonial HR person and also a different Colonial IT leader and those two people were Peter Marshall and Peter Fleming.
PN2431
Yes, thank you. Towards the bottom of the first page of this document you will see:
PN2432
If you do not accept the offer what do we get?
PN2433
Then underneath it's got:
PN2434
No retrenchment package is being offered as everyone is being offered a fair and reasonable offer. Some of the options are secondment, redeployment, termination and resignation.
PN2435
Do you see that?---Yes.
PN2436
The next question is:
PN2437
What happens if we say no to the offer?
PN2438
There's no answer given there?---I know in the Melbourne meeting when a question in similar terms was asked the response from, I think, both Peter Fleming and Peter Marshall - I'm not exactly sure which but that yes, they would go through the process of discussion.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2439
Over the page, at the top:
PN2440
What redeployment opportunities are there if we do not accept the offer?Russell Scrimshaw made a statement that if no-one accepted the offer they would be made redundant. What has changed since Russell made the statement is redundancy is no longer an option.
PN2441
The response is:
PN2442
The remark made by Russell was taken out of context. The remark was not meant to be seen in that way.
PN2443
?---This actual comment refers to the first phase of presentations that were conducted in Melbourne and that was feedback that came out of that Melbourne meeting. I wasn't there and I asked Russell about the context of his so-called comment and he basically said that he didn't say that people would be made redundant. Now, I'm not sure. I wasn't there so I don't know the context. It's hearsay.
PN2444
Yes, but in any event whatever he did say - - - ?---It was taken in that context.
PN2445
Yes, it was taken by a number of employees as indicating if they said no then they would get a retrenchment package?---I'm saying that's the way it was played back.
PN2446
Yes?---Yes.
PN2447
Then the next one:
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2448
Will employment within Colonial be terminated immediately if the offer is not taken or when the job that we are working on has been completed?
PN2449
Then it says:
PN2450
Secondment redeployment is the very last option. However, you may be retrenched without payment.
PN2451
?---Again getting back - I think that's poorly worded but what I think it's meaning to say there is that in our aim to get everybody transitioned and accepting EDS offers, they would be the last options. So in an order sense it would be first would be transition and then after that the options that would come out of non-acceptance.
PN2452
One of them being retrenchment without payment?---Well, in that, yes, consistent with the comments we've made previously of comparable employment.
PN2453
Then the next question is:
PN2454
How can we accept the offer when CBA Colonial are not answering our questions?
PN2455
The next question is:
PN2456
How can we sign when we have no idea of what we will be doing at EDS? We know nothing about our future jobs at EDS.
PN2457
The next one:
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2458
Why is it so important that we make a decision now as to go over to EDS when we have been given no answers as to where we will be placed and what we will be doing?
PN2459
?---Can I take those separately?
PN2460
Yes. Well, perhaps I'd ask you in general terms. You may wish to make a specific response. I put it to you that these reflect the concerns that the employees were expressing at that time?---They're - yes, they're consistent with some concerns that were being expressed. I think the context, however - as I mentioned earlier, there was a steady stream of questions coming from people and they were being answered progressively over a series of weeks and so in relation to the not answering the questions, that is perhaps the specific question may not have been asked. There were some issues around home loans. There were some issues around other aspects of employment. There were issues around superannuation at different times across the timeline.
PN2461
The second - to one of the questions that was asked was:
PN2462
Usually when I go for a job I get a position description or I respond to an ad.
PN2463
?---There was a request from people within Colonial IT to be given definitive responses of where they would be placed and how their employment - EDS had said, as I mentioned earlier in my - in the day that EDS couldn't absolutely confirm where people would be placed but would be respecting their current position, skill sets, REMs, all of those things and then working with them to make them obtain placement that was twofold in consistent with EDSs business and also matching their skill sets. So those two sections around there, there were people who were looking for definitive position descriptions and job codes.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2464
Now, perhaps I should tender that, if your Honour pleases.
PN2465
THE SENIOR DEPUTY PRESIDENT: Any objection?
PN2466
PN2467
MR LAWRENCE: If your Honour pleases.
PN2468
You have just had passed to you, Mr Pritchard, a document which again sets out several e-mails. The one at the top of the first page is from Adam Creighton to yourself and a couple of others dated 18 August 2000 at 10.57. First of all could I take you to the last page in the document which is an e-mail of the previous day? This is from Marcus Hanmer to Mr Crichton. Who is Marcus Hanmer?---He is one of the senior managers in TOP HR and as is Adam Creighton and they both were working to Milano Pellegrini.
PN2469
So Milano Pellegrini was out of Group HR?---No, he was out of TOP HR.
PN2470
TOP HR, had he been in Group HR prior to that?---Maybe years ago. I mean, as we had a very centralised HR model and that was decentralised to the divisional levels.
PN2471
Thank you and what he says to Adam is this:
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2472
Adam, I received a call from Peter Hill, 5.45 pm, who stated that he deemed it more preferable not to be too specific around the relevant Colonial EBA clause. Rather, would couch it in such a way that the offer constitutes alternative employment on a comparable basis to what they, Colonial, currently have now.
PN2473
Then underneath it is set out a proposed letter. I'll just give you a moment to read that letter. Now, is that the letter that Mr Marshall sent out to the employees, Mr Marshall of Colonial sent out to the employees after they received their EDS offers? Perhaps before you look at the front page if you just concentrate on the last page of the document?---I'm - I do recall a letter being sent to staff. I don't recall necessarily the timing of that. I'm assuming that - I'm not absolutely clear that Peter was the signatory.
PN2474
All right, well that can be dealt with in some other part of this case but let's assume for the moment that somebody was to send out a letter to the staff to give them an assurance or some advice?---I think the context of this came out of one of the meetings, one of the forums which was held and I think it was a request and again, things come back to you but I believe out of Melbourne there was a request to put something in writing and this may have been it.
PN2475
Yes, I suggest to you there was some request that Colonial should state that in its view the offer was comparable. That is it should put in writing what it was saying?---Yes.
PN2476
Yes and the relevant part, I suggest to you, of this letter is the second last paragraph of the draft letter, that is:
PN2477
To that end the EDS offer constitutes acceptable alternative employment which is comparable with your current terms and conditions.
PN2478
?---Yes.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2479
Yes and as you will see, that it was the view of Mr Hill that it would be preferable not to be too specific around the relevant clause?---That's what it says.
PN2480
I suggest to you that that form of words focused as the issue which was raised about the operation of the clause?---I'm not aware of the conversation so I - - -
PN2481
All right, thank you. Now, if you go to the bottom of the first page you will see Mr Creighton sending an e-mail to you and some others regarding the letter to the Colonial IT employees and he says - this is at the top of the second page. He has been liaising with both Milano Pellegrini and Peter Hill in relation to the issue that emerged from Wednesday's presentation. I think that's consistent with what you've said to me, Mr Pritchard. He goes on
PN2482
Milano has informed that employees asked the Bank to confirm in writing the comparability of EDS offers. Please find below recommended text of a response which has been signed off by GHR.
PN2483
It goes on:
PN2484
We have worded the text in a manner that reinforces our desire to keep as many people in employment as can. We believe the message also places FSU in a precarious position given their support for the Bank's public undertakings.
PN2485
And so on. Then I'll take you to the top e-mail on the front of this document. This is from Adam Creighton to yourself and others?---Yes.
PN2486
It says:
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2487
Original text was recommended on the basis that it went further than we had to industrially.
PN2488
I'll just stop reading there. Did you ever see the original text that's referred to there?---I can't say with any certainty what the original text was.
PN2489
Yes, but you'd accept, would you, that there was an original text before the form of words that were drafted and set out at the third page of this document?---I would accept that yes, they would have started off with a set of words.
PN2490
Do you know who would have drafted those original words, whether it would have been done at Group HR or somewhere else?---I'm guessing. I would expect that because TOP HR had the run that they would have drafted the letters for sign-off.
PN2491
It goes on:
PN2492
Milano and Peter believed that it was better to have more than less in the letter and the message reaffirmed employment commitments whilst confirming the process parties went through to get to comparability of offer.
PN2493
Then it goes on:
PN2494
Industrially provided actual reference to Colonial EBA clause is not included -
PN2495
and those words "not included" are bolded -
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2496
and we are not providing absolute guarantee -
PN2497
and the word "guarantee" is bolded -
PN2498
of comparability of all offers because one off mistakes may have happened with individuals and so we want to explore issues with individuals rather than standing behind guarantee, then we are happy if you would like to strip detail or personalise the text.
PN2499
Did you engage in any discussion or correspondence with Mr Creighton about the matter that is raised there?---If we go back to my recollection of when we went through the process of how we would be able to say to people that these offers were reasonable we actually engaged a third party HR company to do a review of the methodology and process around how the offers were made up to make sure that the components of the offers stood arms-length scrutiny. Now, what didn't happen was every individual offer wasn't gone through prior to being given to each particular person and that's what they're referring to, but there was an independent review of the methodology and the make-up of the offers and how they confirmed the amounts and the basis of the superannuation and the continuity of the LSL, long service leave pieces and all of that.
PN2500
I suggest to you, Mr Pritchard, there were two messages in that paragraph that I've just read out to you. The second one is: you are to avoid - or the company is to avoid - providing an absolute guarantee of comparability of all offers?---Which is the point I just made as at this specific level. That's if there was an offer to me, Ken Pritchard, had that been reviewed, that it was absolutely comparable, it hadn't been.
PN2501
Yes, that's right because at no stage were individual circumstances taken into account, were they?---No, sorry. What we're saying in relation to the independent review of the comparability process, the third party review, the individual offers were not done by a third party offer by offer. What was done is that the - and obviously the HR people pulled the staff records and I wasn't involved in that process but there was the data, ie what they were being paid, was actually taken out of Colonial HR systems and used to actually prepare the letters of offer as to why it's all of the other conditions and accruals.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2502
The first part of the paragraph makes it very clear, I suggest to you, that the letter had to avoid saying that this is a comparable offer and consistent with the comparable offers referred to in the Colonial EBA clause?---I can only say that from my perspective that was a recommendation from HR for the way the letter was to be couched and then we would have acted on their recommendation.
PN2503
I put it to you that the request that was made or the requests that were being made in relation that this allegation was a comparable offer had two aspects. One whether it was in dollars and cents a comparable offer and secondly, whether it was a comparable offer of a kind that's referred to in the award or the EBA?---Again, most of these offers would have been contracts, individual contracts, I would have thought, not EBA, but again, I'm no expert in that regard. Most of these are IT professionals that are under separate contracts not the EBA.
PN2504
Do you know how many of the 370 or so who were offered contracts would have been covered by the award or the EBA?---I don't. I'm sorry, I don't.
PN2505
Would you have any idea?---No, I don't.
PN2506
No idea at all?---No. I'm only assuming, given that they're IT professionals and given that the remuneration to IT people - I'm speculating. I would have said that the larger degree would not be absolutely EBA. They would be specific contracts. That's my assumption.
PN2507
Did you realise that some of these people might have had entitlements under the EBA or the award?---Yes, there would have been some that would have had the EBA and that would have been - those entitlements, and are we talking about entitlements around conditions of service?
PN2508
Conditions and retrenchment pay, etcetera?---Yes and as I mentioned earlier, all of those things from length of service were actually taken into account and confirmed.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2509
Mr Pritchard, I'm suggesting to you that one of the concerns that employees had was the claim that was being made by Colonial that the offer that was being made by EDS was the offer of a comparable position of the kind that's referred to in both the award and the EBA?---Some, I would suggest.
PN2510
Some, so you are aware that that was one of the issues that was raised?---Well, we're playing with words and if I understand what I think you're saying there were some concerns that because people couldn't line up and verify item by item if they had a concern I would agree with that.
PN2511
Mr Pritchard, I'm putting to you that there was a debate going on within Colonial and amongst its workforce at the time about whether the comparable position provision in the Colonial Award and the Colonial EBA related to positions within Colonial or extended to positions that might be offered in EDS. Are you aware of that debate?---Not specifically the debate but the inference of what you say, I know that there was discussion.
PN2512
Yes and I'm suggesting to you that what you were being told, what you were being told in this e-mail was that there should be no reference in the letter to the Colonial EBA clause?---As one of the parties perhaps that may have been the message. More from a communication perspective, not necessarily to make a judgment.
PN2513
I suggest to you that the reason for the great care that was being shown here was to avoid the insertion into the letter of the claim that it was a comparable position within the meaning of the EBA clause?---Could you pass that by me again because I'm somewhat confused?
PN2514
Yes. I suggest to you that the care that was being shown here was care to ensure that the letter didn't say that the position was a comparable position within the meaning of the EBA clause?---At that point in time. My view on that at the time would have been I would have accepted the advice from HR.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2515
All right and then if I could just go down the page to an earlier entry. This is from Louise Denver to yourself and others and she says:
PN2516
I believe the text of the letter under the Colonial EBA, which is the banner under which the request was made, should not be an exhortation to take up the offer but a simple statement of fact that it is comparable to current conditions and should read something like this.
PN2517
And then a passage that's drafted is:
PN2518
You will have received your offer from EDS and it gives the Commonwealth Bank Group pleasure to advise that the EDS offer is comparable with the Colonial Services current terms and conditions.
PN2519
Now, again I put it to you that what she was saying in that memo to you, that e-mail to you, on 18 August was the same as what Mr Creighton said to you subsequently on that day, that is you have to avoid saying anything about the Colonial EBA and keep it simple and in my words, I suggest to you, fudge the issue?---I'd put it in two perspectives. I was one of the recipients of it. She is suggesting the words in a communication sense, not necessarily is she qualified nor - to advise on the EBA and wouldn't be expected to do that but was suggesting a draft of text to be confirmed by the various parties on the basis that if there was any conjecture around that.
PN2520
Yes, but she makes it clear, doesn't she, that in these words what the purpose of the response was? She says:
PN2521
I believe the text of the letter under the Colonial EBA, which is the banner under which the request was made -
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2522
I won't read the rest. You would have taken it from that, I suggest to you, that there was a concern amongst employees for Colonial to say, if it really believed it to be the case, that the EDS position was a comparable position within the meaning of the EBA?---There was a certain - and again, I go back to the point I made earlier. In Melbourne there were a group of people who wanted in writing that position and that's the response.
PN2523
Yes and I suggest to you that what Colonial engaged in was a strategy to apply maximum pressure to the employees to take up the offer and at the same time avoiding committing itself to a position about the terms of the EBA and for that matter the award?---I wouldn't necessarily agree that that was the logic on the basis that we would try to put pressure on our people at all. I think we were trying to actually adhere to some responses and obviously our people were responding in the way that they thought was prudent.
PN2524
In the way they thought - I will put it to you that the generally accepted view in Colonial at this stage was that the EDS offer, as an offer of employment outside Colonial, was not the offer of a comparable position within the meaning of the EBA and the award?---I've - on the member of people that have accepted it, and even people that have objected, I'm not sure if that's an actual true reflection of the - the total number of the recipients of offer.
PN2525
Well?---Because, quite frankly, there were quite a number that didn't raise this, and it was raised at a part - out of Victoria.
PN2526
Well, perhaps I didn't make the question clear, and I will put it again, I apologise if I made it unclear. I'm putting to you that, amongst management the people who are responsible for this project, there was no view that at that time that the EDS position was capable of being a comparable position within the meaning of the award and the EBA provisions?---From my position I was relying on - on people that had carriage of the - that piece of work to give us whatever position we needed to take for it, I can't comment on the - the - because I'm not - I'm not literate in the EBA at all.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2527
You are not?---I'm not literate - - -
PN2528
Yes?--- - - - in relation to the EBA.
PN2529
Did you know at the time what the EBA and the award said about comparable positions?---My experience in relation to comparability was around offer in relation to all of the terms of employment, in relation to salary, conditions and position and skill set.
PN2530
I will put the question again, did you know at this time what the award and the EBA said in relation to comparable positions?---Specifically, no.
PN2531
Did you know at the time that if an employee refused an offer of a comparable position, under the provisions of the award and the EBA, that the employee would not be entitled to retrenchment payments?---Can you put that to me again, I'm sorry?
PN2532
Did you know at the time, in August 2000, under the terms of the EBA and the award, that if an employee whose position was redundant was offered a comparable and rejected that offer of comparable position then that employee could be terminated without retrenchment payments?---The general context of the award statement, as I perceive what you ask me, is that at that time I was under the understanding that if a comparable offer was made and rejected that under the award and the EBA that retrenchment wouldn't have been paid, that is the advice I had.
PN2533
And I put it to you that you knew at that time that there was a debate as to whether or not a comparable position, referred to in the award and the EBA, had to be within Colonial or might be within EDS?---I'm not sure if I fully understand the answer that you're asking me to give?
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2534
Well?---What I'm saying, I'm of the assumption, on the basis of what I understood, that the offers were comparable, they were actually reviewed, I understood them to be comparable.
PN2535
Yes, but I'm asking you another question, I'm asking you if you knew at that time, in August 2000, that there was a debate as to whether or not a position in EDS could be treated as a comparable position for the purposes of the award and the EBA?---My understanding is that they could.
PN2536
Sorry?---My understanding is that they - they were comparable.
PN2537
Yes.
PN2538
THE SENIOR DEPUTY PRESIDENT: Now, that wasn't the question?---I - but I'm - - -
PN2539
Did you understand whether there was a debate about the - of the EBA and the award?---I wasn't involved with any of that type of debate, that's what I'm saying. My understanding was purely on the basis that what we were putting forward was comparable.
PN2540
No, it wasn't, the question was were you aware of there being a debate?---And the answer to that is no.
PN2541
Thank you.
PN2542
MR LAWRENCE: I tender that document.
PN2543
THE SENIOR DEPUTY PRESIDENT: Any objection?
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2544
MR GINTERS: No, your Honour.
PN2545
PN2546
MR LAWRENCE: If your Honour pleases. Now, Mr Pritchard, you have just had passed to you another bundle of documents, the first document is an E-mail from Mr Pellegrini to Mr Smith, with you copied in, on 19 August at 1500 hours and it reads:
PN2547
Just so we have some process framework around any rejections non acceptance of offers: (1) EDS deal with employee in terms of comparability of offer and refer to CBA group as necessary.
PN2548
And then there are points 2 and 3 and then the last line - perhaps I should read from the third-last line in the middle of the page at the start of that sentence:
PN2549
If discussions have taken place I will have a suggested letter ready as it will be important to act swiftly and decisively as many employees will be watching.
PN2550
And then over the page, this is not a letter to you but it is Mr Pellegrini on the same subject, he writes to Peter Hill, of course, it is in Group HR:
PN2551
Peter, would appreciate your advice, have prepared a rough template for those who decline, don't accept EDS offers for use down the track. We will obviously need to refine to suit the circumstance after having discussed it...
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2552
...would appreciate you giving it the once over and any suggestions you may have.
PN2553
Now, were you aware of the communications that Mr Pellegrini was having with Group HR in relation to the refusal of offers?---Apart from what I was covered on there would be a process of dealing with rejections. I took no part in the actual subsequent piece around non acceptance.
PN2554
Yes, all right, well, I will ask you to go to the third page, even though you are not particularly involved. You see at the last paragraph on that page, which sets out the proposed letter:
PN2555
With that we will provide you until (date) to reconsider the offer, should you still elect not to accept the offer the CBA group will take whatever action is deemed appropriate, which may well include termination of your employment as a result of redundancy with no retrenchments being made.
PN2556
?---I wasn't involved with this part of the process.
PN2557
Tender that if the Commission, pleases.
PN2558
THE COMMISSIONER: Any objection?
PN2559
MR DOUGLAS: No, your Honour.
PN2560
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2561
And that might be a convenient time.
PN2562
MR LAWRENCE: Yes, it would be a convenient time.
LUNCHEON ADJOURNMENT [12.57pm]
RESUMED [2.04pm]
PN2563
MR LAWRENCE: Documents that seem to be close at hand sometimes are not.
PN2564
THE COMMISSIONER: Indeed that is so.
PN2565
MR LAWRENCE: Mr Pritchard, would you have a look at the documents being passed to you? This is a bundle of documents which deal with the Hay report as it has been called and you will see that the first page of this bundle of documents is an E-mail from Mr Pellegrini to Nida Khoury at the Hay Group and you will see in the first line there is a reference to it being a draft report.
PN2566
We would appreciate your final report confirming whether remuneration generally, overall, is at the same or higher level. We also mention that over 90 per cent of offers made to date have been accepted -
PN2567
and then if I could just go down a bit further to just above the words "regards Milano".
PN2568
Please do not hesitate to contact me for any further information clarification. If possible, provision of the final report by Tuesday would be greatly appreciated -
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2569
and I perhaps should mention that Tuesday would have been 12 September.
PN2570
Just to complete the page, you will see further down is an -mail from Ms Cheerio to Mr Pellegrini in which she says:
PN2571
Attached is a draft report for your review and comments before we issue the final "official version".
PN2572
Now, if you turn to the next page, you will see the attachment which is dated 21 August, see that?---Yes.
PN2573
And the last page of the document which has a conclusion. The conclusion is this and I'm reading from the penultimate paragraph:
PN2574
The above review was made based on the information provided available and subsequent discussions and clarification from EDS', John Attwater. By and large, EDS' proposed terms and conditions appear to be fair, equitable and in some cases, even advantageous for Colonial Staff...(reads)...preferences.
PN2575
And, if you turn to page 4, just over halfway down the page, you will see in the table a reference to comparable position. EDS - perhaps I should say the Hay remarks are these:
PN2576
EDS' redeployment conditions appears to be similar to Colonials. However, the distance travel time issues are somewhat vague and undefined.
PN2577
Now, that of course, is a reference to comparable positions with the EDA Award.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2578
THE COMMISSIONER: Yes.
PN2579
MR DOUGLAS: EDS Agreement.
PN2580
MR LAWRENCE: Sorry, EDS Agreement, yes, of course. Perhaps I should tender that at this stage, your Honour.
PN2581
THE COMMISSIONER: Any objection, Mr Douglas?
PN2582
MR DOUGLAS: No, your Honour.
PN2583
PN2584
MR LAWRENCE: Now, what I'd like to do is take you back - or just take you to another document which will be passed to you now. This is a document, an E-mail to you at about that time, and it is a one page document. The first message on that page is from Mr Pellegrini to you about the draft report. Do you recall if you saw the draft report, Mr Pritchard?---It says here that it was attached so I'm presuming I have.
PN2585
Yes, all right. Do you recall if subsequently the draft report was changed in any respect of any significant respect?---Not that I'm aware but can I read this - - -
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2586
Yes. Well, I will just give you a moment to read through that document. It might be preferable to start at the bottom of the page, Mr Pritchard?---Okay.
PN2587
Yes, so starting from the bottom of the page is the communication that - - -?---gone through?
PN2588
PN2589
- - - we've just received and then it goes on to you from Mr Pellegrini, you then E-mailed Mr Pellegrini and asked him the question: are the Hay people happy to conduct forums to let out their results as discussed previously? Now, I take it from that question that there had been a discussion about Hay making presentations?---My view was that, yes, if we are going to review it, get the review done independently we should release the results.
PN2590
Yes. The results to the Colonial employees?---That's right.
PN2591
Yes, and then Mr Pellegrini says in relation to that question that you asked him?---I wouldn't recommend it especially given the people I've been dealing - been dealing - perhaps he means the word "with" should be in there?---Yes.
PN2592
Presenting would not be their forte. Wouldn't want it bogging down on the few aspects that do fall a little short. Time frames are also fairly tight. I would suggest we quote Hays' fair, equitable and sometime advantageous sentence, perhaps in the comparable confirmation letter to go out and see how that impacts, i.e. stick to the overall aspect rather than the line by line scrutiny.
PN2593
If I could just stop reading there, and remind you that the draft report had the following sentence in it:
PN2594
Nevertheless some of the conditions may not be perceived to be suitable by some employees who may have different special individual circumstances preferences.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2595
Now, Mr Pellegrini was obviously suggesting, I put to you, adopted reporting or a selective reporting of the Hay report to be distributed to employees. Would you agree with that?---I'd agree that he has suggested that the release of the report would create some issues in the way it was received and I would also agree that what he is saying here that people who did the report perhaps would, in his opinion, have some trouble in presenting. Now, I'm not quoting - I can only take his view from that because he dealt with them, but Perhaps there are two issues there, one is: should you have the Hay people present to the report to the employees, and the second one is: should the report, which, of course, was meant to be an independent report circulated to the employees?---Mm.
PN2596
Now, as I understand it, you were quite open to the possibility of the report had been sent out to the employees?---I was - at that point that - I was open to it on the basis - and looking at this E-mail it looks like it's been copied and forwarded. Yes, I was because I - I was basically - when we did present, we wanted to be quite open with everything that we had and it was only on Hay recommendation about some of the - some of the terminology that perhaps that may not have been the best outcome.
PN2597
Yes, because it was quite open to the possibility, wasn't it, that some individuals would not be advanced, or wouldn't see themselves advanced?---Basically, where I was coming from was more the fact to give them the view of what was - of what the report said.
PN2598
Yes, and - - - ?---But again, I made the comment before, I believe the methodology used around the report was not necessarily across all individual packages, so I'm assuming in relation to that that some of the comments they're making are on the basis that: because it's not done to that level of detail there could be anomalies.
PN2599
Well, was it your view that the task that was being undertaken was to look at this in the overall perspective rather than the individual perspective?---The review was done on the overall, as I understand it.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2600
Yes, so were you - - - ?---That was prior to - because I mentioned, I think, earlier, they didn't review each individual letter of offer at the detail level.
PN2601
But if somebody had have said to you at the time: look, I understand that it might be on average better for all of us but in my particular circumstance I'm worse off, or it is not a comparable offer, would you accept that that could be a possibility that would be consistent with the overall thrust of this report?---Yes, the way that I would have dealt with that would have been asking them to chat directly with the HR people in relation to the offer, and that was made at the time of the offers.
PN2602
Perhaps I didn't make myself clear?---I didn't answer your question, I know that, but what I'm saying is that if HR would have taken with all of the ones that - if they felt there was less than a comparable offer to take that up personally.
PN2603
Yes. Now, just to put again what I put a moment ago, was it your understanding that some individuals might be worse off but overall it was a better deal for all of the employees?---My understanding was that the majority of people were equal to/or better than, and I don't know that any of - in my opinion, my recollection was that there was nobody worse off, and I'm taking - and I go back to the point I made prior to the lunch-break, from the prospective of dollars, conditions of service, the superannuation benefits, the leave entitlements and the ongoing redundancy.
PN2604
Yes, thank you. In the report there's a reference to the home loans, I take this as an example, and this is page 5 of the draft report:
PN2605
EDS's grandfather scheme to cash out the home loan benefit of 3 per cent of the outstanding balance is in theory fair, however, we recommend using the new 2.13 FBT gross factor, effective 1 July 2000 instead of 1.9417.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2606
Do you know if there was any change in the position on that?---No, I'm not aware of that. I should just put some context around that, the 3 per cent was a very small number of people who had that facility, the majority of them had customer rates, best customer rates, so - but in relation to that number I'm - I'm not aware of any change, or I'm not aware that a change was made.
PN2607
All right?---But I am aware that, to my - from my recollection, there was no complaint from the 3 per cent' position people.
PN2608
You said that you thought that if people thought their position might have been disadvantaged they could have spoken about it?---Mm.
PN2609
I suggest to you that one of the matters that - or one piece of advice that was given to the Colonial employees was that the offers would not be revised?---I'm not sure if it was as categorical as that, I think - I'm not sure, to be honest.
PN2610
Yes?---I'm not sure if there was a - we certainly had an open policy in relation to discussion.
PN2611
I just haven't got the document in front of me, Mr Pritchard?---Yes.
PN2612
And obviously we need not get bogged down in it?---Yes.
PN2613
But I put it to you that one of the advises that was given, through the Q and As or one of the other on-line services, was that: you can approach us as to discuss the matter but we are not prepared to change the offer made to you?---I would think, on the basis that it was seen to pick up the key attendance and it satisfied the equal to/or better than there would be no comeback but I think - I would suggest that that's a question that HR would be much better able to answer than I.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2614
Yes, thank you, so if I can just come back to the question of whether or not the report be sent out, I put to you that: if you had confidence in the report, as showing what you believed it showed, there would be no reason why the report could not be circulated to the employees?---I generally supported openness of information in relation to the review.
PN2615
And, correct me if I'm wrong, there was an indication at some stage in the process that an independent assessment would be sought and be made available to the employees?---We made comment that we would be seeking an independent review and we'd let them know details.
PN2616
Yes, let them know details, and so I put it to you that, in order to let them know details of the independent report, they really should have the independent report rather than a conclusion from the report?---Yes, or - or a synopsis of the report.
PN2617
Yes, and, of course, this report is only received on 21 August after the offers had gone out?---After the majority of the offers had gone out.
PN2618
Yes, and it was the understanding, wasn't it, that the independent report would be made available before, or would be available before the offers went out?---I can't be absolutely certain of the timings but the intent was to make the availability as - as quickly as we had it.
PN2619
Yes, thank you, and what did you think about the proposition that Mr Pellegrini made to you that you, or the company should only quite some of Hay's words and not all of its conclusion?---What we - I think the conclusion generally summed up that the - that it was generally or overall in the same or a higher level.
PN2620
Yes?---And I think - and basically it satisfied the fact that we - that the actual offers were in fact better than - equal to/or better than.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2621
Well, was it your view that it wasn't necessary or even desirable to put in the words, or words similar to these: nevertheless, some of the conditions may not be perceived to be suitable by some employees who may have different special individual circumstances, preferences?---That's what it implies that everything is - could be wrong, does it not?
PN2622
Well, it may be taken that way, would you take it that way?---Well, that was the advice I was given that it was suggesting that perhaps the word could have been pursued to be incorrect.
PN2623
Because those words starting "nevertheless" undermine the words in the previous sentence, don't they?---It doesn't add value to it, certainly.
PN2624
Takes value away from it?---Yes, it does. It probably suggests that in a lot of things these days that are reviewed by independent bodies because of liability, you often get dilution.
PN2625
So you think they were being a bit careful in order not to expose themselves to liability?---Would expect that they'd be prudent in relation to any potential misinformation.
PN2626
Yes. Well, wouldn't it have been prudent for the bank to publicise both sides of the coin, so to speak?---I think there's two things to be considered. The fact that the offers were accepted and were generally equal to or better than and that was largely the rank and file receipt in relation to the extra incentives. So I think in practice they were seen to be equal to or better than and I would also agree that to be totally transparent the report could have been released.
PN2627
Yes, thank you. I tender that document, if the Commission pleases.
PN2628
THE SENIOR DEPUTY PRESIDENT: Any objection?
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2629
PN2630
MR LAWRENCE: If your Honour pleases.
PN2631
Mr Pritchard, could you have a look at the documents now being passed over to you. I will give you a moment to read it?---Yes.
PN2632
You will see this is an E-mail from the help desk, Colonial, Melbourne dated 1 September 2000. It is to all - well, to a larger number of Colonial employees. I'm not familiar with the code that is there. Are you familiar with the code?---Which code are we talking about?
PN2633
It is addressed to and it has got (g) followed by the letters "CIS All"?---Well, that would be Colonial Information Services, All.
PN2634
Yes, and that would include Sydney as well as Melbourne?---Absolutely.
PN2635
Yes?---Colonial had a totally different intranet to the Commonwealth Bank and this message was passed on and all of the communications in relation to Colonial IT were sent to all IT and that mail address, that's a group address, so that all - and that was made as a matter of form. Anything that went out went to all.
PN2636
Yes. You will see it is from - well, the individual who is nominated there is Skip Gray from EDS but it has come from the help desk of Colonial in Melbourne?---Yes.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2637
Were you aware that a document like that was being distributed?---I recall the issue and I recall that we did make - communicated it, yes.
PN2638
Yes. It followed a conference in the Commission and all the company was prepared to do was to provide a 24-hour extension to the time line, is that correct?---I didn't actually go to the Commission so I'm hazy on what the bid and counter bid was, to be honest. I can only assume that that was the way it came out.
PN2639
Yes. Could I suggest to you that at this stage Colonial and CBA on one hand and EDS on the other had locked themselves into an agreement for a transition on 1 September?---That was a different thing.
PN2640
Sorry?---That was the transition to management. They took over acting as our agent on a management basis, of which we were hoping - which was around the maintenance and environments and the running of the systems. So they took management control as an agent for us at that point.
PN2641
The agreement that you had in that letter of 11 August was that 1 September would be the changeover date?---Operative date, yes, for that purpose, which included some of the IT people issues. However, at this point not all offers were actually placed, not all offers were accepted and not all offers were under this 24-hour blanket because there was allowances made for everybody that was on holidays and/or had any other reason why they needed to get an extension of time.
PN2642
Yes, thank you. I tender that, your Honour.
PN2643
THE SENIOR DEPUTY PRESIDENT: Any objection?
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2644
PN2645
MR LAWRENCE: Mr Pritchard, there are just a few matters that I want to take you to in your statement?---Yes.
PN2646
I will go through it in order. Paragraph 4, you made a change in your statement. Previously you had said that you managed the integration of the programme but you have indicated you assisted in it?---I was making the point there in relation to - my role was primarily around the integration of the systems and the environments and from the HR perspective I helped in actually - as part of that team.
PN2647
Yes. So in HR terms who did you assist or work with?---Well, I came in as part of - I worked with TOP HR which was Milano and team, Gary Sepping at that stage when he was leading that team. I worked with Group HR as appropriate from the HR perspective when I was asked. I also worked with the - in the technical side in relation to what we were going to actually transition - I'm talking about systems, processes, infrastructure, all of that, and that was my primary role, working with the Colonial IT management.
PN2648
Yes, thank you. Now, you mentioned Mr Sepping?---Yes.
PN2649
Was he a Colonial - - - ?---CBA.
PN2650
CBA, was he?---Yes.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2651
Was he in Group HR?---No, he's in TOP HR.
PN2652
TOP HR?---Yes.
PN2653
I understand, in CBA?---In CBA, yes, that's right. Also Peter Marshall and also Peter Fleming.
PN2654
Where were they located?---Peter Marshall was the Chief Manager from Colonial HR and Peter Fleming was the CEO of Colonial IT. In the original - at original conversion time - when we acquired Colonial Warwick Foster was the Group CEO - CIO, sorry, and Peter Fleming was the All Finance sector of Colonial IT. He then elevated to the Acting CIO of the Colonial Group.
PN2655
Yes, thank you. The HR policy was, I suggest to you, coordinated by and determined by the Group HR?---Yes, but the work being driven in a doing sense from TOP HR because they were responsible for the technology component of our HR business.
PN2656
Yes. Now, in paragraph 6 you refer to the CBAs purchase of Colonial in May 2000. The bank decided to outsource to EDS. Do you remember how that decision was made? Was it made by the board of the CBA or by the executive management committee or by some other group within the organisation?---Executive management. What was reviewed at that time was whether or not we would, you know, was there a value in maintaining two separate IT departments and the view was no, consistent with our IT outsourcing strategy we would treat Colonial in the same way.
PN2657
So this is the executive management committee of the bank, CBA, comprised of the chief executive plus others?---Yes, that's right.
PN2658
Yes. They made the decision and I would suggest to you would have given some direction as to how that should occur?---Yes, the direction came - sorry, the recommendation would have come out of Technology Operations and Property.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2659
So the recommendation to the executive management committee would have come out of TOP?---Yes.
PN2660
Would have been a written recommendation to the executive management committee and they made a decision?---I'm not aware if it was a formal written - or whether Russell Scrimshaw as the head of TOP in his discussions with the executive committee actually came to that decision but that was the directions I was given.
PN2661
I would suggest to you that whether it came out of a written proposal or an oral proposal there would have been a written response from the executive management committee?---I'm not aware if there was or there wasn't.
PN2662
Yes, all right. Do you know if that response of the executive management committee would have addressed Human Resources issues?---Consistent with our approach in '97, learning on the lessons of '97.
PN2663
Yes, so the answer is yes?---This is the approach, yes. Yes.
PN2664
All right. In substance would you say that what they decided to do was to continue the 1997 exercise or repeat the 1997 exercise?---Yes.
PN2665
Now, in paragraph 10 you refer to Mr Pellegrini as the main bank employee who was involved in this process. Had Mr Pellegrini been involved in the 1997 process?---Yes.
PN2666
Thank you?---He, with a number of others.
PN2667
Yes, thank you. Now, could I come to paragraph 13. This is where you refer to the June meetings. Are these the first round of meetings that you referred to earlier in your evidence?---That's right.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2668
Thank you. You say that you attended the presentations in Sydney of that first round but you didn't attend the presentations in Melbourne?---That's right.
PN2669
All right. Now, at the bottom of that page - I'm sorry, I'm not sure what page we are on but paragraph 18 - you say that you did presentations on 19 and 20 July in Sydney and Melbourne and that details about the offers of employment from EDS and what would happen if these offers were rejected were provided to the employees?---Yes.
PN2670
You have given evidence today and I don't want to go over it - was the evidence that you gave earlier evidence that related to this particular passage in your statement?---Yes, the three passages of time was the first presentation by Russell which was covered on the previous page. The second lot were EDS doing their piece and these were when we were starting to get ready to prepare the staff for the offer process.
PN2671
Now, in paragraph 19 you made some changes and your original statement had this - this is about the meetings that you referred to. I will just give you a moment to look it up, it might assist you?---Yes.
PN2672
You will see about six lines down:
PN2673
All options would be considered, including redeployment in the Commonwealth Bank group, ongoing secondment to EDS and as a last resort redundancy. It was clarified by me that should employees who reject a comparable offer from EDS be retrenched they would not be entitled to redundancy pay.
PN2674
Now, why did you take those words out?---Well, originally when we talked about - when I did my statement - the original statement came out of a discussion when I was asked and when I reviewed it I basically came back to the point that the issue around the rejection was on the basis that comparable employment was the way that we were going forward and we would need to understand the rejection process.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2675
It is clear, isn't it, when you made your statement at the outset of these proceedings you said:
PN2676
...should employees who reject a comparable offer from EDS be retrenched they would not be entitled to redundancy pay.
PN2677
?---Yes.
PN2678
That was - - - ?---It was in context with the presentation.
PN2679
Yes, that is right. In fact, you said it, didn't you?---Yes.
PN2680
Yes?---Yes.
PN2681
So it is not as though you didn't say it?---No.
PN2682
No. So why did you take it out of your statement?---The key at the point and the key in the statement was on the basis that we would consider why they would reject.
PN2683
All right. When did you take it out of your statement? When did you decide that you should take it out of your statement?---On my review.
PN2684
When was that?---Where I've been discussing this I think in the last month or so or last 6 weeks.
PN2685
Last 6 weeks?---6 weeks or so ago I think was when the original statement was developed for me. It was after my review of that.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2686
Now, you refer to KP3 in this paragraph?---Mm.
PN2687
KP3 was presented at the August meeting, wasn't it?---That's right - I'm not exactly sure what the dates - I'm somewhat confused. It was in the sequence of things and this is where the statement was a little bit out of sequence and that's why I made some changes. The - it was the third set that I explained this morning.
PN2688
Yes?---Yes, when we - that's when I made the statement KP3.
PN2689
Yes. So if we just look at your statement, paragraph 18 deals with 19 and 20 July, that is the second round?---The presentation in relation to KP3 is not - is the third round.
PN2690
Yes, thank you. Yes, and paragraph 19 deals with the third round?---Yes.
PN2691
Now, in paragraph 19 you also say - I withdraw that. Perhaps with respect to those meetings in August, the third round, two of the persons for whom I act have put in statements - well, more than two but two have dealt with in specific terms the meeting on 16 August in Melbourne?---Yes.
PN2692
Ms Calabrese says in her statement:
PN2693
On 16 August 2000 I attended a meeting at which Ken Pritchard from CBA TOP informed us that the CBA had received legal advice that transfer of jobs to EDS was seen as transmission of business and that Colonial employees who rejected the EDS job offer would not be entitled to any retrenchment benefits as the EDS offer was comparable as required by the EBA.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2694
?---I'm not sure if they were my exact words but what I did say at that meeting, that under the advice that we had been given that retrenchment payments wouldn't be if equal or better than offer or comparable offer was made.
PN2695
Yes. Well, do you accept that you used the term "transmission of business"?---I can't be positive but that's a term that I do recollect.
PN2696
Yes. You recollect it being used at that meeting or do you recollect it being used in other discussions?---I certainly recollect the transmission of business as used in other discussions and I'm not 100 per cent positive either for or against, whether it was used in that term. I could - if it was - it's likely that it was.
PN2697
Yes. So that is your recollection?---Yes.
PN2698
Yes. You were telling the employees at that meeting that that was the legal advice that the bank had received?---That was the bank's position, yes, on the advice that we were given.
PN2699
Yes. I put it to you that an employee listening to what you said on that occasion would be expected to have had a clear understanding that the bank's position was that they were legally entitled to do what you referred to?---On the advice I was given and the position at that point in time was exactly that, that retrenchment payments wouldn't be available if a comparable offer was refused.
PN2700
Yes. When you say advice, legal advice?---I was given - anything in relation to the EBA and what was coming through was coming through HR and I was accepting that as being the advice that was - I could respect. Why I made the comment was to make sure that people understood what our position was.
PN2701
Yes. I take it you understood that the advice you were getting from HR was passing on the legal advice that the bank had got?---Yes, that was my presumption.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2702
Yes, thank you. Mr Beresford said this in his statement:
PN2703
On 16 August 2000 CBA and EDS management held another presentation to ex Colonial IT staff. The presentation was intended to follow up on the earlier presentation and to confirm in person the answers provided to the frequently asked question section on the internet. Ken Pritchard as Senior Manager from CBA Technology Operations and Property stated that CBA had received legal advice that by outsourcing its IT operations to EDS CBA was enacting a transmission of business. This meant that ex Colonial employees who did not accept the EDS offer of employment would not be entitled to any redundancy payments as the EDS offer was for a comparable job.
PN2704
You would agree with that?---Yes.
PN2705
Thank you?---I'm not exactly sure that the words are in the context of what I said but the general spirit is correct.
PN2706
Yes, thank you. Now, in paragraph 20 you say that there were question and answer documents. These were on the intranet, Colonial intranet site?---Yes. Is it 20 or 21?
PN2707
I've got 20 in - I'm looking at the marked-up copy rather than the final one?---We're just saying that - it doesn't mention the intranet, it's just saying that - - -
PN2708
No, no, sorry, I added that in?---Okay, but you're right, the repository for all the Q and As, once they were agreed, was on the intranet, Colonial intranet.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2709
Yes. Could I just take you to paragraph 22. You refer to the EDS services. Was it the arrangement that if there were further inquiries they were referred to Colonial? Further inquiries about entitlements as Colonial employees?---Yes, anything that was needed to be clarified from a Colonial perspective was done through the Colonial HR people and that was Peter Marshall and Carolyn Barbuto and there was one other chap but the name escapes me just at this point that ran the - did all the work on that from that side.
PN2710
Yes, thank you. If I can now take you to paragraph 29. You say there that the majority of employees' acceptances or rejections of the EDS letters of offer were completed in or about early October 2000. I suggest to you that the overwhelming majority of those who responded had responded by 1 September?---Early September there was a good percentage and I'm thinking that's probably around 60 to 70 per cent but there were a number who were either on leave but there were some issues in relation to getting the offers out to everyone. So what I'm referring to there is almost 99 per cent of people had responded by that early October date and that included people who had returned from leave and so on.
PN2711
Yes. From early September or thereabouts you had no further role in this HR side?---Limited involvement from the HR side because Peter Fleming and also Peter Marshall were well known to Colonial people. They were based in Melbourne as well and the majority of that conversation around that was done in Melbourne.
PN2712
I have no further questions, Commissioner.
PN2713
THE COMMISSIONER: Very well, Mr Ginters?
PN2714
MR GINTERS: No, I have no questions for this witness.
PN2715
THE COMMISSIONER: Very well. Mr Douglas?
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2716
MR DOUGLAS: Yes, thank you, your Honour, a couple of questions. Could the witness be shown PF12, 13 and 18, please? Look at PF12, firstly. This is the briefing for Colonial IT presentations 19, 20, July. That is the second round of - - -?---?---Second round of - - -
PN2717
- - - second phase that you refer to?---Yes, and that is where it was more around telling people what EDS was about - - -
PN2718
Yes?---and outlining a process of how they would go forward.
PN2719
Okay. You were at both of those presentations?---I wasn't at - was certainly at the Sydney one.
PN2720
Which was the 19th?---Yes, and I was at the Melbourne one in the audience.
PN2721
So you were at both?---Yes.
PN2722
Do you recollect whether the various questions raised in this document and the answers were actually part of the presentation or was this document for some other use?---No, the - there's a copy of the presentation that I think is available but the - it was more to actually say who EDS was and to explain to the - - -
PN2723
You are talking about what was the purpose of the presentation?---Yes.
PN2724
Yes. What I'm asking you, what was the purpose of - I can read the heading: briefing for Colonial IT Presentations, on those days, but was the purpose of this document and was it used at those meetings?---I, I'm presuming that it was just to prepare people in - on the basis if there were questions leading out of this line, they had an understanding of how they would answer.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2725
Okay. Well, can you - you in effect, five questions under the heading: Recommended Answer to Questions Submitted, can you recollect any of those questions being - at least were questions coming from employees, members of the audience?---Yes.
PN2726
Can you recollect any of those questions being put? Let me go through them: What will happen if I don't accept the offer - - -
PN2727
MR LAWRENCE: I object to this. It is one thing to ask the witness, can you recall what questions were asked and - - -
PN2728
MR DOUGLAS: Well, I will ask him that. Do you recall any of the questions that were asked on either of those occasions and if so whether any of those questions are in accord with questions in this document?---No fully.
PN2729
MR LAWRENCE: That last - that is the sting in the tail, that is what I objected to.
PN2730
MR DOUGLAS: Well that is not leading, your Honour.
PN2731
THE COMMISSIONER: No, I don't think that is leading.
PN2732
MR DOUGLAS: No.
PN2733
Well?---Okay, the questions that were asked were, one around placement, bloke with like, how can I accept an offer from EDS when I don't know what sort of a job I'm going to.
PN2734
Yes?---The other them was around: if I don't accept the offer what will happen to me? Am I entitled to be - retrenchment and I don't recall anything about forced secondments at that one.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2735
Yes. Do you recall anything about secondments, not just forced secondments?---No, I don't recall at that point that secondment was a high level. It was more on the basis of the acceptance of offer that I'm going to a company that I don't know - - -
PN2736
Yes?---and I don't know exactly what role I'm going to.
PN2737
Yes?---With the higher level themes and if I don't accept the offer, what will happen to me?
PN2738
Okay. Can you recollect whether, say just take the Sydney meeting, can you caste your mind back there? It is a couple of years ago?---Yes.
PN2739
How many people would have been at that meeting, employees? Approximately?---It was held on the ninth floor of 127 Pitt Street which is Pitt Street, Martin Place - that holds a tad over 200 people and the auditorium was full.
PN2740
The Melbourne meeting the following day?---The Melbourne meeting was held in the basement of the three - the main CBA building and it would have held somewhere around I would have thought, seventy - fifty to seventy, give or take.
PN2741
Well you are saying: it would have held. Do you recollect approximately?---Yes, well it was a smaller set of meetings. There was less people in Melbourne than there were in Sydney.
PN2742
Yes. Are you - - -?---In fact in Sydney I think they ran - in that first one - they ran two sessions, I think, so there were approximately - the first session was the biggest one and the second session was a bit smaller.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2743
Okay, so two hundred odd at the first one in Sydney. How many?---Roughly a hundred at the next, and I would think about seventy in Melbourne.
PN2744
In Sydney, if I understand what you have said, you were part of the presentation group in Sydney but not in Melbourne?---No, no. The first set of presentations done by Russell Scrimshaw which was phase one about what was CPA, I was in the Sydney audience. I wasn't in the Melbourne audience.
PN2745
I'm talking about 19, 20, July?---Yes, the second one I was still a participant in the audience.
PN2746
Okay. Now take the - did you attend both Sydney meetings on the 19th?---Yes.
PN2747
Take the first meeting. Have you got any recollection as to whether - how many questions might have come from the audience?---There wasn't a lot. Probably a half a dozen or so.
PN2748
Have you got any recollection, within that range of half a dozen, what the subject matters were?---Some of them were also around: what are my opportunities in EDS, as well. There was two different themes in relation to - Sydney appeared much more open to the EDS offers. They had some questions around, what's in it for me, but not to the same degree of intensity within the Melbourne environment, so they were trying to seek information about EDS.
PN2749
Well, can you recollect at any of the Sydney meetings, the question being put as to what is going to happen to me if I reject an offer?---?That was in the third set of meetings when we actually got down to the - how the offers were going to be distributed.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2750
So you are talking 14 August, 14 - 16 August, were you?---If they're the dates, it's the third phase of those, yes. When there were actually - when EDS was starting to outline, what are the components of the offers at a generic level.
PN2751
Okay, so you are saying in 19, 20 July that question didn't come forward in any of the meetings?---There were questions around, what is in it for me, but not to a great level of detail because they hadn't worked that all through and they - - -
PN2752
But the issue, what happens to me if I don't accept an offer?---Wasn't high on the agenda because of the fact that we hadn't got to that offer in acceptance process.
PN2753
I'm asking you for recollection. Can you recollect whether it was 19 - the meetings, two meetings in Sydney, 19 July, and the one meeting in Melbourne on 20 July, can you recollect whether that was a question, an issue that came to the fore?---Yes, I'm fairly positive that there was a question to that effect.
PN2754
Yes. At each place, or - - -?---At each place.
PN2755
At each place?---Yes.
PN2756
There were more than - was there more than one question asked at each place. I know you have said at least half a dozen at the first meeting in Sydney?---Yes. I think it covered people, it was a general question that people wanted to hear the answer - - -
PN2757
Yes, and - - -?---so there wasn't a lot of questions, pulling it down to the level of detail, because it was clearly stated they didn't have the detail.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2758
Well, the second meeting in Sydney and the meeting in Melbourne, what are the subject matters, apart from what will happen to me if a reject the offer?---I think, what can I expect in EDS? How do I know that I can be placed? What efforts are you going to make to place me? I'm going from one company to another, what's in it? You know, what are those type of - from a professional perspective, what can I expect?
PN2759
You said, not many questions came forward at the first meeting in Sydney on the 19th, what about Melbourne, was there - - -?---Melbourne was more round the retrenchment payments.
PN2760
Right, and did a lot of questions come forward in Melbourne, or was - - -?---More so in the subsequent meetings because of the - - -
PN2761
I'm talking 20, 20 July?---No.
PN2762
No?---No.
PN2763
It was - - -?---As a result of those meetings there were a number of E-mails and things started to occur.
PN2764
Okay?---It was determined that we needed to be down there to answer their questions.
PN2765
Okay. Can you look at PF13, please?---Yes.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2766
I don't think - you told us who Louise Denver is. I don't think anybody tried to place a date on this document except that it is obviously July number 1. If you look down the bottom at the answer A7: Commonwealth Bank is anticipating that by Friday 14 July, etcetera. Having in mind that answer, are you able to place a date, an approximate date on this document, this top Q and A?---I'm expecting it is probably early July, first week or so.
PN2767
Okay, that is the best you can do?---Yes.
PN2768
All right, and finally if you can go to PF18, this was the CBA-EDS, question and answer form, Wednesday 16 August, and this was in the third phase?---Yes.
PN2769
Now, you will notice on the first page, right in the middle about point 5 and then down, the bottom and over the page, in the middle and on the third page, spread throughout that page, that there a number of questions set down on this - in this paper, but no answers provided. Go back to the first page: What is the fine print in the terms and conditions - that is the middle of the first page and there does not seem to be an answer to that. Then if you go to the bottom of the first page: what happens if we say no to the offer? There does not seem to be an answer to that. Then if you goIf you go to the middle of the second page there is - - - ?---No, there is an answer on page 2.
PN2770
Page 2?---To the what are the options.
PN2771
Yes, there's an answer to that one but not the earlier question?---Okay, sorry.
PN2772
If you go over the page at about point 3:
PN2773
How can we accept the offer when CBA Colonial are not answering our questions?
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2774
There's no answer there and there's no answer to the next two questions. Can you tell me why that is and what was the purpose of this document?---I don't know who - I don't know where this document came from to be honest and I know that what they did is they captured a lot of the questions that came out of the e-mails and logged them and it may be this was a source document pending - to get a series of answers. I can't be sure, but they are the types of questions that would actually be coming through, either an e-mail or a phone help desk.
PN2775
The heading: Question and Answers Forum, does that give you any guide?---It doesn't.
PN2776
No. So that's the best that you can tell us as to your view of what the purpose of this document is?---I mean, I can go through these in detail and give you a response of where I think we were at that time.
PN2777
No, no, I'm just trying to find out why the document was prepared which seems to be half-prepared in the sense that there are a whole bunch of questions that have no answer set alongside them?---Yes. I'm a little confused because I don't know what the audience to the document was.
PN2778
Do you know whether there was in fact an audience for this document?---Well, I don't know this document to be honest and I - all I'm saying is that there were a series of documents that came out of Q and As. These are questions without answers and obviously it was an aggregation to try and get something. Now, I'm not sure when this document would have been put together but it had obviously sort of - it says that there was going to be a meeting on 16 August and I don't know who actually prepared it. So I can't be any more helpful than that, I'm afraid.
PN2779
Could it be that the meeting had occurred?---It could have. It could have because it could have been questions that there was no answer for.
**** KENNETH JOHN PRITCHARD XXN MR LAWRENCE
PN2780
I have no further questions, your Honour. Could the witness be excused with your leave?
PN2781
THE SENIOR DEPUTY PRESIDENT: Very well. Thank you, Mr Pritchard?---Thank you, your Honour.
PN2782
That does complete your evidence.
PN2783
MR LAWRENCE: Just one thing, your Honour. The witness did say, I think in his first answer in re-examination that there is a document which was used for presentation and it is - I've got it written down - available. I'm not sure the witness used that word. I'd ask for that document?---Second presentation.
PN2784
THE SENIOR DEPUTY PRESIDENT: Well, we must identify the document.
PN2785
MR LAWRENCE: Yes, well perhaps if your Honour would grant me leave just to clarify that I might be able to make the request in more specific terms.
PN2786
MR DOUGLAS: I don't object.
PN2787
PN2788
MR LAWRENCE: Mr Pritchard, in the first answer, as I recall it, in re-examination you referred to a document?---Yes.
PN2789
It may have been in connection with the second round, or second presentation?---It was the second - it was the actual second presentation document.
**** KENNETH JOHN PRITCHARD FXXN MR LAWRENCE
PN2790
Yes and that was a document that you went to the presentation with, was it?---No, that was - I've got a copy of the presentation, the format, the way that it was run.
PN2791
Yes and that's a different document to the document that you've attached to your statement?---Yes, it's a different document to these because it wasn't my document.
PN2792
Well, do you know who prepared it?---Yes, it was prepared by EDS.
PN2793
Yes?---I have a copy of it outside, I think.
PN2794
MR DOUGLAS: I think it's in Pellegrini's statement.
PN2795
MR LAWRENCE: All right, well - - -
PN2796
THE SENIOR DEPUTY PRESIDENT: That's the document you want.
PN2797
MR LAWRENCE: Yes, if I could - if the witness could provide it to Mr Douglas or his instructors and could pass it on to us, if it's a new document, I'd be pleased, but if it's a document we've already got I'm not fussed by it.
PN2798
THE WITNESS: It's quite likely you may have it but what I was referring to was the second presentation format.
PN2799
MR LAWRENCE: Yes, thank you.
**** KENNETH JOHN PRITCHARD FXXN MR LAWRENCE
PN2800
MR DOUGLAS: Your Honour, just before the witness does depart, it's not a question I want to put to him but he was asked about a question which went to the coverage of both the award and the agreement. Do you remember the discussion about he was referring to IT professionals and spoke of them being excluded from the coverage of both the award and the agreement?
PN2801
THE SENIOR DEPUTY PRESIDENT: Yes.
PN2802
MR DOUGLAS: I just want to say in the witness' presence, your Honour, that both the award and the agreement - and the agreement in particular - refers to the coverage was going to all employees of Colonial including in the case of the agreement information technology employees so I don't want it to be said that the witness wasn't aware of that, your Honour.
PN2803
THE SENIOR DEPUTY PRESIDENT: I see.
PN2804
MR DOUGLAS: I don't put it to him because obviously he's not aware of what's in the documents but they do have that coverage.
PN2805
MR LAWRENCE: Thank you, Mr Pritchard?---Thank you.
PN2806
PN2807
MR DOUGLAS: I call Milano Pellegrini.
PN2808
THE SENIOR DEPUTY PRESIDENT: Perhaps it might be sensible, I intend to sit on a little today, if that's not inconvenient for the parties, until half past 4 or a quarter to 5.
PN2809
MR DOUGLAS: I have a problem after half past 4, your Honour.
PN2810
THE SENIOR DEPUTY PRESIDENT: Well, we will go to half past 4 but even going to half past 4 we will have a 5-minute adjournment.
PN2811
MR DOUGLAS: Thank you.
SHORT ADJOURNMENT [3.11pm]
RESUMED [3.29pm]
PN2812
MR DOUGLAS: A request, your Honour, for a change in the sitting times has originated from me but I can say my friends are in agreement, if that's suitable to the Commission.
PN2813
THE SENIOR DEPUTY PRESIDENT: Yes, certainly, Mr Douglas and the others, 4.15. Just before you go on, 9.30 tomorrow?
PN2814
MR DOUGLAS: Yes, that's fine.
PN2815
THE SENIOR DEPUTY PRESIDENT: As I said, not beyond 3 and just for the thought at the moment, whether the current timetable will complete everything that's meant to be completed is now perhaps a matter of some debate. I do have the 8th free if the parties are free.
PN2816
MR DOUGLAS: I don't, your Honour.
PN2817
THE SENIOR DEPUTY PRESIDENT: We will find out another time. I just thought I'd mention it now rather than later if that's the case. If it's not free for any one of you we won't sit on the 8th but we will work out a date if we need to in Melbourne on the Tuesday.
PN2818
MR DOUGLAS: Okay. Well I think, your Honour, the cross-examination of my learned friend's witnesses will probably go more than a day anyway and I will need to call some evidence about the history of the award.
PN2819
THE SENIOR DEPUTY PRESIDENT: Yes, you've foreshadowed that.
PN2820
MR DOUGLAS: Yes, but that will be short and done by as much documentation as possible.
PN2821
THE SENIOR DEPUTY PRESIDENT: Yes. Yes, well we will approach further hearing dates in Melbourne.
PN2822
MR DOUGLAS: Yes.
PN2823
THE SENIOR DEPUTY PRESIDENT: They won't necessarily be in Melbourne because they may well involve Sydney witnesses.
PN2824
MR LAWRENCE: Yes. It might be appropriate if I say something briefly at this stage. I'm not surprised by the comment of my learned friend about possibly calling more evidence because he did foreshadow it the other day in relation to the award history.
PN2825
THE SENIOR DEPUTY PRESIDENT: Yes, that's all I'm talking about.
PN2826
MR LAWRENCE: Yes. One matter that I am concerned about is that it's apparent to us that not all of the documentation has been produced in response to the subpoena. To some extent we've addressed it by saying to my learned friend and his instructors: well, these are the categories of documents and we think these particular documents exist. I suppose it's not for us to tell them what documents they've got but it just does seem to us that there are some that are missing. Those documents would be relevant, or could be relevant perhaps I should say, in relation to the witnesses that are being called, or have been called, by my learned friend, or at least Mr Pellegrini in particular because it does seem from all the material that Mr Pellegrini was more involved in these issues than others and it may be that I would want to put some extra matters to Mr Pellegrini, which leads me to the point that with the cross-examination of Mr Pellegrini and possibly some further cross-examination of him, plus the evidence of my learned friend's witness in relation to award history, that he's being pushed out before we actually get into the interveners in the respondent's case and the question is whether we use next Tuesday as a day standing alone for that purpose or deal with it in some other way.
PN2827
THE SENIOR DEPUTY PRESIDENT: Yes, you mean vacate Tuesday and have a couple of extra days some other time.
PN2828
MR LAWRENCE: Yes. It would certainly be my preference to have our people, the five of them, on consecutive days if we could find consecutive days and that would leave out next week, but next week is a problem, not because of a lack of consecutive days but because of the expectation that we have that the Bank's case won't be finished by next week and we think the Bank's case should be finished and it shouldn't be broken up. We're entitled to see the material they've got or finish off - have their material complete before we go into evidence.
PN2829
THE SENIOR DEPUTY PRESIDENT: Well, What you say has some merit. What I suggest you do is discuss it amongst yourselves first. If you can come up with an arrangement which requires me to vacate Tuesday and fix two days in Melbourne later then I'll be amenable to that, but we will need to do that tomorrow.
PN2830
MR LAWRENCE: Yes and I suppose the possibility is that we don't vacate Tuesday completely but if Tuesday would be convenient to the Commission and my learned friend to complete those other matters, if it's insufficient time of course, and that would be one way of not losing the day.
PN2831
THE SENIOR DEPUTY PRESIDENT: But Mr Pellegrini is Sydney-based, isn't he?
PN2832
MR DOUGLAS: Yes.
PN2833
MR LAWRENCE: Yes, sorry I was thinking that we could possibly come to Sydney. Now, I don't know if you're going to Melbourne for any reason other than Tuesday.
PN2834
THE SENIOR DEPUTY PRESIDENT: I'm not. That's why I'm completely flexible.
PN2835
MR LAWRENCE: Yes.
PN2836
THE SENIOR DEPUTY PRESIDENT: That's right.
PN2837
MR LAWRENCE: Obviously we're reluctant to come up to Sydney too readily because - - -
PN2838
THE SENIOR DEPUTY PRESIDENT: Yes, there's a cost involved, yes.
PN2839
MR LAWRENCE: - - - of the cost involved, but nevertheless, we'd like to get the thing moving along. We don't want to slow it down. So that is a possibility.
PN2840
THE SENIOR DEPUTY PRESIDENT: Yes. Well, as I say, I think it's best if I leave it to you at this stage.
PN2841
MR LAWRENCE: Yes.
PN2842
MR DOUGLAS: Your Honour, firstly, we wouldn't have sufficient time to prepare this historical evidence for next Tuesday. Secondly, I don't have a problem with my learned friend's two witnesses being called on two consecutive days and he's got a problem with Steve Young who is away on leave anyway.
PN2843
THE SENIOR DEPUTY PRESIDENT: That's right. There is someone who's in difficulty.
PN2844
MR DOUGLAS: So it can't be dealt with next week. So yes, we will co-operate with that, your Honour. It seems to me that there won't be anything to do on Tuesday if the historical evidence I'm talking about is going to have to go in before the cross-examination of my friend's witnesses.
PN2845
THE SENIOR DEPUTY PRESIDENT: Yes.
PN2846
MR DOUGLAS: The other thing I should say, your Honour, those instructing me have been very diligent in putting requests to our client as to - in relation to documents. Specific requests have been discussed and we've been told repeatedly - I'm aware of three occasions now where there are no more documents in existence. So my learned friend might say on the material that's before the Commission at the moment, or what he's seen, there does appear to be in his view other documents. Well, I'm simply saying we've been told there are not other documents.
PN2847
THE SENIOR DEPUTY PRESIDENT: Yes. All I can suggest about that is that if you can specify what it is that indicates the documents that must, in your view, be available, they could be put.
PN2848
MR DOUGLAS: Well, that's been done, your Honour, in reality.
PN2849
THE SENIOR DEPUTY PRESIDENT: Has it?
PN2850
MR DOUGLAS: Yes and we've made specific inquiries consistent with what's been put to us and the answer we've got in each case is no. There are no such documents.
PN2851
THE SENIOR DEPUTY PRESIDENT: Yes. Well, I still don't take away the suggestion I've made. If you can be as specific as possible and it's new, then put that to the other side.
PN2852
MR LAWRENCE: Yes.
PN2853
THE SENIOR DEPUTY PRESIDENT: But I hear what Mr Douglas has said. I can ask no more of the legal representatives and I think if it's just a general implication then the time has gone for general implications. You'd need to be quite specific.
PN2854
MR LAWRENCE: Yes. Well, it think what we could do, particularly if we're not sitting on Tuesday, is send a letter on Monday or Tuesday next week identifying them. If it repeats - or to the extent that it repeats what we've already said, well we will get a no, I presume. If, to the extent that it's a letter that contains extra matters then it could get a yes or a no.
PN2855
THE SENIOR DEPUTY PRESIDENT: Well, I'd hope really that it is confined to what is considered to be new material. I don't want to encourage the idea of doing a scatter gun approach with stuff that's been already put and been rejected. Subject to that, go ahead and do what you propose.
PN2856
MR LAWRENCE: Yes.
PN2857
MR DOUGLAS: I think, your Honour, if it does exist it's material that's already subject to the current subpoena.
PN2858
THE SENIOR DEPUTY PRESIDENT: That might well be the case, Mr Douglas. I accept that's a possibility.
PN2859
MR DOUGLAS: But I think what my friend says is put it in writing. We'll make one final request and see what happens.
PN2860
THE SENIOR DEPUTY PRESIDENT: Yes, that's right.
PN2861
MR DOUGLAS: Could I call Mr Pellegrini, your Honour?
PN2862
PN2863
MR DOUGLAS: Mr Pellegrini, for the record your full name and address, please?---Milano Pellegrini of 3 Nicholson Street, Burwood.
PN2864
You were an employee of the CBA. You're not now and I think that comes from a combination of your two statements. You've prepared two witness statements?---That's correct.
PN2865
Does your Honour have a copy of the supplementary statement?
PN2866
THE SENIOR DEPUTY PRESIDENT: Yes, I do, Mr Douglas.
PN2867
MR DOUGLAS: The matters that you touch upon in those two statements, what you say is that true and correct?---Yes.
PN2868
I have no further questions in - I'm sorry. Could I tender the supplementary statement? Maybe it should be marked as part of the other exhibit which I think was COLONIAL2.
PN2869
THE SENIOR DEPUTY PRESIDENT: It was 2 and it was marked for identification at the time. So I will deal with that now. Any objection to the tender of the two statements?
PN2870
MR LAWRENCE: No, your Honour.
PN2871
THE SENIOR DEPUTY PRESIDENT: I will remove the note that exhibit COLONIAL2 is marked for identification and I accept the witness statement of Milano Pellegrini, sworn 4 October 2001 in these proceedings, as exhibit COLONIAL2.
EXHIBIT #COLONIAL2 WITNESS STATEMENT OF MILANO PELLEGRINI SWORN 04/10/2001
**** MILANO PELLEGRINI XN MR DOUGLAS
PN2872
PN2873
MR DOUGLAS: Thank you, your Honour.
PN2874
PN2875
MR LAWRENCE: Thank you, your Honour.
PN2876
Mr Pellegrini, when did you finish with CBA?---It was October last year, the 12th or 19th, from memory.
PN2877
Yes and for how many years had you been employed by the CBA?---January 1984, so 17½ years.
PN2878
As I understand it, you were involved in HR activities with the CBA over recent years?---Yes, round about 1995.
PN2879
Yes and during 1997 and following you were involved with the EDS project, the EDS, the outsourcing to EDS by the CBA?---Yes.
PN2880
You had an HR role in that process?---That's correct.
**** MILANO PELLEGRINI XXN MR LAWRENCE
PN2881
You became involved in the HR aspects of the Colonial EDS arrangement in the year 2000?---Yes.
PN2882
Did you do any work other than the CBA outsourcing, the EDS outsourcing, prior to going on to the Colonial HR work?---Other HR work, you mean.
PN2883
Yes?---Yes, in the confines of my role as an HR executive.
PN2884
Yes and who did you report to in the period '97 to '98, or 2000, in that period?---In 1997 I was reporting to Simon Lane. Following - - -
PN2885
If I could just interrupt there, is that in Group HR?---No. In 1997 it was in TOP HR and I was reporting to Simon Lane.
PN2886
Yes?---Following his departure I reported to Gary Seppings and following his departure, reported to Peter Marshall and I was reporting to Peter when I departed.
PN2887
Yes and do you remember when it was that Mr Seppings left?---I don't recall offhand. I think it may have been the first half of 2000 but I don't recall offhand.
PN2888
Yes. Mr Seppings, his name appears in some of the e-mails that have surfaced in these proceedings, but not in all of them?---Right.
PN2889
Did you become aware in May or June of 2000 that there would be an arrangement between Colonial and EDS for the outsourcing of information technology services?---Yes.
**** MILANO PELLEGRINI XXN MR LAWRENCE
PN2890
Yes and do you know where the decision to undertake that task was made within the organisation?---I don't know whom exactly but I suspect it would be at the very senior levels.
PN2891
Who gave you instructions for the undertaking of the HR aspects of that project?---Yes. I was invited to a meeting that occurred at Martin Place and I don't recall the actual invitation was from Ken Pritchard or Peter Marshall but certainly it was one of their instructions to attend that meeting.
PN2892
THE SENIOR DEPUTY PRESIDENT: Mr Pellegrini, I'm having a bit of difficulty hearing you?---I beg your pardon, sir.
PN2893
MR LAWRENCE: Yes, perhaps if you face over there. Don't worry about upsetting me if you don't look at me when I'm asking the questions?---My apologies. I don't recall the actual instruction to attend that meeting came from Peter Marshall or from Ken Pritchard or indeed if Gary Seppings was there. I just recall being asked to attend that meeting.
PN2894
Yes and this was a TOP meeting?---There were representatives from Top and there were representatives from EDS at that meeting.
PN2895
Group HR represented?---I don't recall so.
PN2896
Were there subsequent meetings of that group of people?---I don't think - I didn't attend any where the entire group was there but there were certainly many meetings post that of various individuals involved with that. I'd meet with people from EDS. I'd meet with Ken and what have you. So I don't recall if there was that working group, if you will, met again after that. They may have and perhaps they even met without me being there. I don't recall.
PN2897
You've been sitting in the Commission. You would have heard some reference to documents, documentation?---Yes, sir.
**** MILANO PELLEGRINI XXN MR LAWRENCE
PN2898
Could I just ask you about the documentation that would have been kept over a period of time?---Mm.
PN2899
You've referred to a number of meetings that were held and it seems as though different people attended different meetings. Were those meetings minuted or were there records held of the meetings that were held?---Certainly most to my knowledge. If I would attend with one of my team, invariably one of my team would take minutes or some diary note of the discussions that occurred.
PN2900
Who would normally do that? When you say one of your team, was there one particular person?---Well, if I can put it this way, sir, it was usually the most junior person, for want of a better term, at the table. So depending on who was with me, it may have been Marcus Hamner. It may have been Adam Creighton, but sometimes it may just be a discussion about where we were at and where we were moving towards and perhaps on occasion it was just that, a discussion where no minutes were taken.
PN2901
Well, if I could just ask you about the meetings that took place between this first one that you referred to and 1 September. That was the date on which EDS took over the work?---Yes, sir.
PN2902
Are you able to say approximately how many meetings would have taken place involving yourself and other representatives either of the Bank or EDS?---I couldn't put a number on it, sir. There wasn't a programmed, you know: we're going to meet every week, per se, or every couple of days. It really just depended on the situation. If there was a need to meet then we met or if it was a case of having discussions by phone, by e-mail, as was required.
PN2903
Yes. Well, in terms of diary notes of meetings or minutes of meetings and those kinds of records, would you have expected dozens of those documents or a handful? Can you estimate?---I really can't even guess, sir, to be honest, but whatever documentation I had I kept in files and on my departure was left in a box, anything that related to the Colonial integration because I'd had some involvement in other areas outside of Colonial IT in terms of the CBA integration. What I had worked with I kept in a box and I understand that that was delivered.
**** MILANO PELLEGRINI XXN MR LAWRENCE
PN2904
All right and just one last thing about that. Within the box did you have discreet files or was it just a bundle of documents?---Well, there were some files there, if I may - just loaded in lots of miscellaneous documentation, if I can put it that way, but there were copies of e-mails, copies of diary notes, copies of letters, drafts, etcetera, really anything, any documentation that I had in the involvement of this matter would have been in that box and I remember it sitting on the table when I departed.
PN2905
Yes, thank you. Now, in the course of Mr Pritchard's evidence a number of documents have been tendered and some of those documents involved you because they were, for example, e-mails passing between you and Mr Pritchard or you and some people with Mr Pritchard copied in. What I would like to do is to take you through those documents generally in chronological order and the first one is exhibit PF12. If the witness could be shown a copy of that?---Thank you.
PN2906
Mr Pellegrini, I will just ask you to look at that quickly to see if you can identify it?---Yes, sir, I can identify it.
PN2907
Yes and what is the document?---The document is some briefing notes that I prepared prior to some presentations that were to occur to Colonial IT employees on the 19th and 20 July as stated there and these were notes that I think I shared with Ken Pritchard and Peter Marshall as the three of us were attending and Peter Fleming perhaps, as we were the ones attending these presentations.
PN2908
If I can take you down to about a third of the way down the first page you will see there a reference to Colonial's EBA and it reads:
PN2909
In terms of Colonial's EBA we have written legal advice in relation to Colonial employees who do not accept comparable offers to CBA will not have any entitlement to retrenchment and can then be terminated.
**** MILANO PELLEGRINI XXN MR LAWRENCE
PN2910
?---Yes, sir, I see that.
PN2911
That was correct, was it?---Yes, sir.
PN2912
That was a correct statement and that reference is to termination without the payment of retrenchment pay. Is that right?---That's correct, sir.
PN2913
Then it goes on:
PN2914
For IT purposes and movement to EDS we have the same initial advice. However, we are yet to have this advice confirmed. Accordingly, no definitive position should be provided.
PN2915
?---Yes, sir.
PN2916
Yes. When you say "initial advice" was that in writing or oral?---I think with matters where I was seeking advice on these and indeed any other aspect I would write to Peter Hill who was legal adviser for us and seek clarification and I don't recall whether we actually met in person or whether it was by phone but I think the initial right was that seems feasible. I can't see the difference and then I don't recall whether it was again by phone or any other means that that was confirmed.
PN2917
So are you saying subsequent to this document, 19th and 20 July that there was some confirmation?---Yes, sir, but if I can just make a point. This, whilst I haven't dated this note, it would have been before the 19th and 20th. It was for the 19th and 20th.
PN2918
Yes, I accept that and at that stage your advice was that no definitive position should be provided?---No, given that I hadn't had it confirmed, I did not want to go out with a position without having it confirmed but I seem to recall it didn't take very long to get that back.
**** MILANO PELLEGRINI XXN MR LAWRENCE
PN2919
You said a short time ago that you would write or send an E-mail to Mr Hill if you wanted advice. Can you recall if there were E-mails on the subject?---Again, I don't recall if it was by phone or by E-mail but it would have been one of those two mechanisms. Invariably they were usually by phone.
PN2920
The confirmation that you referred to, can you say whether it would have been orally or by E-mail?---One or the other, sir, I can't categorise it.
PN2921
If you have a look at the next paragraph, what you were proposing there was, in effect, to avoid answering the question specifically but to come back to the question of employability?---Yes, sir.
PN2922
Now, further down the page, this is the second last paragraph, you have got a possible question that could be asked: If I elect not to take an EDS offer will there be forced secondments. Under that you have got again the famous:
PN2923
Here is ongoing employability in terms of comparable offers with EDS. With that I do not visage there being secondments of any great degree.
PN2924
Do you recall at that stage what the proposal was in relation to secondments to EDS?---None other than that was a possibility in the event that someone should chose not to accept an offer to join EDS.
PN2925
Did you know at that stage about the extent to which there could be secondments to EDS?---No.
PN2926
In the course of the evidence in this case, another document has been tendered, tendered as PF2 - perhaps the witness could be shown that, your Honour. This is a letter from EDS to Group Technology of CBA dated 11 August. I just give you a moment to flick through those pages and I would like to ask you if you have seen that letter before?---I've never seen this letter before.
**** MILANO PELLEGRINI XXN MR LAWRENCE
PN2927
If you turn to the last page, you will see, on that page: Approved and then initials or signature and 11.8.00. Do you see handwritten - - -?---Yes.
PN2928
Do you recognise that signature?---From memory it is Russell Scrimshaw but I am not certain.
PN2929
Now, turn back a page?---One page?
PN2930
Yes, one page. About the fourth last line on that page you will see:
PN2931
In addition the bank will -
PN2932
then on the last line -
PN2933
provide for Colonial Staff who do not accept the job offer to be seconded to EDS.
PN2934
?---Yes, sir, I see that.
PN2935
This, of course, is a letter of 11 August 2000. Were you aware, at about 11 August, that any Colonial employees who didn't accept employment with EDS and who were in scope, would be seconded to EDS?---I was aware that was a possibility.
PN2936
Aware it was a possibility that they would be seconded?---Yes, sir.
PN2937
Were you aware, at that stage, that there would be - or about that stage - there was an obligation to second?---No, sir, given I wasn't involved in any of the negotiations between EDS and Colonial. My role was as a HR implementer, if you will.
**** MILANO PELLEGRINI XXN MR LAWRENCE
PN2938
Now, over the page - - -?---Back one page, sir?
PN2939
Sorry. You can put that exhibit aside, the letter of August and go back to the other one that I was asking about, this is PF12, exhibit PF12. Over the page, you will see, about halfway down on that page: Will there be any circumstances - the question is:
PN2940
Will there be any circumstances in which employment is terminated by Colonial without redundancy being an option.
PN2941
Then your drafted response is:
PN2942
I assume this question relates to the industrial ramifications of a comparable offer not being accepted. With that I will have my HR team investigate and confirm our position as I am not fully across the industrial issues.
PN2943
?---Yes, sir, I see it.
PN2944
Was that the kind of line that was used at the presentation on 19 and 20 July?---No. At that time I think we had received confirmation.
PN2945
That they could be terminated?---That was a possibility, yes. That was one of the three possibilities put to Colonial IT employees.
PN2946
We will just stay with the July meetings at the moment, 19 and 20 July meetings. They were held in Sydney and in Melbourne?---Yes, sir.
PN2947
Did you attend both venues?---There were a couple held. I can't remember if I attended both 19th and 20th. I certainly recall attending the Melbourne one. From memory I attended the Sydney one but there were a number of such presentations after that that I also attended.
**** MILANO PELLEGRINI XXN MR LAWRENCE
PN2948
You said a moment ago there were three possibilities put?---Yes.
PN2949
What were the three possibilities that were put?---One was redeployment within the CBA Group, one was secondment to EDS and one was to be made redundant without the payment of retrenchment moneys.
PN2950
Following a refusal to accept the other?---Beg your pardon, yes.
PN2951
Now, I will move away from exhibit PF12 and ask you to look at exhibit PF13. Those two exhibits you have got there can be returned to the associate. I just want to ask you a couple of questions about this document. Were you involved in the preparation of this document which is a Q and A document?---I would have been involved in parts thereof.
PN2952
When you say "parts thereof" who actually prepared it?---It was put together jointly between the communications team headed up by Louise Denver within the CBA Group and their counterparts in EDS. So where I would receive inquiries, whether it be by E-mail, by telephone, through these presentations, through meetings, whatever the case may be and I thought it relevant that other people may gain some clarity from such questions and answers, I would provide to Louise. Then it was their role to put it on the Intranet in terms of the actual communication mechanisms. In relation to the HR related, IR related aspects, they would invariably come from me or many of them would.
PN2953
So the input came from different places within the organisation and EDS as well?---That's right.
PN2954
And EDS as well?---If it was in relation to an EDS matter, yes.
PN2955
Thank you. Could the witness now be shown PF14?---Should I give this one back?
**** MILANO PELLEGRINI XXN MR LAWRENCE
PN2956
Yes, that can be passed back, Mr Pellegrini. This is a series of E-mails, as you will see, Mr Pellegrini and if I could ask you to start with the one on the second page. At the end of the document you will see it is from Ms Lysen, whom we have heard is Mr Scrimshaw's secretary, or was, and this is an E-mail that has been sent out to various employees. You were copied in on it. That particular communication was subsequently passed through to you via the steps set out in that document, do you see that?---Yes, sir.
PN2957
Now, I just want to draw your attention to the two major paragraphs that appear in Mr Scrimshaw's letter or E-mail of 3 August, page 2. I will come back to this from time to time, later in the cross-examination, these forms of words but you will see the first paragraph, the first of those two major paragraphs reads:
PN2958
It is the Commonwealth Group's clear intention to keep as many employees -
PN2959
etcetera?---Yes.
PN2960
The second one to this end a finishes up with this sentence on the second last line of that paragraph:
PN2961
We would want to explore the individual circumstance of the employee to see where the issue arose and what other alternatives existed in the particular situation to maintain employment.
PN2962
?---Yes, sir.
**** MILANO PELLEGRINI XXN MR LAWRENCE
PN2963
Do you know where that form of words came from? Those two paragraphs?---From recollection Mr Scrimshaw had received a number of E-mails. The name Michael Bialczak, if you will excuse the pronunciation, and several others do ring a bell with me and from memory Mr Scrimshaw - sorry, Ms Lysen forwarded those E-mails to me and I prepared a response which I sought confirmation from my legal advisers, Peter Hill, and prepared that response back to Russell to give to those employees.
PN2964
So this form of words was cleared through Mr Hill?---From my recollection, yes.
PN2965
Presumably you would have sent E-mails backwards and forwards on that subject?---I think I sent an E-mail with a draft that I put together and from memory Peter rang me and we spoke over the phone and there were some minor adjustments, they were minor from recollection, but certainly the intent and what have you of the paragraphs remained as is.
PN2966
You supplied that to Mr Scrimshaw or your secretary so we got that effort there?---Yes.
PN2967
Now, just following it through, if I could go to the bottom of the first page, we have a letter from Andy Black, an E-mail from Andy Black to various people, including yourself - this is Andy Black again who says:
PN2968
My major concern revolves around the fact that if I accept an offer from EDS -
PN2969
etcetera. I will not read the rest but you will see he has raised a particular problem and that is then forwarded on to Ms Lysen and she responds to Mr Black and you are copied in on that, at the top of the page we get your communication of 7 August to Mr Hill and John Matthews. What job did John Matthews have at that time? What was his task in this series of events?---Mr Matthews' role was Deputy General Manager, I think his title was, at Group Human Resources.
**** MILANO PELLEGRINI XXN MR LAWRENCE
PN2970
Mr Hill's position?---I'm not sure of his title but within legal department.
PN2971
In human resources?---I believe he was seconded to human resources.
PN2972
Seconded to human resources?---I believe so.
PN2973
In the second paragraph of that E-mail that you have sent, you say:
PN2974
EDS will firm up T&C -
PN2975
I will just stop there, T&C?---Terms and conditions.
PN2976
Yes:
PN2977
via presentations late in the week.
PN2978
Then it goes on:
PN2979
This issue will no doubt be raised for CBA to answer and we need to be -
PN2980
the next word is "form" but I think it should be "firm"?---Firm, with an "i".
PN2981
Yes:
PN2982
firm with our position. To that end can I confirm our position as not altered nor do we intend to alter for those who do not accept offers from EDS.
**** MILANO PELLEGRINI XXN MR LAWRENCE
PN2983
Now, I will just give you a moment to read through to the end of that paragraph?---To the end of the paragraph?
PN2984
Yes?---Yes.
PN2985
I just wanted to make sure you understood the context in which that last sentence that I read appears. You say in that sentence in the middle of the paragraph that the position has not altered and you don't intend to alter it for those who do not accept offers from EDS, so what was the position that you were referring to there?---The three possibilities.
PN2986
I take it that those people who you directed the E-mail to were aware of those three possibilities?---I would suspect so, yes.
PN2987
The assumption in that passage is they know what they are?---Yes, sir.
PN2988
Would that have been - would those three possibilities have been communicated by way of E-mails or other documentation in the past?---E-mails, discussions, phone calls.
PN2989
Or at meetings?---Perhaps.
PN2990
Your Honour, that might be an appropriate time.
PN2991
THE SENIOR DEPUTY PRESIDENT: Very well. I adjourn these proceedings until 9.30 am tomorrow morning.
ADJOURNED UNTIL FRIDAY, 3 MAY 2002 [4.15pm]
INDEX
LIST OF WITNESSES, EXHIBITS AND MFIs |
KENNETH JOHN PRITCHARD, SWORN PN2092
EXAMINATION-IN-CHIEF BY MR DOUGLAS PN2092
EXHIBIT #COLONIAL 9 AMENDED WITNESS STATEMENT OF KENNETH JOHN PRITCHARD PN2107
EXHIBIT #COLONIAL 10 COPIES OF TWO EMAILS DATED 11/08/2000, 1 AT 1425 AND 1 AT 1650 FROM MR PELLEGRINI PN2157
CROSS-EXAMINATION BY MR LAWRENCE PN2160
EXHIBIT #PF12 DOCUMENT ENTITLED: BRIEFING FOR COLONIAL IT PRESENTATIONS 19 AND 20/7 PN2279
EXHIBIT #PF13 DOCUMENT ENTITLED: INTEGRATION 2000 TOP Q AND A JULY #1 PN2288
EXHIBIT #PF14 SERIES OF E-MAILS STARTING WITH ONE FROM MR PELLEGRINI ON MONDAY, 07/08/2000 AT 1431 PN2328
EXHIBIT #PF15 COPY OF E-MAIL FROM MR PELLEGRINI ON FRIDAY, 11/08/2000 AT 1650 PN2347
EXHIBIT #PF16 DOCUMENT HEADED: INTEGRATION 2001 Q AND A AUGUST #1 PN2374
EXHIBIT #PF17 COPY OF E-MAIL FROM MR PELLEGRINI DATED 14/08/2000 AT 1748 WITH ATTACHMENTS PN2418
EXHIBIT #PF18 CBA/EDS QUESTION AND ANSWER FORUM, WEDNESDAY, 16/08/2000 PN2467
EXHIBIT #PF19 COPY OF E-MAILS DATED 18/08/2000 PN2546
EXHIBIT #PF20 COPY OF E-MAIL FROM MR PELLEGRINI, SATURDAY 19/08/2000 AT 1500 WITH ATTACHMENTS PN2561
EXHIBIT #PF21 COPY OF E-MAIL OF 09/09/2000 FROM MR PELLEGRINI WITH ATTACHMENTS PN2584
EXHIBIT #FP22 COPY OF E-MAIL DATED 21/08/2000 2030 TO MR MILANO PN2630
EXHIBIT #PF23 COPY OF E-MAIL DATED 01/09/2000 FROM HELP DESK, COLONIAL, MELBOURNE PN2645
FURTHER CROSS-EXAMINATION BY MR LAWRENC PN2788
WITNESS WITHDREW PN2807
MILANO PELLEGRINI, SWORN PN2863
EXAMINATION-IN-CHIEF BY MR DOUGLAS PN2863
EXHIBIT #COLONIAL2 WITNESS STATEMENT OF MILANO PELLEGRINI SWORN 04/10/2001 PN2872
EXHIBIT #COLONIAL11 SUPPLEMENTARY WITNESS STATEMENT OF MILANO PELLEGRINI SWORN 23/04/2002 PN2873
CROSS-EXAMINATION BY MR LAWRENCE PN2875
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