C2002/1547, Transcript of Proceedings [2004] AIRCTrans 916 (16 March 2004)

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TRANSCRIPT OF PROCEEDINGS


O/N 10826
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER EAMES

C2002/1547

BANKING SERVICES - ANZ GROUP
AWARD 1998

Application under section 113 of the Act
by Australian and New Zealand Banking
Group Limited to vary the above award

MELBOURNE

10.00 AM, TUESDAY, 24 FEBRUARY 2004

Continued from 23.2.04

PN1865

THE COMMISSIONER: Ms Maloney.

PN1866

MS MALONEY: Thank you, Commissioner. Commissioner, yesterday before we adjourned I had taken you through the provisions of the redundancy and retrenchment provisions in clause 8 of the enterprise agreement, and I was up to, Commissioner, if I can refer to our folder, the folder that we lodged on 23 January.

PN1867

THE COMMISSIONER: Yes.

PN1868

MS MALONEY: And if I can refer to page 11 of the material in that folder, and the first - at the front of the folder.

PN1869

THE COMMISSIONER: Yes.

PN1870

MS MALONEY: Sir, we are dealing with the issue of merit and the first ground which we were putting in - the ground we rely upon in saying the Commission should reject ANZs application. The first ground is that the redeployment and retrenchment provisions under the ANZ/FSU Agreement 1998 have not been followed by ANZ, and if you go to page 14 is where I got to before we adjourned, I think. I was going to the next point in that argument, and that starts at page 14.

PN1871

THE COMMISSIONER: Yes.

PN1872

MS MALONEY: The operation of clause 11.2. Now, clause 11.2 as we know states that:

PN1873

If ANZ obtains other acceptable employment for a staff member under notice of termination it may apply to the Commission to vary the required severance pay.

PN1874

That is what the terms of clause 11.2 - sir, we would submit that clause 11.2 of the award is only triggered in circumstances where the redeployment processes under the agreement have been exhausted, the employee has not been successfully redeployed within ANZ, and the employee is then placed or given notice of termination in accordance with the EBA, and I took you to that clause yesterday, and then there is the selection for the retrenchment. It is our strong contention that it is not activated, that clause 11.2 is not activated when an employee's position is declared redundant, but rather it is activated when an employee has been given notice of termination and is facing retrenchment.

PN1875

Now, to support this proposition as to how clause 11.2 operates, we refer to the fact that firstly as the clause states it refers to:

PN1876

If ANZ obtains other acceptable employment for a staff member under notice of termination...

PN1877

So the notice of termination is provided in clause 8.4 of the agreement, and is given to an employee after all of the provisions dealing with redeployment have been exhausted. That is the first point we say that supports that proposition. But we also refer to the Federal Court's decision, or the Full Court of the Federal Court. And in that decision, sir, if you go to paragraph 22 where at paragraph 22 the Full Court of the Federal Court refers to the decision of the Full Bench firstly in terms of the issue about whether the terms of the award were incorporated into the agreement, and of course that was rejected by the Full Bench.

PN1878

And then goes on to the issue about - and through the last paragraph - the issue about how does clause 11.2 operate in clause 11.5, and we refer to the conclusion that the - of the Full Bench, and it is at the bottom of the page, where the Full Bench concluded:

PN1879

We think that the only way in which clause 11.2 can be given a sensible meaning is by reading the expression "required severance pay" as a reference to clause 8.5 of the 1998 agreement.

PN1880

Clause 3 of the agreement permits such a construction:

PN1881

Viewed objectively it is likely the parties intended clause 11.2 to have substantial operation and it is likely ...(reads)... an application of the kind made by ANZ in this case.

PN1882

So, the link is there, is that the term "required severance pay", and of course that conclusion, sir, if you go over the page, top of page 11, where the Full Bench agreed with the interpretation of the - or the conclusion I should say, of the - sorry, the full court agreed with the conclusion of the Full Bench and states at the top of page 11, and at the last sentence of that paragraph:

PN1883

In our view the terms of clause 8.5 of the agreement is the meaning properly to be given to the term "required severance pay" in clause 11.2 of the award.

PN1884

So, the linkage is between 8.5 of the agreement which deals with severance pay. So, what we say is clause 8.5 does not come into play until such time as the redeployment process has been exhausted, and notice of termination has been given in accordance with clause 8.4. Now, the next point we say on this, and this is very - is that we say in our case that the TCR case does not apply. Now, I wish to explain this, because I recognise the importance of the TCR case as a test case. The alternate employment clause that is provided in the TCR decision we say operates in a different context to clause 11.2 of the ANZ award.

PN1885

Now, set out there at page 14 of our submission we set out what is the alternate employment clause that was determined by the Full Bench in the TCR, and that is, an employer in a particular redundancy case:

PN1886

...may make application to the Commission to have the general severance pay prescription varied if the employer obtains acceptable alternate employment for an employee.

PN1887

Now, sir, that can be found, and we do have a - we have included a copy of the supplementary decision. Sir, you will recall the supplementary decision was issued in December 1984, and that is when they came out with the draft order for the Metal Industries Award, and a copy of that is contained in our folder. I won't take you to it, but a copy of it is contained in our authorities at tab 10. That is the clause that came out of the TCR provision. Now, an employer's ability to access that clause, that is, to come to the Commission to seek relief, depends upon two criteria, the first criteria being that a redundancy has occurred.

PN1888

And second, the employee's employment is to be terminated by reason of the redundancy, that is, the employee is facing unemployment. Now, can I take the Commission to the decision in United Rubber. Now, sir, it is at tab 11 of our authorities. Now, it is the Full Bench decision in print H9091. Sir, you have got that?

PN1889

THE COMMISSIONER: I have.

PN1890

MS MALONEY: All right. And I take the Commission to page - I am sorry, sir, I don't think we have got paragraphs in this - page 16 of that decision. Now, this is concerning an application for relief in terms of severance obligations in respect of the Rubber, Plastic and Cable Making Industry Consolidated Award 1983. Now, just to assist you, sir, is that we - if we have included in tab 3 of our white book a copy of the clause, that was before the Full Bench, so - and you will see it was the clause, it was the standard TCR clause as determined by the Full Bench in the 1984 TCR decision, but a copy of the clause can be found at attachment 3 of our folder. It is based on the TCR provision.

PN1891

Now, the Full Bench in this case was dealing with an application to vary the severance pay prescription provided for in clause 47 of the Rubber, Plastic and Cable Making Industry Consolidated Award. After referring to various parts of the TCR decision dealing with the purpose of why redundancy payments are made, and of course that was quite a bit of a - part of the case, the Full Bench states, and I take you at page 16, sir, and it goes - there is no paragraphs, but it is - the third paragraph from the bottom. It starts with: The policy underlying.

PN1892

Well, if you go to where it says - after the first paragraph at the top they refer to the - it refers to the general severance pay prescription of the Commission in the TCR case, then they go down: The Commission has also earlier stated - this is page 30. Then it goes down to the paragraph:

PN1893

The policy underlying the scheme -

PN1894

THE COMMISSIONER: This page 16?

PN1895

MS MALONEY: Yes.

PN1896

THE COMMISSIONER: Of the decision?

PN1897

MS MALONEY: Okay. It might have come out on a different page, sir. Can you just give me a second, sir?

PN1898

THE COMMISSIONER: Yes, certainly.

PN1899

MS MALONEY: Okay, sorry, sir, go to page 17. It is obvious that when you print out decisions sometimes they come out different. Sorry, sir, about that. Page 17 of the decision.

PN1900

THE COMMISSIONER: Yes.

PN1901

MS MALONEY: So what the Full Bench was doing was firstly considering the various provisions of the TCR case in respect of the general severance pay prescription, and then - and we see at the bottom, towards the bottom of page 17, they refer to the TCR decision.

PN1902

THE COMMISSIONER: Yes.

PN1903

MS MALONEY: They we come down to - and at the last paragraph it starts: The policy.

PN1904

THE COMMISSIONER: Yes, got that.

PN1905

MS MALONEY: Right. Sorry, I apologise to the Commission.

PN1906

THE COMMISSIONER: You are right.

PN1907

MS MALONEY: And the Full Bench states there:

PN1908

The policy underlying the scheme is reflected in the criterion adopted in clause 47A and C of the award for identifying redundancy situation ...(reads)... with the obtaining of acceptable alternate employment.

PN1909

Now, sir, just to clarify, make that clear, if you could just go to tab 3 in our white folder, and tab 3 is a copy of clause 47, redundancy, of the Rubber, Plastic, and Cable Making Industry.

PN1910

THE COMMISSIONER: Yes.

PN1911

MS MALONEY: Redundancy clause; A(1) deals with the issue of discussions before termination and then there is a transfer to lower paid duties, which is probably the only - probably the closest provision that come to - as sort of redeployment, but the transfer to lower paid duties. Then we go over to 47C. Now, this is the - 47C is severance pay. Now 47C, in addition to the period of notice prescribed for ordinary termination in subclause 7(d), which is - and subject to further order of the Commission:

PN1912

...an employee whose employment is terminated for reasons set out in paragraph A(1) hereof shall be entitled to the following amount of severance pay in respect of a continuous period of service.

PN1913

So, we have a person who has been made redundant, who has been given notice of termination, is about to be terminated, and they have got an entitlement to severance pay as set out in clause 6C. The linkage that is for - under TCR for an employee to - I am sorry, employer - to come and seek under paragraph (e), and if you will see in paragraph (e) the alternate employment provision:

PN1914

The ability for an employer to come and make application pursuant to the provision to be relieved of their obligation, that linkage is linked back to the fact that the employee is under notice of termination they are about to face redundancy.

PN1915

They have got to meet that test. That is linkage. And that is what we say the Full Bench makes quite clear in its decision. Now, obviously, the TCR decision has - well, sorry, not the TCR decision; I retract that - the TCR provisions in awards obviously has been subject to the award simplification process, and at paragraph 53 of our submission, if we go back to paragraph 53, we refer to the - I suppose the observation by SDP Lacy in the Miscellaneous Workers Union v Chubb Security that the standard redundancy clause as set by the TCR decision has since been refined to comply with section 89A of the Act, and basically the refinement, sir, in terms of the 89A test was to remove the consultation with unions and the introduction of technological change.

PN1916

They were the main things that fell out of the allowability test. And we have included for completeness a copy of the clause that was inserted into the Hospitality Industry Award following the award simplification of December 1997, and we say the redundancy clause is not too different, except it doesn't have introduction of change and consultation with unions. Now, sir, what we say is this, and we make it - that the alternate employment provision contained in the TCR test case and the award simplification decision can only be activated by an employer where redundancy occurs and the employee's employment is being terminated by reason of the redundancy.

PN1917

The clause does not operate within a redundancy regime that provides for redeployment, and we say that because the TCR test case of August 1984 and its supplementary decision does not deal with redeployment. And, sir, we refer you to paragraph 54 of our submission where we set out in that paragraph the Full Bench decision in the test case wherein they refer to a submission by the ACTU on the issue of assistance in seeking alternate employment. And there is a - they refer to the ACTUs submission, they refer to the NLAC guidelines which from my memory are the National Labour Advisory Council Committee Guidelines, and I take you down to refer to those guidelines, and I take you down to the last paragraph where the Full Bench states:

PN1918

We endorse those remarks by the NLAC, and it is our view that these matters are indicative of the matters which should be discussed between the ...(reads)... award prescriptions to cover these matters.

PN1919

Now, that is our own emphasis. So, here we are dealing with, and the ACTU raises of issues of redeployment provisions about that, they have put a view that they refer to the fact there are some private sector redundancy awards and agreement provisions, it is in the first paragraph, so they recognise, and of course at that time there were a number of industries, well, in the private sector, had redeployment provisions in agreements, whether they were registered or not, and the Full Bench says, yes, we think employers do do that, a lot of employers do mitigate it, but we do not - the important point they make at the bottom, and it is our emphasis:

PN1920

...we do not think it necessary or desirable to make award prescriptions to cover these matters.

PN1921

So, the TCR decision and the clause - the TCR provision that came out of the decision, and as simplified under allowability, does not deal with redeployment. Now, that regime, the TCR regime, is distinguishable from the redeployment and retrenchment provisions that apply under the ANZ/FSU Agreement and which provide the context in which clause 11.2 operates. Clause 11.2 operates in the context of the ANZ/FSU Agreement. Now, we say, and we say it quite categorically, that ANZ have failed to apply the provisions of the ANZ/FSU Agreement.

PN1922

And we say this as it did not offer the employees concerned, that is the former employees in this case, redeployment within ANZ once their positions in funds management had been declared redundant. At no stage during this process did ANZ issue the affected employees a notice advising that their positions in funds management, and that is a typo, not wealth, funds management, was redundant, and that they were being placed on redeployment within ANZ. At no stage during this process did ANZ seek to place employees in directly comparable positions or seek to place them in alternate permanent positions within ANZ.

PN1923

Now, in their letter of offer on 12 November - sorry, 12 April, I apologise - of which a copy is attached - sorry, I retract that. In the letter that ANZ sent to employees on 12 April, a copy of which is attached to Mr Kelly's statement filed in December last year, because there were two letters, the letter from INGA and the letter from ANZ, and they are both dated 12 April from memory, they state:

PN1924

Accepting the offer of employment will be -

PN1925

of the employment with INGA -

PN1926

will be understood as a resignation from your employment with ANZ. It is important for you to understand that this is a transmission of ...(reads)... would not be entitled to redundancy payments.

PN1927

Now, the first point we say about that paragraph, in that paragraph ANZ purports to say that the termination of employment was not at the instigation of the bank, but rather at the initiative of the employee, and we say that is completely unsustainable. The whole joint venture proposal that has led to this application is plainly at the instigation of the bank and its other partner in the joint venture, and not at the instigation of the ANZ employees. The deed resignation of the employees concerned by accepting a job offer cannot be said in any sense to constitute a termination other than at the instigation of the bank. So, that is the first point we say.

PN1928

The second point we say is this: the position put by ANZ in that letter and as we will further expand in their guiding principle document in respect of redeployment does not comply with their obligations under the ANZ/FSU agreement. Once ANZ no longer required the jobs in funds management to be done by anyone, those positions became redundant, and the employees affected should have been put on redeployment. As stated, as we showed in our outline of how the redundancy process operates under the agreement, the first option to be pursued under redeployment is seeking to place the employee in a directly comparable position.

PN1929

That requirement, and we make - this point is very important - that requirement to place someone in a directly comparable position is not met by an offer of employment from another employer, nor is it met by ANZ threatening to deny employees their redeployment and retrenchment entitlements if they do not accept such an offer. So, the proposition in both the letter and the guiding principles, and the guiding principles, proposition or statement was that:

PN1930

8. Staff reject offer of employment with the JV on terms no less favourable in aggregate and in the same location will not have access ...(reads)... however, have access to ANZs redeployment arrangement.

PN1931

That proposition in the guiding principles and the proposition in their letter to staff does not meet their requirements under the enterprise agreement. Sir, the failure of ANZ to comply with the redeployment and retrenchment provisions of the agreement has disadvantaged in our - and evidence, the former employees of ANZ as they have been denied the opportunity to be redeployed within the bank. FSU members, and we will be taking you now to the evidence of the 21 former ANZ employees, would have preferred to have been redeployed within ANZ rather than being transferred to INGA.

PN1932

Now, we will take you now, sir, to tab 5 of our book, and tab 5 contains the witness evidence statements by the employees, and I - sir, these, each of these statements which I will go through clearly and categorically state that each of these employees, the former ANZ employees, I should say, were not given any option of redeployment within ANZ, and each of them clearly and categorically state they would have preferred to have remained employed within ANZ. The first one I take you to is Jessie Byrnes. The first statement is by Jessie Byrnes. Ms Byrnes was employed by ANZ from 18 February 1991 until transferred to the employ of INGA on 1 May 2002, so Ms Byrnes has had a service of over 11 years of employment with ANZ.

PN1933

Immediately prior going to INGA Ms Byrnes held the position of transaction officer and held that position since first employed by ANZ in 1991. Now, I refer to paragraph - firstly refer to paragraph 4 of her statement where Ms Byrnes states:

PN1934

I was not given any option of redeployment within ANZ. I would have preferred to remain employed by ANZ in a comparable role than to be transferred to INGA.

PN1935

I also refer to paragraph 5 where Ms Byrnes states:

PN1936

I raised my concerns about not being offered redeployment within ANZ with my team leader, Caron Pearce and my manager, Mike Harrington....(reads)... be considered to have resigned anyway.

PN1937

I take you to the next statement of Mark Juan, that is J-u-a-n. Mr Juan had been employed by ANZ from December 2000 until he was transferred to ING on 1 May 2002, so he has had about one year and four months' service. Immediately prior to 1 May 2002 he held the position of risk and compliance manager. At paragraph 4 he indicates he was not given the option of redeployment within ANZ, and that he preferred to remain in ANZ. At paragraph 5 he indicates these concerns were raised with the general manager and the general manager of human resources.

PN1938

He refers to team meetings were held with these general managers where they were asked about employees not being offered redeployment within the ANZ with the bank. He goes on to state:

PN1939

We were advised that should we decide not to accept the ING offer we would have no redundancy entitlements.

PN1940

[10.29am]

PN1941

I take you to the next statement of Janis Smith. Ms Smith was employed by ANZ from May 1994 until 1 May 2002, so she has had approximately 8 years service with ANZ. Prior to 1 May 2002 she held the position at ANZ of Team Member, Annuities. She has held that since 1998. I refer firstly to paragraph 4 of her statement, where she indicates, or states:

PN1942

I was not given any option of redeployment within ANZ. I would have preferred to remain employed by ANZ in comparable role rather than to be transferred to INGA.

PN1943

I go to paragraph 5, over the page, where Ms Smith states:

PN1944

I raised my concerns about not being offered redeployment within ANZ and with the bank. I raised my concern many times with my team leader, Caron Pearce ...(reads)...letter of offer by INGA.

PN1945

Then I refer to paragraph 6:

PN1946

At the general staff meeting with Bruce Bonyhady we were told that if we opted for redeployment there would be no guarantee of jobs and we would lose access to redeployment.

PN1947

Now, sir, Mr Bonyhady you will probably remember, but he was the - - -

PN1948

THE COMMISSIONER: Access to redundancy.

PN1949

MS MALONEY: Sorry, access to redundancy payments. I apologise. I will restate that:

PN1950

At the general staff meeting with Bruce Bonyhady ...(reads)...would lose access to redundancy payments.

PN1951

And Mr Bonyhady - sorry, is - or was, I don't know if he still is, but at that time, the Managing Director of ANZ Investments. And if you recall he was the author of the letter that went to the staff on 17 January, which is attached to Mr Kelly's statement in ANZ6, I think. I take you to Dola Matar, the next witness. As you can see, Ms Matar was employed with ANZ from 11 May 1992 until 1 May 2002: that is nearly 10 years service with ANZ. Prior to May 2002 held the position of Underwriter's Assistant and New Business Clerk. I refer to paragraph 4 of her statement, where she states:

PN1952

I was not given any option of redeployment within ANZ. I would have preferred to remain employed by ANZ in a comparable role than to be transferred to INGA.

PN1953

I also refer to paragraph 5:

PN1954

I raised my concerns about not being offered redeployment within ANZ with my manager. He confirmed that I had no real choice and must sign the letter of offer from INGA ...(reads)... but I did not receive a reply.

PN1955

I refer to the statement, the next one, Gregory Sclanders. He was employed with ANZ from 22 November 1998 to 1 May 2002. He has 3 years and 5 months service. Prior to going across he had the position of Analyst Programmer. I refer to paragraph 4, in which he states:

PN1956

I was not given any option of redeployment within ANZ. I would have preferred to remain employed by ANZ in a comparable role than to be transferred to INGA.

PN1957

I refer to the statement of Trevor Rees, which is the next statement n the book. Trevor Rees, and I think you have been taken to his statement previously, employed since 15 December 1967. He has had 34 years and 4 months service. Prior to going to INGA he held the position of Manager Compliance and Technical Services Superannuation and Insurance. At paragraph 4 he states:

PN1958

I was not given any option of redeployment within ANZ. I would have preferred to remain employed in that by ANZ in a comparable role rather than to be transferred to INGA.

PN1959

I take you to paragraph 5 of the statement:

PN1960

I raised my concerns about ANZ staff not being offered a choice in their future employment, ie, participate in joint venture with INGA or a redeployment within ANZ with the bank ...(reads)... in a private meeting with Bruce Bonyhady.

PN1961

I also refer to paragraph 8 - sorry, firstly, as has been pointed out to you, Mr Rees was made redundant, and paragraph 7 says:

PN1962

I was made redundant from INGA in February 2003.

PN1963

I refer you to paragraph 8. Now, we note this is an employee who - sorry, former employee, I should say, who had 34 years - over 34 years service with ANZ, and obviously prior to going across to INGA had a senior position, Manager Compliance and Technical Services. In paragraph 8 he states:

PN1964

I am now no longer an employee but operate my own company. After leaving INGA I sought employment opportunities elsewhere, but with concern as to how long any new role would last before the next redundancy I now operate my own business in a field totally unrelated to banking or compliance. Income opportunities in the future are unlikely to ever be equal to those I enjoyed with ANZ.

PN1965

So here we have someone, yes, he went across to INGA, he was made redundant by INGA, he is now out in a completely different - and I emphasise, completely different business; nothing to do with the finance industry. I take you to the statement of Mr Cao. Mr Cao was employed in ANZ from September 1995 until 1 May 2002. He has had over 6 years service with ANZ. Prior to going over to INGA, he held the position of Team Member Administrator. I take you to paragraph 4 of his statement:

PN1966

I was not given any option of redeployment within ANZ. I would have preferred to remain employed by ANZ in a comparable role than be transferred to INGA.

PN1967

I refer you to paragraph 5 of Ms Cao's statement where he states:

PN1968

I raised my concerns about not being offered redeployment within ANZ with the bank. I spoke to my supervisor who advised me that I had no choice ...(reads)... in ANZs redeployment arrangements.

PN1969

The next one, the statement I will take you to is Karen Bloor, which is the next one in the book.

PN1970

THE COMMISSIONER: Just as a matter of interest, in relation to that last statement, I look at the name printed at the outset, Ty Cao, the signature appeared different. There might not be anything flows from it.

PN1971

MS MALONEY: I can clarify that, sir, if I could. I can come back to you on that one.

PN1972

THE COMMISSIONER: It might be just my ignorance of the way Vietnamese people do things, assuming the gentleman is Vietnamese.

PN1973

MS MALONEY: Sir, can we can back to you. We will clarify that.

PN1974

THE COMMISSIONER: I don't think the whole case swings on it, but it is just something I noted.

PN1975

MS MALONEY: Yes, no, sir, that is all right. I will clarify that. The next one is Karen Bloor. She was employed with ANZ since July 1989 until 1 May 2002, over 12 years service with ANZ. Prior to going to INGA held the position of Assistant Product Manager. In paragraph 4 of her statement, it states:

PN1976

I was not given any option of redeployment within ANZ. I would have preferred to remain employed by ANZ in a comparable role than to be transferred to INGA.

PN1977

I take you to paragraph 5:

PN1978

We raised our concerns about not being offered redeployment within ANZ with the Bank in our team discussions. We were told flatly that this was not an option.

PN1979

The next statement I take you to is Paul Arora. Now Paul Arora was employed by ANZ since December 1989. He has had over 12 years service with ANZ prior to going across to INGA. As stated in paragraph 2 of his statement, he held the position of Staff consultant, before going to INGA. Paragraph 4, he states:

PN1980

I was not given any option of redeployment within ANZ. I would have preferred to remain employed by ANZ in a comparable role than be transferred to INGA.

PN1981

I refer to paragraph 5:

PN1982

I raised my concerns about not being offered redeployment within ANZ with the Bank. In particular the issue was raised at the question and answer sessions ...(reads)... any entitlements to redundancy.

PN1983

The next statement I go to is Graham Schofield. Mr Schofield was employed by ANZ from November 1994. He had over seven years service before being transferred to INGA on 1 May 2002. Prior to that date he held the position of Senior Technical Support Specialist. And at paragraph 4 he states:

PN1984

I was not given any options of redeployment within ANZ. I ask HR and ING about retrenchment if I did not apply for a position being advertised. They stated that if I did not apply for a position, they would appoint me to a position that they felt was appropriate.

PN1985

The next statement I take you to, Stephen Yiu. He was employed from - ANZ in July 1989, once again, over 11 years service with ANZ prior to going to INGA on 1 May 2002. He had the position of Oracle DBA, and I refer you to paragraph 4 where he states:

PN1986

I was not given any option of redeployment within ANZ. My team in ANZ was a team of two people, DBAs.

PN1987

Sir, we are not quite sure what DBAs are, but I am sure ANZ will clarify. Data Base Administrators.

PN1988

ING were only employing one Data Base Administrator. I asked HR at ING about retrenchment, if I didn't apply for the position, and was informed that if I did not apply for a position they would appoint me to an appropriate position.

PN1989

The next statement I refer to is Sylvia Tresidder. Now, Ms Tresidder was employed on a permanent part-time basis by ANZ from July 1989 until transferred to INGA on 1 May 2002. She has had over 11 years experience on a permanent part-time basis. Held the position of Senior Analyst Programmer prior to 1 May 2002 with ANZ. It states at paragraph 4:

PN1990

I was not given any option of redeployment within ANZ. I would have preferred to remain employed by ANZ in a comparable role, than be transferred to INGA.

PN1991

The next statement I go to is Lydia Lim. Lydia Lim was employed by ANZ from 1990 until 1 May, transferring to INGA on 1 May 2002. That is over 11 years employment with ANZ. Prior to going across to INGA, Ms Lim held the position of Authorisation and Accreditation Manager. In paragraph 4 of her statement she states:

PN1992

I was not given any option of redeployment within ANZ. I would have preferred to remain employed by ANZ in a comparable role than be transferred to INGA.

PN1993

At paragraph 5 of her statement, Ms Lim states:

PN1994

I raised my concerns about not being offered redeployment within ANZ with the Bank. In particular I spoke to my manager and senior manager. I questioned...(reads)... which was to be considered a resignation from ANZ.

PN1995

Now, I also refer you to paragraph 6, where she states:

PN1996

As a result, I only had two weeks to make a decision and/or find other employment which was not adequate. Given that we were considered to have resigned, no matter ...(reads)... or properly consider the consequences.

PN1997

The next statement I take you to is the statement of Vicki Thompson. Vicki Thompson was employed by ANZ from 4 December 2000 until transferred across, to 1 May 2002. Prior to going across to INGA Ms Thompson held the position of Compliance Manager. At paragraph 4 she states:

PN1998

I was not given any option of redeployment within ANZ. I would have preferred to remain employed by ANZ in a comparable role, than to be transferred to INGA.

PN1999

I take you to paragraph 5:

PN2000

I raised my concerns about not being offered redeployment within ANZ with the Bank. In particular, I spoke to Errol Kelly at a general meeting of staff.

PN2001

I should also note that Ms Thompson has since resigned from INGA, and that is in paragraph 7. Now, I just take you to paragraph 7 for the moment. At paragraph 7 Ms Thompson states:

PN2002

I have since resigned from INGA. The reasons I chose to leave ING, are that I was totally dissatisfied with INGA. There was no role for me at INGA at the ...(reads)... that I would become de-skilled by sitting around with nothing to do.

PN2003

The next statement I go to is the statement of Jodie Gafa. Jodie Gafa was employed by ANZ from November 1986 until the transfer to INGA to 1 May 2002. Prior to that transfer Ms Gafa held the position of Call Centre Supervisor. So she has over 15 years service with ANZ prior to the transfer. At paragraph 4 she states:

PN2004

I was not give any option of redeployment within ANZ. I would have preferred to remain employed by ANZ in a comparable role than to be transferred to INGA.

PN2005

And I refer you, Commissioner, to paragraph 5 of Ms Gafa's statement, in which she states:

PN2006

I attended question and answer sessions where concerns were raised about not being offered redeployment within ANZ with the Bank. We were advised that we had no choice and must agree to the INGA job, or we would be terminated with no redundancy pay.

PN2007

Now, can I just also go to paragraph 6 of her statement in which she states:

PN2008

The reasons why I believed the position with INGA was not acceptable alternate employment...

PN2009

And I will be coming back to this argument a bit later, but I just want to point - this point. One of the reasons that she has highlighted, and I see if you are referring to the dot point, second dot point on paragraph 6, is that for 15 years, Ms Gafa has travelled for three hours each day to work from Penrith:

PN2010

Now that my kids are at school, and are involved in after school activities, I am interested in working closer to home. At ANZ I stood a good chance of finding ...(reads)... INGA can offer me nothing except perhaps Attunga.

PN2011

So the point I am making there - I am not putting that on the acceptable alternate employment, I am putting it on the basis that this is a former ANZ employee who was disadvantaged by the fact that she wasn't given the opportunity to seek redeployment within ANZ. And that is the point I am saying. She was disadvantaged by being denied that opportunity. The next statement I go to, the statement of Thomas Dy. Thomas Dy was employed by ANZ from 5 April 1994 until going across to INGA on 1 May 2002. That is he had more than eight years experience. Immediately prior to going to INGA, Mr Dy held the position of Project Leader MIS Delivery. At paragraph 4 of his statement he indicates:

PN2012

I was not given any option of redeployment within ANZ. I would have preferred to have remained employed by ANZ in a comparable role than be transferred to INGA.

PN2013

Paragraph 5, he states:

PN2014

Concerns about not being offered redeployment within ANZ were raised with the Bank at the information sessions they held. We were advised that we had no choice but to accept the INGA offer.

PN2015

And the next statement I refer to is the statement of Margaret Arbuckle.

PN2016

THE COMMISSIONER: I don't have that one. We have been going well up till then.

PN2017

MS MALONEY: Sir, we - well, there was a copy in your set but can I just make sure because I don't want - there were four statements that we lodged on 28 February.

PN2018

THE COMMISSIONER: Yes.

PN2019

MS MALONEY: Margaret Arbuckle, Yu Wang - - -

PN2020

THE COMMISSIONER: Yes, you are right, yes.

PN2021

MS MALONEY: Yes. Lucena Linden and Kirsten Morris.

PN2022

THE COMMISSIONER: Thank you.

PN2023

MS MALONEY: Ms Arbuckle was employed by ANZ from 4 September 1992 until transferred to the employ of INGA on 1 May 2002. That is, she had over nine years experience in ANZ. Prior to 1 May 2002 she held the position of Service Consultant Administrator in ANZ. I refer you to paragraph 4 of her statement:

PN2024

ANZ made it very clear that if I participated in their redeployment arrangements and be unsuccessful, or subsequently find alternate role unsuitable, I would not be entitled to redundancy payment.

PN2025

And she refers to the ANZ Investments letter. That is the letter from ANZ dated 12 April:

PN2026

I therefore do not consider this as an option or offer at all. I would have preferred to remain employed by ANZ in a comparable role than to be transferred to INGA.

PN2027

I also refer to paragraph 5 of her statement. She states:

PN2028

I raised my concerns about not being offered redeployment within ANZ with the Bank. In particular I raised questions at the question and answer sessions at the ...(reads)... with no right to redundancy pay.

PN2029

The next statement, sir, is Yu Wang.

PN2030

THE COMMISSIONER: Yes.

PN2031

MS MALONEY: Yu Wang was employed by ANZ from 14 July 1997 until the transfer to the employ of INGA on 1 May 2002. That is over four years service. And at paragraph 4 of the statement, Yu Wang states:

PN2032

I was not given any option of redeployment within ANZ. I would have preferred to remain employed by ANZ in a comparable role, than be transferred to INGA.

PN2033

The next statement is Lucena Linden.

PN2034

THE COMMISSIONER: Yes.

PN2035

MS MALONEY: Ms Linden was employed by ANZ from December 1985 until transferred to the employ of INGA on 1 May 2002. Immediately prior to 1 May 2002 Ms Linden held the position of Senior Team Member in ANZ. At paragraph 4 of her statement she states:

PN2036

Redeployment within ANZ was not really an option for the reasons outlined in paragraph 5 of this statement. I would have preferred to remain employed in ANZ in a comparable role, than to be transferred to INGA.

PN2037

Now, I refer you to paragraph 5 of her statement:

PN2038

We raised our concerns about the options being offered to us in the general meetings of ANZ before the transfer. Due to our concern about ...(reads)... employment and financial security.

PN2039

Next statement is Kirsten Morris.

PN2040

THE COMMISSIONER: Yes.

PN2041

MS MALONEY: Ms Morris was employed by ANZ on 28 February 1994 until transferred to the employ of INGA on 1 May 2002. that is she has had over eight years service. Immediately prior to 1 May 2002, Ms Morris held the position of Risk and Compliance Assistant in ANZ, and at paragraph 4 of her statement she states:

PN2042

I was not given any option of redeployment within ANZ.

PN2043

I also take the Commission to paragraph 6 of Ms Morris's statement. Mr Morris has since resigned from INGA, and I refer you to paragraph 6. She states:

PN2044

I have since resigned from INGA. Whilst part of the reason for my resignation was that my husband was offered a transfer in his work to ...(reads)... a common concern among the ex-ANZ employees.

PN2045

So we want to make the point that this is another former ANZ employees who has left INGA. The next statement is Michael Nurse. Now, sir, we filed Mr Nurse's statement, it was a little bit late, we apologise. But it was sent to the Commission - it was faxed to the Commission on 4 February.

PN2046

THE COMMISSIONER: Yes, I have it.

PN2047

MS MALONEY: Yes, and it is Michael Nurse.

[10.56am]

PN2048

Now, Michael Nurse was employed by ANZ on 19 August 1993 until the transfer to INGA on 1 May 2002. That is over eight years service. Prior to going to INGA he held a senior position with ANZ, Manager of Superannuation and Retirement Income. And that is set out at paragraph 2 of his statement. At paragraph 4 of his statement, Mr Nurse states:

PN2049

I was not given any option of any redeployment within ANZ. I would have preferred to remain employed by ANZ in a comparable role than to be transferred to INGA.

PN2050

Now, I then take you to paragraph 5 of Mr Nurse's statement, because we say this is very important. Mr Nurse, at paragraph 5 of his statement states:

PN2051

I raised my concerns about not being offered redeployment within ANZ with my senior manager and general manager. I did this both verbally and ...(reads)... may have been available, this could destroy any chance we had of being appointed to them.

PN2052

And I take you to the next paragraph, because it goes to the issue of choice, which has been raised in a number of the witness statements:

PN2053

The risk of rejecting the offer was the loss of employment, the loss of accrued service and associated entitlements ( including long service leave), and the loss of ...(reads)... but to accept compulsory transfer.

PN2054

So that goes to the issue of no choice, which we say a number of the witness statements indicate that there was no choice in terms of whether to accept the offer. So, sir, what we say is that in respect to this point about the failure of ANZ to comply with the redeployment and retrenchment provisions, firstly we say that a number of the employees have been disadvantaged by not being given that opportunity. And we have an example there of the part-time employee who wished to work closer to home.

PN2055

And we also say that the evidence clearly shows that those 21 former employees had a clear preference to be redeployed within ANZ rather than being transferred to INGA. But it also shows that they raised those concerns. They had consistently raised those concerns back in April and March, when those sessions were held, they consistently raised those concerns.

PN2056

THE COMMISSIONER: I think there might be some merit in me marking the statements as a single exhibit in the proceedings.

PN2057

MS MALONEY: Thank you, sir.

EXHIBIT #FSU7 21 EMPLOYEE STATEMENTS

PN2058

MS MALONEY: So what we say is that - we say the evidence clearly shows, and the submissions we put, that ANZ has not met the conditions for the operation of clause 11.2 of the award, and as such their application is premature. The application is premature because they haven't met the criteria in which clause 11.2 is triggered. These people were not placed on - these people were not given notices that their positions had been made redundant. They were not placed on redeployment. They were not at the point, under the agreement, that they were to be given severance pay. So they failed to carry out their obligations under the agreement in that respect.

PN2059

THE COMMISSIONER: If I come to the view that all of that is right, will you address me on how I unscramble that egg?

PN2060

MS MALONEY: Sir, yes.

PN2061

THE COMMISSIONER: If we come to that?

PN2062

MS MALONEY: Yes, yes, I will. Sir, I realise this is very complex, and I am trying to do it - - -

PN2063

THE COMMISSIONER: No, no, I am with you.

PN2064

MS MALONEY: But before I do that, I want to address ANZs contentions that they have complied. And their contentions that - their contention that clause 7.2, clause 11.2 of the award, and clause 8 of the agreement, all read - the scheme is continuing employment, and they have done that. But I wish to just address firstly the contentions they filed in December - sorry - I retract that. ANZ in their contentions, filed in February this year, their reply contentions, I should say.

PN2065

Their first point in those contentions filed in February this year under Merit, which we want to - and it also goes to the issue that they have put - they put yesterday. Sir, I don't know if you have got their contentions, tab 19 of their book. At the second page of their contentions under Merit, paragraph 6 to 10, 11, the proposition they put in their contentions.

PN2066

MR McDONALD: Are you on tab 20?

PN2067

MS MALONEY: Sorry, the contentions in reply. Tab 20, sorry, sir.

PN2068

THE COMMISSIONER: Yes.

PN2069

MS MALONEY: I refer you to paragraph 6 of their contentions. It is paragraph 6, 7, 8 and 9, in which they claim that the - and 10 - which they claim their approach is consistent with the relevant award and agreement provisions read together. The first point we say is that at paragraph 6 they state:

PN2070

That clause 8 of the ANZ agreement, as both the full court of the Federal Court and the Full Bench have determined, is to be read in conjunction with clause 11.2 of the ANZ Award ...(reads)... business to be recognised pre-transmission of service.

PN2071

Now what we say in this is this. That contention that the Full Court of the Federal Court and the Full Bench determine that clause 8 of the agreement is to be read in conjunction with clause 11.2 of the award, would appear to suggest, and also they are - appear to suggest that clause 11.2 of the award, and clause 7.2 of the award, which is Transmission of Business, usurps all the other provisions of clause 8. Now, if I could put it, the proposition that they have put is that the scheme is this, that they have put to you.

PN2072

Clause 7.2 of the award, the Transmission of Business clause. Clause 11.2 - and then you have got 11.2, which is what - and we have got clause 8 or 8.5 - we are not quite - well, clause 8, or 8.5. They say, that is the scheme, the overriding objective for that scheme, is to maintain people's continuity of employment. And they say, because the Full Bench, and as endorsed by the Full Court of the Federal Court, found that the agreement was read in conjunction with the award, that supports that proposition.

PN2073

We say this. The Full Bench and the Full Court of the Federal Court found that the term required severance payment as it appears in clause 11.2, is a term to be connected to clause 8.5. The Full Court of the Federal Court did not determine that all the provisions governing the redeployment processes under the agreement are out the window. They didn't determine that ANZ could come along here and skip step 1, 2 - step 1 and step 2 on the agreement, and jump to step 3, and come to this Commission to seek relief in terms of severance payment.

PN2074

They didn't. The connection is between the term, severance payment, required severance payment. And that connection is clearly linked with clause 8.5 and there is a very good reason why it is clearly linked with 8.5. Clause 11.2 of the award operates within the regime of the enterprise agreement. That regime has a redundancy process. It is not just, you are redundant and you are out the door. Your position becomes redundant. There is an obligation there on the employer to exhaust all avenues to seek your redeployment, the employee's redeployment. An obligation we support.

PN2075

We think it is really important to support the continuing employment of those employees with their employer, which is ANZ. All those provisions - that is the regime. And then if those avenues which we went through in that flow chart, if you are unsuccessful in getting a directly comparable position, then you go - you can have alternative. You can go to another position and trial that for two months, see how you go. If you like it, you stay there. If you don't, your entitlements are preserved. But even there, you could even be placed in a higher graded position, and there is a process there.

PN2076

There is a direct commitment in the agreement for ANZ to exhaust all those avenues before a person is anywhere given a notice of termination. So the Full Court of the Federal Court didn't say that. They didn't say, well, ANZ you can ignore your obligations to redeploy people in accordance with the enterprise agreement, and come along to this Commission and access clause 11.2 to seek redundancy relief.

PN2077

Now, we took you, I don't think just for the purpose - I am trying - if I could just take you back to the Full Court decision. It is tab 7, the Full Court of the Federal Court decision. And just on - I know it is hard to find, but I am just trying to explain why we put the argument we are putting. And as they said, and - have got at page 10 of the Federal Court decision, when they refer to the Full Bench's conclusion. And at the bottom of the page:

PN2078

We think that the only way in which clause 11.2 can be given a sensible meaning is by reading the expression, required severance pay, as a reference to clause 8.5 of the 1998 agreement.

PN2079

8.5 is where the severance payment provision kicks in. And then over the page, the Full Court of the Federal Court concurs with the conclusion of the Full Bench, and at the end of that paragraph 23, the last sentence:

PN2080

In our view, the terms of clause 8.5 of the agreement is the meaning properly to be given to the term, required severance pay, in clause 11.2.4.

PN2081

So that is the first point we read. While it was determined that the award and the agreement be read in conjunction, as opposed to what ANZ had argued, that the terms of the award were incorporated, because that is the reason that had to be determined, and they said, no, we reject that. We reject that. The link is in terms of the required severance pay, the linkage to the reference in clause 11.2 is to 8.5. So the first point, we say, they didn't throw out - they didn't say, ANZ, you can walk away from redeployment obligations. Now, at paragraph 8 of their contentions, they say - ANZ say:

PN2082

There was no failure by ANZ to preserve relevant provisions of clause 8 of the ANZ agreement.

PN2083

We directly - we totally reject that contention. As we have already stated, at no stage in this process did ANZ issue the affected employees a notice advising that their positions in Funds Management was redundant, and that they were being place on redeployment. Nor at any stage during this process did ANZ seek to place employees in directly comparable positions.

PN2084

Now, at paragraph 9, I suppose I will do these two together, and this is for the proposition that was further advanced yesterday. And this proposition being that at paragraph 9, which sets out - and I referred to it previously, it sets out what ANZ basically included in their letter to the employees on 12 April. Now, they claim that the former employees in question were provided the option. The option being, you continue employment with INGA in what they contend is - contends constitutes acceptable alternate employment. Or, you have the opportunity to explore redeployment within ANZ, on the understanding that should you not - you should have no expectation of retrenchment pay if that i snot successful.

PN2085

They claim that that process accords with their obligations under the agreement. And we say they don't. The process that ANZ has followed in this whole matter does not accord at all with the obligations under the agreement. The redeployment obligations by ANZ under the enterprise agreement are not met by an offer, as we said before, from another employer. Nor is it met by ANZ threatening to deny employees their redundancy entitlements. They also claim that their approach is consistent with the industrial instruments and is also fair and just.

PN2086

Well, we say that submission should be rejected. It is not - their approach is not designed to be fair to the employees as claimed by ANZ. nor is it designed to provide - nor did the process provide the people with options as claimed by ANZ. There is nothing in the material, nothing in the material that they have tendered, which indicates that they have facilitated nay of these employees - facilitated them pursuing redeployment within ANZ. There is a statement. There is nothing to say they have facilitated it.

PN2087

Now, I just want to just explain this point about - there is a lot of reliance put on the Transmission of Business clause. Well, I suppose there are three propositions that were put. There was - basically they say the scheme is, you have got 7.2, 11.2, and clause 8. And they say, the overriding objective of that is to maintain people's continuity of employment, and that is what they - that is what their overriding objective was.

PN2088

Well, the first point we say on that is, we would probably suggest that a big motivation in ANZ pursuing this Joint Venture was, in terms of the approach - I retract that. We would suggest that one of the motivations in the approach that ANZ has adopted in respect to this Joint Venture in terms of the employment issues, has been motivated by the issue of cost. The transmission of business. Transmission of business deals with whether industrial instruments are transferred along with a business. And in the case of clause 11.2, it deals with the continuity of service.

PN2089

It sets out what happens, right, in those cases. Transmission of business is not about the transmission of employees. ANZ can out-source a business function to another entity. In this case it outsourced its Funds Management to an entity known the Joint Venture. And the out-sourcing exercise can lead to employees in ANZ having their positions made redundant. In this case, it affected the employees in Funds Management, who were employed in that part of Funds Management.

PN2090

But the issue of what happens to those employees, those who were impacted, whose position is now redundant, tha tissue is to be determined by the industrial instruments that govern their employment. And the industrial instruments that govern their employment sets a scheme or a regime. And the scheme of those instruments is what we have said. The scheme is, one, your position becomes redundant. Two, the employee - you are notified of that. You are supposed to be notified of that too.

PN2091

Two, employee is placed on redeployment. Three, all avenues to redeployment are to be exhausted. Four, the notice - then if that is unsuccessful - if unsuccessful - you might be successful, and you continue your employment with ANZ. But if unsuccessful, you are given a notice of termination of at least six weeks. And finally, you are paid your severance payment entitlement. That is the regime. It is not the TCR regime. It is a regime that operates within an industry that has since - and I will take a guess, the late - early 90s - have had agreements dealing with redeployment and redundancy.

PN2092

That is the regime. And the Full Bench of the Federal Court did not throw that out. They did not throw that out. And it is not correct to just come along and say, well, we have clause 11.2, we have clause 7.2, and we have clause 8, and they are all about maintaining employment. Well, the redeployment and redundancy provisions of the enterprise agreement are about maintaining continuity of employment. That is what their objective is.

PN2093

And the other point, the suggestion that their overriding objective is to maintain people's continuity of employment, we make the point that the evidence clearly shows, it is their own material - it is their own material - that a third of the 321 employees who went across on 1 May to INGA now no longer are with INGA. Now, whether by - some left of their own accord, and some by - through the redundancy. But the fact of the matter is, they are no longer employees of INGA.

PN2094

Now, before I sign off on this argument, we also make this point, which has been put by Mr McDonald, that we won't - our argument on the redeployment, or on the failure of - I retract that. Our argument on the failure of ANZ to comply with the redeployment processes under the agreement is not a narrow and technical reading of the provisions of the agreement. It is not. And just on - we clearly say that now - and one more point we have got to say, so if you will just give me a minute. In the material - two further points, if we could put it on this.

PN2095

We say there is nothing in the material or the witness statements that refutes the proposition that the redeployment process has not been applied. Now, there has been suggestions made - or in statements that have been put forward by Mr Kelly, that redeployment opportunities - sorry. The opportunities for redeployment for positions for the Sydney based staff were limited. Sir, the issue is quite clear, it is this. The issue is not whether there was redeployment opportunities for these people.

PN2096

The ANZs obligation to comply with the provisions of clause 8 of the agreement in terms of exhausting redeployment avenues, is not activated - it is not dependent upon the pool of redeployment. Their obligation is prescribed in industrial instrument. So the issue is not about - is not whether there were redeployment opportunities for these employees. The issue is that ANZ has an obligation to place employees whose positions have become redundant on redeployment.

PN2097

And as I have already explained in terms of the process, the process is not confined to place them in directly comparable positions. I have explained that there are options.

[11.20am]

PN2098

There is the scope for employees to be redeployed in other positions within the Bank, as shown in clause 8 of the agreement. But the point we make is this. The issue is not - it doesn't go to whether there is scope for redeployment. I mean, the issue is - there is an obligation under the agreement. You are to be placed on redeployment, and all avenues are exhausted. So the activation of that obligation is just not dependent upon redeployment opportunities being available.

PN2099

Sir, we say that the approach that ANZ has adopted in this matter is, we say, in breach of the obligations under the enterprise agreement. We say, and I just clarify - we say that their application is premature because they have tried to jump the first and second steps of the agreement. They have tried to come along here and say, well, these people are facing redundancy - sorry facing unemployment, severance - termination. And we say, well, no, look at the clause. The clause is not triggered until the employees concerned, or the staff concerned, are placed under notice of termination.

PN2100

And under clause 8, that doesn't come into play until after all the redeployment avenues - provisions - have been exhausted. So we say that that is premature, but we put it further than that. We say that they haven't met the conditions for the operation of clause 11.2. They have failed - their application is premature. They have failed to comply with their obligations under the agreement, and we say this. That they should not be rewarded - ANZ should not be rewarded for failing to comply with their obligations under the enterprise agreement by having their application determined or granted in part or in full.

PN2101

Now, that is our first ground in opposing their application. There is three further grounds which we will go to. But in terms of putting where it sits, I think Mr McDonald put to you yesterday his outline of propositions - more than his outline - that in terms of discretion, that the Commission - because there is exercise of discretion in terms of this matter by the Commission - in terms of discretion, the principle is whether or not the INGA offer is acceptable alternate employment. Mr McDonald put it:

PN2102

If the Commission determines that it is, then this should lead the Commission in a proper exercise of its discretion to grant the ANZ application and vary the severance pay to nil.

PN2103

Now, what we say is that - and we are going to go to the proposition about whether it constitutes alternate employment. But the point we make, and we say it is supported by the authorities quite clearly, is that it is not just about you being satisfied whether the employment constitutes acceptable alternate employment. That is one factor. It is not the only factor. It is not the only factor.

PN2104

And we are saying one of the important factors in this case - it may not be important in Westpac, and we will come - and we will explain why. In Westpac it is a different proposition altogether. But in this case, one of the important factors that we say the Commission has to take into consideration, in exercising its discretion, is that there is an agreement that certain obligations for redeployment, that ANZ has not followed those provisions, and that they should not be now awarded or rewarded - sorry, rewarded, for failing to comply with those provisions. And as the evidence of the witness evidence clearly shows, that there was a preference for redeployment, and those concerns were raised. Those concerns were raised.

PN2105

So that is the first ground we put on terms of why we say the Commission should not grant their application. And can I just make one more point? It is of concern to the FSU that if clause 11.2 can be used the way that ANZ is attempting to use it, basically, skipping the steps 1 - step 1 and step 2 of the agreement, and coming along here to seek relief, without them trying to redeploy - because there is going to be future restructures. I mean, they have already told us - which we will come back to - they have already told us it is a changing world, nothing stands still.

PN2106

There is going to be future restructures and organisational changes. If clause 11.2 is going to be used in that way, or be allowed to be used in that way, well, then that makes the provisions of clause 8, the redundancy provisions - sorry - the redeployment provisions of clause 8, basically redundant. Because they will just walk up to the Commission and seek relief. That is why we say clause 11.2 is triggered, when you get to the state of - notice of termination, and you are facing severance payments. It is not triggered when your position becomes redundant.

PN2107

THE COMMISSIONER: We might just take a five minute break, and resume.

SHORT ADJOURNMENT [11.27am]

RESUMED [11.36am]

PN2108

THE COMMISSIONER: Yes, thank you.

PN2109

MS MALONEY: Thank you, Commissioner. If I can refer you to page 18 of our contentions as contained in our book.

PN2110

THE COMMISSIONER: Yes.

PN2111

MS MALONEY: This - we will deal with the second ground which we put in opposition to the - second ground, we submit, as to why ANZs application should be rejected. And this goes to the issue of consultation and advice process with the employees and the FSU. It is our contention that the consultation and advice process was - has been completely inadequate in this matter. Sir, in ANZs contentions filed on 5 December 2003, they claim at paragraph 20 that their communication and advice that they gave to employees, their contentions are at tab 19. They claim at paragraph 20 and 21 of those contentions:

PN2112

The communication advice given to employees by ANZ was, at all material times, clear, accurate and comprehensive.

PN2113

And then the 21:

PN2114

ANZ fulfilled its obligations to notify and consult the FSU and staff insofar as its business decisions impacted on employees.

PN2115

Then further in their submissions - or Mr McDonald said yesterday, referred you to the statement of Mr Kelly and the various attachments, and claimed that ANZ had put information on the table as early as possible, to employees, and referred to the correspondence of January 2002 and March 2002. And that ANZ - that the material supports, in their proposition, that ANZ had an active role to keep staff informed.

[11.38am]

PN2116

Sir, we reject these suggestions. Employees were only advised - actually this is not incorrect. Employees received a letter dated 12 April 2002 that the Joint Venture would be commencing on 1 May 2002. You will probably recall, sir, that yourself and myself first became aware of the date of the operation of the Joint Venture in the proceedings before you on 11 November 2002. And in those proceedings were also advised at that times - those proceedings were on 11 April. We were advised by Mr Bunting, who was representing the Bank at that time, that the letters of offers by ING would be going out the next day. So they would be going out on the 12th. They didn't receive them on the 12th, they would be going out on the 12th.

PN2117

THE COMMISSIONER: What has happened to that 12 months?

PN2118

MS MALONEY: Sorry?

PN2119

THE COMMISSIONER: What has happened to that 12 months?

PN2120

MS MALONEY: Well, sir, to - in support of our proposition that the advice process - consultation advice process was inadequate, I refer you to the witness statement of Mr Anthony Joseph Beck, which is contained at tab 6, and if I could take you to that statement. This is Beck. Can I say, sir, that - and Mr Beck, at the time of making the statement - and it is signed and dated 20 January 2004, was then the National Secretary of the Finance Sector Union. Mr Beck has since left.

PN2121

THE COMMISSIONER: Gone to a grand new life, yes.

PN2122

MS MALONEY: But at all times - and particularly at all times. So if I refer you to Mr Beck's statement. Obviously he commenced employment with the FSU in March 1982. He held a number of appointed elected positions at the time, as I said, making the statement, was the National Secretary of the Finance Sector Union of Australia. In paragraph 3 of his statement he states, he is aware of the application that has been lodged by the ANZ in this matter, in terms of the order or variation they seek. Sir, if I can take you to paragraph 4 of his statement, he says:

PN2123

On 17 January 2002, Bruce Bonyhady, Managing Director, ANZ Investments wrote to the FSU advising that it had entered into a memorandum of understanding with ING ...(reads)... advising of the MOU and ING, and the staff answer sheet.

PN2124

And annexure A to Mr Beck's statement is a copy of Mr Bonyhady's letter. Now, I think these have been referred to, but I will refer to them in the context of our submission. So annexure A is a copy of the letter that Mr Bonyhady sent to the FSU dated 17 January 2002. And attached to that is the media release. As I say, some of this material was already included, but you missed it, but I refer to it. And the letters to staff by Mr Bonyhady dated 17 January to staff. And then the question and answers document dated 17 January 2002.

PN2125

Now, sir, if I can go back - if I just refer to the letter first, sir, 17 January 2002, to Mr Beck. It states, first paragraph:

PN2126

You may recall that in March 2001 ANZ Banking Group announced that it intended to seek a joint venture partner as part of its strategy to grow and improve its fund management business.

PN2127

It goes on to state:

PN2128

I am taking this opportunity to advise you that ANZ has now entered into a memorandum of understanding with ING with a view to establishing a joint venture ...(reads)... released to their respective audience today.

PN2129

Then Mr Bonyhady goes on to say:

PN2130

Given the commercial sensitivities, we are unable to provide more information to any stakeholders at this point in proceedings.

PN2131

If I go back to Mr Beck's statement, paragraph 5, and he refers to Mr Bonyhady's letter, in which he states about the fact that there is commercial sensitivities, they are unable to provide more information on the - in - to any of the stakeholders. He also refers to the fact that in the letter to staff, which is attached, and Mr Bonyhady stated, this is in the letter to staff:

PN2132

The formal completion of the joint venture is still subject to confirmatory due diligence documentation and necessary regulatory approvals. I will ...(reads)... will be making any further comments.

PN2133

So Mr Beck makes the statement at paragraph 7, it is clear form the letter and to both the FSU and to the staff that it was - ANZ was still at what you call the intention stage. They were seeking to forward joint venture, but no formal agreement had been reached. And then at paragraph 8 of his statement, Me Beck refers to the staff questions and answer sheet, which was provided to the staff in January 2002. And as we can see from this staff questions and answer sheet, it provided very limited information as to what impact the proposed joint venture would have n the jobs of employees in ANZ Investment, and what - and this can be gleaned from the following extracts. And the first one which is - and extracts from the document.

PN2134

I will take you to the document, sir. Question - the document is attached. There is not numbers in these, but if you go to - sorry, they are not numbered. The second page of the document, the fourth question down:

PN2135

What will be the management structure of the Joint Venture?

PN2136

Sir, do you see that? I haven't got a question number:

PN2137

At this stage determination in respect of organisation structures have not been made.

PN2138

Then we go down to - skip one to go down to the next question:

PN2139

What will happen to my job? In the short term it will be business as usual for all staff. Following agreement to create the JV the rationalisation of ...(reads)... to make predictions on individual situations.

PN2140

And the next question:

PN2141

What are my options? Can I get a package? Can I stay with ANZ? Do we need - have...

PN2142

I think there is a word missing there:

PN2143

Do we need - have to accept a role in the JV? What happens if I refuse a role in the JV?

PN2144

The answer:

PN2145

There will be numerous questions around job security and your options going forward. Don't make any rash decisions about your future until you ...(reads)... from the change workshops many of you attended in the last few months.

PN2146

And the last question I take you to - the next one:

PN2147

How can I find out more about how this affects me? Who can I talk to?

PN2148

Answer:

PN2149

Given the commercial sensitivities, there is no information beyond today's press release which can be provided. this has been a long process ...(reads)... uncertainty for you as soon as possible.

PN2150

So if I take the Commission back to Mr Beck's statement, in paragraph 9 he states:

PN2151

Beyond advising that ANZ had entered into a memorandum of understanding with ING, the information the Bank provided to FSU and staff in January 2002 was limited and vague.

PN2152

Now, the next point of time that comes, and is referred to in paragraph 10 of Mr Beck's statement, and that is March 2002 and that refers to - Mr Bonyhady wrote to the FSU:

PN2153

Attached to the letter was a document titled, Joint Venture Employment Issues Australian Guiding Principles.

PN2154

And this correspondence is contained in annexure B to Mr Beck's statement. And that is a letter addressed to Mr Beck from Mr Bonyhady dated 4 March 2002, in which he firstly refers to his previous letter of 17 January 2000 - you have it, sir?

PN2155

THE COMMISSIONER: Yes.

PN2156

MS MALONEY: And he says:

PN2157

I am now in a position to provide you with some further details of our plans on the assumption that the Joint Venture arrangements between ANZ and ING go ahead ...(reads)... I sent to affected ANZ staff today.

PN2158

And he goes:

PN2159

In particular I draw your attention to the fact that the arrangements announced will involve a transmission of business, staff being advised ...(reads)... are give full and timely information about the arrangements and are treated fairly.

PN2160

And of course attached to the letter, which is the document you have seen, is the joint document titled, Joint Venture Employment Issues Australian Guiding Principles. Now, if I go back to the statement of Mr Beck, and I refer to paragraph 11 of his statement. Now, it was clear from the guiding principles that this was an ANZ document. I am referring to paragraph 11, and not a document that had been prepared jointly by ANZ and ING.

PN2161

While certain understandings were attributed to ING, there was no indication in the document of INGs agreement to these understandings.

PN2162

And also point 12 of his - paragraph 12 of his statement:

PN2163

It was also clear from the guiding principles that the Joint Venture was still at the memorandum of understanding stage and a formal agreement had not been reached on its formation.

PN2164

So at 4 March, there still was no final agreement on the JV, and this is clear, sir, in the first paragraph of the guiding principles. the first paragraph of the guiding principles:

PN2165

ANZ Banking Group has announced a memorandum of understanding with the intention of negotiating a binding agreement with ING to form a joint venture to promote mutual interests in the funding, management and insurance business.

PN2166

So as of 4 March 2002, it was still at a memorandum of understanding stage. Now, if I go back to Mr Beck's statement at paragraph 13, he then refers to - a meeting was held. He states:

PN2167

A meeting was held between the FSU and ANZ on 19 March 2002 in respect to the proposed joint venture arrangements between 2 and ING. ...(reads)... quite clear to the FSU that we should not assume that because the MOU was made that the formation of the joint venture was a certainty.

PN2168

And then paragraph 14, he goes:

PN2169

The discussion took place at the meeting on the entitlements of staff, of employment with the joint venture. In particular ANZ stated that staff who rejected ...(reads)... to negotiate on the matter but merely restated their position.

PN2170

Then at paragraph 15 Mr Beck refers to - advice that the union - that the union advise the Bank that it would be holding member meetings on 21 March. That we would respond to the Bank on 27 March as to where we were at the issue:

PN2171

At no stage in the meeting on 19 March did the FSU give an undertaking that would give ANZ a final position by 27 March.

PN2172

And then at paragraph 16, Mr Beck states, that:

PN2173

Due to other commitments the FSU was unable to make contact with ANZ on Friday 27 March, 2002. I have been informed and believe that on Monday, 25 March, there was ...(reads)... that the FSU was prepared to meet and discuss the issue.

PN2174

At paragraph 17, of his statement, Mr Beck states:

PN2175

ANZ response to our request for alternate meeting times was to fax to us on 26 March a draft application to vary the award and advised us that they intended to lodge the application in the Australian Industrial Relations Commission the following day.

PN2176

In paragraph 18 it states:

PN2177

The FSU believes that the actions of ANZ in lodging the application to vary the award, after failing to come back to us with alternate meeting dates, demonstrates a lack of genuineness on the Bank's part to pursue meaningful negotiations on the issue.

PN2178

Paragraph 19 just deals with an issue, and we make it quite clear, so there is no suggestion that FSU was ever misleading. At the point where we had the meeting with ANZ on 19 March, at that point we hadn't actually looked at - examined the issue. And at that point we indicated that those who didn't go across to ING - didn't want to go, should be entitled to their provisions under clause 8 of the agreement, which included redeployment.

PN2179

So our initial view was that, and this is reflected in paragraph 19 of Mr Beck's statement was that only staff who did not accept an offer of employment with the Joint Venture, and who are not successfully redeployed within ANZ would be entitled to severance payments. And that is all we communicated to ANZ on 19 March. Following further consideration of the legal implications, we formed the view that employees who accepted an offer of employment were also entitled to severance payments. And that was based on - our understanding of it was, when we first came before you.

PN2180

So it is just that we didn't put that at the meeting because we hadn't - we didn't - we hadn't looked into the matter. So we have just put that, because I think there is a letter attached to one of Mr Kelly's statements. And I think it is ANZ6. Yes, there is a letter in ANZ6, tab 21. 347 of the material, ANZ - it is a letter dated 26 March to Mr Beck, signed by Bruce - sorry, Mr Bonyhady, and in the second paragraph it says - it refers - sorry. He refers to the meeting that took place on 19 March. And the second paragraph says:

PN2181

We appreciated your observations that the employment guiding principles appear fair and appropriate in the circumstances, and that you have no issue about the arrangements of staff accepting offers made by the Joint Venture.

PN2182

Now, that - and I just want to clarify that, that is correct. That we didn't express a view at that meeting. It was subsequent to that meeting when we examined the industrial instruments, that we put - we came to a different conclusion. So I just wanted to clarify that. So if I can go back to Mr Beck's statement. Just in paragraph 20, he speaks to say:

PN2183

It is a consultation and advice process that ANZ has been completely inadequate in this matter.

PN2184

And we take you to the point, and we have already talked about when they received the letters. Actually they didn't receive them the 12th. They were sent on the 12th. And that we first became aware of, as did the Commission, on 1 May. But taking you to the last sentence of that paragraph, even as recent as their correspondence of 26 March - sorry. You might remember their correspondence of 26 March is the fax that has the application to vary attached, or the draft application. And that is page 346. Yes, it was annexure H to Mr Kelly's statement, ANZ6, but I think it is page 346. And that is the fax attaching - we say - it says at the bottom:

PN2185

It is important that we know where we stand in these matters with the FSU and believe that we must now proceed to take the issue to the Australian Industrial Relations Commission to seek some certainty.

PN2186

This is the last paragraph:

PN2187

We intend to pursue this course of action tomorrow morning. If you wish to discuss the matter further please call me on those numbers.

PN2188

And the point was made, as the last point is made in Mr Beck's statement at paragraph 20, is that even as recent as that correspondence, ANZ did not advise the FSU that the Joint Venture was to commence on 1 May 2002. Now, sir, Mr Beck, as a response, has read the statement of Errol Charles Kelly dated 10 April 2002. That is the statement that is contained in ANZ6. Paragraph 21, he states:

PN2189

I have been shown a copy of the witness statement of Mr Kelly.

PN2190

And states:

PN2191

Contrary to the claims by Mr Kelly, the information and consultation and advice provided by ANZ to employees and the FSU in respect to the ...(reads)... of the issues in dispute.

PN2192

Now, Mr Kelly makes a number of claims in his - in that statement. And in paragraph 22 of Me Beck's statement he refers to paragraph 7 to 15 of Mr Kelly's statement that is contained in ANZ6, where he refers to the staff consultation and material that was circulated in January, 2002 and March 2002. He says in his statement:

PN2193

It is claimed by Mr Kelly that ANZ was concerned to keep staff fully informed and to give them as early as possible practical guidance about the employment implications of the Joint Venture.

PN2194

Now, as we show at paragraph 23:

PN2195

Far from providing employees detailed information, the information provided to employees in January was limited and vague.

PN2196

And we refer back to his previous paragraphs:

PN2197

The guiding principles which were provided in March were non-committal in terms of ING.

PN2198

It was an ANZ document:

PN2199

And continued to emphasise the fact that no formal agreement had been reached on the Joint Venture.

PN2200

And employees were subsequently given less than - actually it is less than two weeks, I worked out - but less than three weeks notice that the new Joint Venture would commence on 1 May. And then in his statement of 10 April 2002, Mr Kelly made some claims regarding consultation for FSU, and these are addressed by Mr Beck in - commencing at paragraph 24. Rather than undertaking genuine consultation with the Union, as claimed by ANZ, ANZs approach over the issue has been completely disingenuous.

PN2201

In paragraph 25 of Mr Beck's statement, he refers to paragraph 17 of Mr Kelly's statement, saying that the FSU did not take up ANZs offer in their letter of 7 January for further clarification of issues. It was clear from their letter, and company material, that no more information would be available due to commercial sensitivities. Then at paragraph 26 of his statement, Mr Beck refers to the claim by Mr Kelly that the FSU did not take up the opportunity provided in their letter of 4 March to discuss the matter any further.

PN2202

Now, we say - Mr Beck says there is, well, it is ANZ who proposed to deny the employees their entitlements. If an employer is proposing to alter the conditions of employment, it is incumbent upon the employer, and consistent with their obligations under the award in the agreement to discuss the matter with the Union. Contrary to the implications in Mr Kelly's statement, it was not the responsibility of FSU to instigate such a meeting. And then in paragraph 27 we refer to the issue about who was supposed to give - sorry, the claim was to give a response by the close of business, and we refuted that. And in paragraph 28, contrary advice by Mr Kelly at paragraph 25 of his statement of 10 April 2002:

PN2203

At no time during the meeting on 19 March, or subsequent to that meeting, did ANZ seek a resolution of the issue.

PN2204

So, sir, I would leave the statement there, but as it shows - that we believe it supports the proposition - or our argument is that the consultation and advice process has been completely inadequate. Now, we refer to the supplementary statement of Mr Kelly, filed and served by ANZ on 11 February 2004. That is found at tab 24, sir, in the ANZ book. Sir, attached to - sorry, sir, I meant - I am referring to 11 February document. Yes, that is right. My fault. Yes, Mr Kelly has filed three statements.

PN2205

THE COMMISSIONER: Yes.

PN2206

MS MALONEY: So I am referring to the one filed - dated - sorry - 11 February 2004. That is what I meant.

PN2207

THE COMMISSIONER: Yes.

PN2208

MS MALONEY: And attached to that document, you will see in annexure B, is a document titled, Questions and Answers for Employees Australia, and it is published to its employees in connection with the ANZ ING Joint Venture between 10 April 2002, and 30 May 2002. It is annexure B, Question and Answer document.

PN2209

THE COMMISSIONER: Yes.

PN2210

MS MALONEY: Well, first we make one observation first, Commissioner. That this is new material, and we question why the material wasn't filed by ANZ in December, and why it wasn't filed until now. Because it could have easily been filed in December. Because this is one of their claims, and their contentions, as I said at the outset. Was that they say that they have - the communication and advice given to employees has been clear and comprehensive.

PN2211

But having said that, we are not going - whilst this material in annexure B contains information to employees as to the employment implications of the Joint Venture, the information is provided from 10 April to 30 May. That is, it hasn't been provided prior to - well, during a period prior to when the offers of employment were sent out. So the first here is the 10 April. The offers of employment were sent out on 12 April. They are asked to respond by 26 April. And this is the first detailed information we see that comes out in terms of the implications of the Joint Venture on their employment, the employment implications.

PN2212

That is the first point we make. So it is provided two days - or the first part of it, provided two days before the offers of employment are sent to ANZ employees and during the two week period, like, as he works at - it has to be less than two - it was 26 - yes, less than two weeks in my adding up, in which they had to consider the offer and after they had to sign up on the offer. That is the first point we make. At paragraph 10 of the supplementary statement on 11 February, Mr Kelly refers to - sorry, paragraph - yes, 10. At paragraph 10 of his statement, Mr Kelly states:

PN2213

I refer to paragraph 7 and 8 of ANZ6 in which I speak of an ANZ announcement made in March 2001 and a further ANZ announcement made in January 2002. In between these two announcements updating meetings with staff were conducted at irregular intervals in Sydney and Melbourne. These were attended and conducted by the managing director of ANZ Investment and myself.

[12.08pm]

PN2214

And then he goes in paragraph 11:

PN2215

During the course of the second half of 2001 ANZ Investments sponsored various changes in management initiative.

PN2216

And they are listed there in paragraph 11. Now we don't dispute that that occurred, and we don't question - we don't challenge that that occurred, but the point of the matter is that the time when the second announcement was made, January 2002, so this all happened - yes, between the - before that - but even at the time the second announcement was made in January 2002 there was still limited information available to the employees as to the implications of the joint venture on their employment, and the evidence of Mr Beck demonstrates that.

PN2217

So what we have is question and answers for employees dated 10 April 2002, two days before the offer is sent out, and they have mailbox questions answered covering the dates of 15 April, 17 April, 24 April, and of course they had to sign up by 26 April, and then further answers and questions on 9 May to 30 May, well by that time they have already signed the contract - the document. We reject the claim that ANZ had put information on the table as early as possible and had kept staff informed.

PN2218

The fact of the matter is here we have, as shown from the material that was sent out firstly in January 2002, then in March 2002, it was limited and vague information to provide to employees as to the impact on them. It might have other things but we are talking about what impact it has on their employment. The guiding principles issued by ANZ, now we say that is a document that was prepared by ANZ and whilst March 4, 2002 - and it was distributed to employees - whilst it attributed certain commitments to ING, it was still at that time an ANZ document.

PN2219

PN2220

There is no indication in the document that ING agreed to it, it is not an ING document. And it also at that time emphasised the fact that the joint venture was still at a memorandum of understanding stage, so we have got no agreement. They still emphasised that point when they came to meet the union on 19 March. So this information that has been provided so far, rather than being comprehensive as claimed by ANZ, it has been limited. And as we both learnt, as I said previously, the Commission and the union didn't know about the operation of it until 11 May - sorry, 11 April.

PN2221

So we would say that contrary to the submissions that have been put by ANZ, and it is a very important point because the people who received those offers had to be after 12 April, because they were sent on 12 April, they had less than two weeks to consider it. And the first detailed information they were provided as to the implications on their employment was sent out on 10 April 2002. So we say that the consultation advice process, and we say that the evidence of Mr Becks supports this, demonstrates it has been completely inadequate in this whole process.

PN2222

And it is a very important thing; people are talking about changing their employment, it is looking pretty serious. It has financial implications for them, there is job security implications for them, it is not something you just, you know, they were basically put in a pressure cooker for less than two weeks.

PN2223

MR McDONALD: Where do you get the less than two weeks from sorry?

PN2224

MS MALONEY: Because 26 April is when they wished to have the response by, it is in the letter. We were in proceedings on 11 April, and I think I have got the reference there, it is found at - - -

PN2225

THE COMMISSIONER: We can probably say it is near as down, but is the swearing to two weeks.

PN2226

MS MALONEY: Yes, sir, yes, they would have received it on the 13th and however you minus 26, minus 13, unless my maths are wrong, it is less than 14, so that is what he wrote, yes. Originally we thought they received the letter on the 12th but then I realised they hadn't received the letter on the 12th, that is where I got it from, so it is less than 13, less two weeks. And there is - I can find the reference to where we were advised in the transcript.

PN2227

THE COMMISSIONER: No, that is all right. Yes.

PN2228

MS MALONEY: So that is our second ground where we say the ANZ's process - sorry, application - should be rejected. Sir, if I can take you to page 19 of our contentions filed on 23 January, the next ground we advance in opposition to the ground for rejecting ANZs application is that the employment offered by INGA does not constitute acceptable and permanent employment. We say that on any objective test, and we have no dispute that it has to be an objective test, on any objective test the employment offered doesn't constitute acceptable alternative employment.

PN2229

In support of this we will be referring you to the witness statements that we have lodged in respect to the former ANZ employees, and we will also be taking you to a comparison document which is contained in tab 7 of our case book. However before I go to those two documents, and of course then I will answer the contentions, the matters that have been put by ANZ. But before I go to those two documents can I just draw the Commission's attention to the contentions lodged by ANZ on 5 December 2003, tab 19. At paragraph 14, and I can quote from paragraph 14 of those contentions. They state:

PN2230

The employment of transferred staff by ING Administration Pty Ltd has the following characteristics...

PN2231

And the first characteristic is (a):

PN2232

Terms and conditions of employment are stipulated in the Banking Services ANZ Group Award 1998 and the ANZ/FSU Agreement 1998 continued to apply.

PN2233

Now, sir, I think you asked the question yesterday, which is what I am coming to right now, what underpins the enterprise agreement that has been certified in INGA. Now if we refer you to that INGA certified agreement, and a copy of that is contained at - it is annexure to Mr Payne's statement, tab 25 of their book.

PN2234

THE COMMISSIONER: Yes, I have that.

PN2235

MS MALONEY: This is the INGA - sorry, ING Administration Pty Certified Agreement 2003 which was certified by Commissioner Richards on 14 January 2004. If you go to clause 1.7 of the agreement, 1.7 - - -

PN2236

THE COMMISSIONER: Mine starts at 3.5, so I am missing some pages.

PN2237

MS MALONEY: Well, I think we have got - - -

PN2238

THE COMMISSIONER: Unless it is back in here somewhere.

PN2239

MS MALONEY: - - - we have got a full copy here. It is out of your book.

PN2240

THE COMMISSIONER: One point - - -

PN2241

MS MALONEY: One point seven.

PN2242

THE COMMISSIONER: One point seven, yes.

PN2243

MS MALONEY: One point seven is titled, Relationship to Awards and Agreement, and states:

PN2244

It is the intention of the parties that this agreement will govern all terms and conditions of employment for the employees covered by this agreement to the ...(reads)... award. Where there is an inconsistency between the award and this agreement, this agreement will pervade to the extent of the inconsistency.

PN2245

Now if I take you to clause 1.3, which is definitions, you will see that the definition of award there is the Insurance Industry Award 1998. Now can I just take you to, in our book, tab 8?

PN2246

THE COMMISSIONER: Yes.

PN2247

MS MALONEY: And contained in tab 8, sir, is a copy of the statutory declaration filed by Edward Bradshaw, the Executive Director, People and Culture of ING Administration Pty Ltd, and if I take you to - it is declaration 5 in respect to the certification of agreement - and if I take you to part 6, I am sorry, it is about the third-last page.

PN2248

THE COMMISSIONER: Yes, I have that.

PN2249

MS MALONEY: Part 6 about the agreement, and you can see, sir, that there is the specified - the Insurance Industry Award 1998, which indicates that is the award that has been used for the purposes of determining the no disadvantage test. Now, sir, the only point we make on this is - sorry - the point we make on this is that under the principles of transmission of business, INGA became bound by the ANZ award in respect of the former ANZ employees who transferred to the company on 1 May 2002.

PN2250

This of course is a point that was extensively promoted and still is being promoted by ANZ as a benefit in its employment guiding principles. But despite that fact, according to the statutory declaration, the Insurance Industry Award 1998 is the relevant award for the purpose of whether the agreement passes the no disadvantage test. And there is no indication in the statutory declaration of Mr Bradshaw, or in the agreement, or in the decision of Commissioner Richards, that there was a reference was made to the fact that the company was bound by the ANZ award in respect to the former ANZ employees.

PN2251

Now we just make that point; we are not aware that that was - and that is of concern to us because, as we will show, the Insurance Industry Award 1998 contains less favourable conditions than the ANZ award, so that is the first point we make in respect to that. Can I ask you what time - - -

PN2252

THE COMMISSIONER: Whenever you like.

PN2253

MS MALONEY: Well, I am just about to go on to the witness statements and then to the documents. I would just like to seek guidance from the people - - -

PN2254

THE COMMISSIONER: Yes, if it is a convenient time now that is fine.

PN2255

MS MALONEY: Is that fine, Mr McDonald?

PN2256

THE COMMISSIONER: We can resume at 2 o'clock. All right, we will do that. We will adjourn on that basis, resume at 2.00 pm.

LUNCH ADJOURNMENT [12.24pm]

RESUMED [1.56pm]

PN2257

THE COMMISSIONER: Good, Ms Maloney.

PN2258

MS MALONEY: Sir, I now wish to go to the - if I continue on on our argument that the employment does not constitute acceptable alternate employment. I referred before, just before the lunch break, to the fact that the ANZ award - sorry, that the Insurance Industry Award was the basis of the no disadvantage test for the ING agreement. I would like to now to take you to the witness statements contained in tab 5, which is exhibit FSU7. Now, sir, these statements by the former ANZ employees set out the reasons why the employment offered to the employees transferred to INGA does not constitute acceptable alternative employment.

PN2259

I firstly refer to the statement of Jessie Byrnes, and I refer you to paragraph 6 of Ms Byrnes' statement. And in paragraph 6 Ms Byrnes states:

PN2260

The reasons why I believe the position with INGA was not an acceptable alternative to the position I held with ANZ includes firstly I have missed two ...(reads)... I do not have access to the same facilities or benefits by transferring to INGA, for example, I no longer receive the share bonus of $1000 per year.

PN2261

So they are clearly objective points that have been raised by the statement, they are not just subjective expressions of concern by Ms Byrnes. If you go to Martin Juan's statement, that is the next one, and I take you to paragraph 6 of his statement. In paragraph 6 he sets out the reasons why he believes that the position with INGA was not an acceptable alternative to the position he held with ANZ include:

PN2262

INGA cannot possibly offer equivalent career progression for me. ANZ is a much larger employer in Australia with a far broader range of career options...(reads)... role. In ANZ I previously directly managed a team of up to two client staff, shortly after 1 May 2002 I had no staff management responsibilities.

PN2263

The next dot point:

PN2264

I lost a number of facilities benefits by going over, including discounted home loans, credit cards.

PN2265

The next dot point refers to the 1000 bank share allocation in ANZ and no share options. And the last dot point:

PN2266

In INGA there is no six monthly cash bonus payment.

PN2267

If I go to the statement of Janis Smith, which is the next one, and I refer the Commission to paragraph 7 of Ms Smith's statement where she states:

PN2268

The reasons why I believe that the position with INGA was not acceptable alternative employment to the position I held with ANZ includes that INGA cannot ...(reads)... such as retail banking. Also by going over to INGA I do not have access to the same facilities or benefits such as the share bonus of $1000 per annum.

PN2269

The next statement is Dola Matar, and I refer to paragraph 6 of her statement. Therein she states:

PN2270

The reasons why I believe the position with INGA was not an acceptable alternative to the position I held with ANZ include that ANZ has a large number ...(reads)... would have been a much bigger range of choices and I would not now be doing the role I have been given by INGA which is not what I want to be doing.

PN2271

So there is the issue of limited promotional opportunities clearly in that statement. The next statement, Gregory Sclanders, and I refer to paragraph 5 of his statement wherein he indicates that the reasons why he believes the position with INGA was not acceptable alternative employment includes the fact that he lost a number of facility benefits by going over, including the share bonus and share and save scheme. The next one is the statement of Trevor Donald Rees, and I refer to paragraph 6, and I referred to this previously, I think I - no, I am not sure, I just - in paragraph 6 Mr Rees states:

PN2272

The reasons why I believe the position with INGA was not acceptable alternative employment to the position I held with ANZ are that INGA could not ...(reads)... in the role changed. I was constantly told, "That is no longer your responsibility," or, "At INGA we don't do it that way." The new role...

PN2273

And this is - I draw your attention to:

PN2274

...the new role involved less authority, responsibilities and skill.

PN2275

Sir, the next statement is from Ms Cao, and this is the statement, before I address this, this is the statement you raised about the signature. It is our understanding that Ms Cao signed the statement with her married name, she is - yes, that is my understanding. We made inquiries at lunch time.

PN2276

THE COMMISSIONER: Good, thank you.

PN2277

MS MALONEY: In respect to Ms Cao's statement, we refer to paragraph 6 of the statement where she states:

PN2278

The reasons why I believe the position with INGA was not an acceptable alternative to the position I held with ANZ include that at ANZ we had the protection of an industrial agreement. At INGA we do not receive the annual pay increases of four percent. I no longer receive the employee share acquisition plan...

PN2279

That is the $1000 share issue:

PN2280

...the employee share save scheme has lapsed, which makes the point I chose to work for ANZ while I have no choice but to work for INGA. I lost a number ...(reads)... I also take on additional duties due to the reduction of staff numbers. My job title became a senior with no additional payment to compensate for it.

PN2281

The next statement is from Karen Bloor, and I refer to paragraph 6 of the statement:

PN2282

The reasons why I believe that the position with INGA was not an acceptable alternative to the position I held with ANZ include that at the time of the transfer ...(reads)... transfer to INGA, where this was not respected, I have been made redundant from INGA. INGA could not offer equivalent career progression for me.

PN2283

And then in paragraph 8 states:

PN2284

I believe that my career prospects at ANZ would have resulted in me being in a better position in terms of salary conditions and career than I am now as a result of the forced transition to INGA.

PN2285

The next statement is Paul Arora, and I refer to paragraph 6 of his statement:

PN2286

The reasons why I believe that the position with INGA was not an adequate alternative to the position I held with ANZ include that the position at INGA required ...(reads)... of facility benefits by going over, including discounted home loans, credit cards, etcetera. I no longer receive incentive bonuses paid by ANZ.

PN2287

The next statement is Graham Schofield, and I refer to paragraph 6 of Mr Schofield's statement. Actually I will refer to paragraph 5 first, yes. In paragraph 5 he states:

PN2288

My work duties were completely changed when I was required to reapply for a position at the end of 2002. From the beginning of 2003 I became mid-range ...(reads)... have the opportunity to apply for other positions. I do not have this option at INGA as they do not have alternative positions that I could apply for.

PN2289

Then in paragraph 6 he states:

PN2290

The reasons why I believe that the position with INGA was not an adequate alterative to the position I held with ANZ include that INGA cannot offer equivalent career progression for me.

PN2291

And the next point which we draw your attention to:

PN2292

As most of the work I was doing has been outsourced to IBM GSA, I have been left with little technical work and unclear responsibilities. As a result the position is less interesting, less challenging and less satisfying.

PN2293

Now, sir, we are going to come back to that statement when we - yes. We will come back to that statement when we deal with some contentions of ANZ about the issue about some of the former employees, which included Mr Schofield, not being able to accept change. So - but I just want to record that here. The next statement of Stephen Yiu and I refer to paragraph 5:

PN2294

My work duties have been substantially changed since the transfer and that I now primarily ...(reads)... perform these tasks due to the work being outsourced -

PN2295

that is outsourced from INGA, not from -

PN2296

We have recently been informed that due to the support person at Pitt Street finishing and not being replaced we will shortly be required to perform a further range of lower level duties which are not included in our job description.

[2.10pm]

PN2297

And then at paragraph 6:

PN2298

The reasons why I believe that the position with INGA was not an adequate alternative to the position I held with ANZ include that ...(reads)... less interesting, less challenging and less satisfying.

PN2299

I refer to the statement of Silvia Tresidder and I refer to paragraph 5:

PN2300

The reasons why I believe that the position with INGA was not an acceptable alternative to the position I held with ANZ include that ANZ ...(reads)... opportunity for other permanent part-time positions.

PN2301

I refer to the statement of Lydia Lim and I refer to paragraph 7 of Lydia Lim's statement. I will take you to paragraphs 7 and 8. Paragraph 7 of Ms Lim states:

PN2302

I believe that ANZ had already decided or were at least contemplating that my team and I would be redundant before the move to ...(reads)... planning to make the position redundant in Sydney in any case.

PN2303

8.2 she states:

PN2304

I no longer receive $1000 per annum bank shares or manager's options. 8.3, I no longer receive the annual wage ...(reads)... is shorter than at ANZ.

PN2305

Then 8.6, over the page:

PN2306

INGA cannot offer equivalent career progression for me. INGA -

PN2307

we draw the Commission's attention to this -

PN2308

INGA does not have a transparent job grading system. I am unable to determine by status, salary or duties whether positions that ...(reads)... margin lending, staff discounts -

PN2309

etcetera. The next statement is Vicki Thompson and I take you, firstly, to paragraph 6 of Ms Thompson's statement in which she states:

PN2310

Upon moving to INGA I commenced employment in a position of technical and compliance adviser. The reasons why I believe the position ...(reads)... already had a compliance manager -

PN2311

and you will just recall that Ms Thompson was a compliance manager in ANZ prior to going across to INGA so that is the relevance of that statement -

PN2312

INGA already had a compliance manager who was considered more senior than my ex-ANZ compliance colleague and myself despite us ...(reads)... as opposed to bonus structure at ANZ.

PN2313

And then paragraph 7, which I have already taken the Commission to, highlighted the fact that Ms Thompson has resigned from INGA and that is that there. The next statement I go to is the statement of Jodie Gafa and I take the Commission to paragraph 6 - actually I have taken the Commission to this paragraph, I won't repeat it, but it sets out in paragraph 6 that:

PN2314

INGA cannot offer equivalent job opportunities for me. At the ANZ I would have had the chance to transfer to positions closer to home -

PN2315

and this is the employee we said that if she had the opportunity to be redeployed within ANZ she would have looked for work closer to home and - well, I have taken the Commission to that. The next statement is Thomas Dy and I take you to paragraph 6 of that statement wherein Mr Dy states:

PN2316

The reasons why I believe the position with INGA was not an adequate alternative to the position I held with ANZ include that INGA ...(reads)... or benefits I had access to at ANZ.

PN2317

And I go to the statement of Margaret Arbuckle and I take the Commission to paragraph 6. In paragraph 6 Ms Arbuckle states:

PN2318

The reasons why I believe that the position with INGA was not an adequate alternative to the position I held with ANZ include that ...(reads)... lost employee share saver scheme -

PN2319

well, she has lost the employee share saver scheme -

PN2320

no longer receive the annual employee share acquisition plan -

PN2321

that is the $1000 share -

PN2322

lost the availability of staff credit cards, free bank cheques, travellers cheques, no bank fees ...(reads)... in place for staff protections under ING.

PN2323

The next statement is Yu Wang and I will take the Commission to paragraph 5 - sorry, sir, I will take you to paragraph 5:

PN2324

The reasons why I believe that the position with INGA was not an acceptable alternative to the positions I held with ANZ include that -

PN2325

and over the page highlights -

PN2326

The new role with INGA involves substantially more administrative tasks and as such does not entail as much responsibility ...(reads)... new agreement I will lose my RDO.

PN2327

The next statement is Ms Linden. At paragraph 6 Ms Linden states:

PN2328

The reasons why I believe that the position with INGA was not an acceptable alternative to the position I held with ANZ are INGA ...(reads)... including discount home loans, credit cards -

PN2329

etcetera. The next statement I refer to is Kirsten Morris and I will take you to paragraph 5. Ms Morris states:

PN2330

I believe the position at INGA was not acceptable to employment because there were material changes to my conditions of employment which left me worse off, in particular the hours of work were longer and management intention was lacking.

PN2331

In paragraph 6 - I have taken the Commission to this. This is the ones ..... and I have explained that to the Commission already, I am not going to take up time. Now the next one is Michael Nurse and remember Mr Nurse was, before going across to INGA, a manager, superannuation and retirement income. I take the Commission to paragraph 7 of Mr Nurse's statement. At paragraph 7 Mr Nurse states:

PN2332

The reasons why I believe that the position with INGA was not an acceptable alternative to the position I held with ANZ include that, 7.1, I had substantial service with ANZ -

PN2333

this is over eight years service -

PN2334

which meant that outsourcing aside I had a reasonable expectation of job security and promotional opportunity. ANZ was ...(reads)... heavier workloads and greater workplace stress.

PN2335

I also refer to paragraph 8 of Mr Nurse's statement in which he states:

PN2336

I was made redundant by INGA in December 2002. I now work for Promina Group. While this is a comparable position than that which I ...(reads)... associated entitlements, including the long service leave -

PN2337

so he is talking about future -

PN2338

that I would have obtained as a result of the longer tenure of service I had with ANZ.

PN2339

Now, sir - - -

PN2340

THE COMMISSIONER: Are you able to tell me - there was a number of those people whose services were ultimately made redundant apparently by the new organisation. Do you know if they were paid out the entitlements that had accrued?

PN2341

MR MALONEY: They would have been paid - sir, they would have been paid their entitlements in accordance with their accrued time with ANZ and - - -

PN2342

THE COMMISSIONER: Yes.

PN2343

MR MALONEY: We don't dispute that that occurred. Now, sir, the point - now, sir, we have just gone through the witness statements of the 21 former employees of ANZ. We say those witness statements, in terms of the reasons why they say that the employment offered by INGA does not constitute acceptable alternative employment, that material is not subjective material. It quite clearly identifies objective factors such as career progression, promotional opportunities, various benefits - which we are going to expand on in our next document - various concessional benefits, various benefits associated with the share bonuses, the provision or the - no longer receiving annual wage increases.

PN2344

Those - also the fact that there is no transparent - well, there is no classification structure in the INGA Agreement, which we will come to in a moment. There is no transparent system of grading positions. So they clearly identify objective factors, not subjective views. There were some subjective views there and we will acknowledge it. Things like, well, you know, I didn't choose to go to INGA, I chose to stay with ANZ. Well, that is a subjective view, but you can't - people are going to say things like that because employment is pretty important to them.

PN2345

But having said that there is - a number of the witness statements identify objective factors in terms of making their assessment as to their evidence that the offers by INGA do not constitute acceptable, alternative employment. Now we now take you to - if I could just have one second, sir?

PN2346

THE COMMISSIONER: Yes.

PN2347

MR MALONEY: If I can now take you to tab 7 of our case folder - could I just make one more point, sir. I think there is probably - and we just say this as clarification - I think, and it was clear that some of the witness statements we do concede this point, there might have been some confusion as to whether an industrial instrument was in place because when they left ANZ on 30 April there was clearly industrial instruments in place. As I understand it the certification of the INGA agreement, the hearing for that certification took place on 8 January this year and the certification and the decision were issued on 11 January with the agreement having effect from 8 January so there is obviously probably a little bit of an overlap.

PN2348

As I understand it prior to that there was no industrial instrument at INGA - no, actually we are not even quite sure there was any industrial instrument but I will leave that but there was none - yes, so that might have caused some confusion, might have left some employees to think there wasn't one, which probably there wasn't, but now there is. So we just explain that. Sir, if I could just have one second. Now we take you to tab 7. Now this document does do a comparison between the Banking Services ANZ Group Award 1998, the ANZ/FSU Agreement 1998, the Insurance Industry Award and the ING Administration Pty Ltd Certified Agreement 2003.

PN2349

Now the issue was raised or one of the issues that has been raised obviously in these proceedings is the relevant point in time for consideration of whether the offer of employment by INGA was constituted acceptable alternative employment and as we understand Mr McDonald - well, Mr McDonald put to you yesterday a proposition in effect that if the Commission is of a mind to consider the current conditions under the INGA EBA 2003 - that is one that was just certified - it is ANZs submission that those conditions are more favourable than the ANZ conditions and I - sorry, I should use the word, those conditions in the INGA document plus their concessionals, their concessions kit.

PN2350

THE COMMISSIONER: Yes.

PN2351

MR MALONEY: And on that basis we have done - they filed the material so we have done the comparison. So that is now - and I will go through, I don't - I am not going to read it all, I am going to highlight some points, but we say this document we prepared clearly demonstrates that the conditions contained in the INGA Certified Agreement and the Insurance Industry Award 1998 are less favourable than what is contained in the ANZ Award and agreement.

[2.34pm]

PN2352

Now, I did at the outset of the hearing some of the amendments to this document, so I won't go to them any more. But if I just go through the first page of the document, just - and I will just highlight, as you can see, on the first page, under Conditions, part-time employees in the second - in the first column, second box, under the ANZ Group Award there is a minimum of four hours' employment for part-time employees in Melbourne and Sydney CBD workplaces.

PN2353

For all additional hours worked up to 152 per four-week cycle part-time employees receive a 25 per cent loading which is paid in lieu of additional annual leave and sick leave. There are also provisions in the ANZ Agreement regarding part-time employees. Under the Insurance Industry Award it is three consecutive hours, so not a minimum of four; a minimum of three, and similarly, under the ING Administrative Agreements three consecutive - a minimum of three consecutive hours per day. And under the Insurance Industry Award part-timers only receive single time for additional hours worked up to full-time hours, and no additional leave accrual.

PN2354

Now, the next issue is the classification. The Banking Service ANZ Group Award has a classification structure clause - I think it is at clause 16 of the award, from memory; yes, 16. Classification and salary rates structure, so it sets out the minimum rates, and these classifications are also reflected in the ANZ/FSU Agreement. The Insurance Industry Award does have grades based on insurance duties, so if you see that box there, that the classification structure in the ANZ instruments are based on banking financial services duties, then we have classification structures in the Insurance Industry Award, or definitions that are based on insurance duties.

PN2355

There is no classification structure in the INGA Agreement. If we go over the page we come to the issue of remuneration. Now, the ANZ/FSU Agreement 1998 provided for across the board salary increases totalling 10.8 per cent over the life of the agreement for all non-market rated group 5 and 6 employees, and group 4 managers who are not on total employment cross-salary packaging. That can be found at clause 15 of the ANZ Agreement. So, there was a guaranteed across the board increase. Now, the ANZ/FSU Agreement has expired. It still operates, but has expired. It expired on 12 February 2001. And a new agreement has not been renegotiated. We won't go into it, but that .....

PN2356

However, while the agreement has expired, employees at ANZ, that is group 5 and 6 and non-TC managers, have received salary increases of 4 per cent from the first full pay period after 30 June 2001, 4 per cent from the first full pay period after 30 June 2002 and 4 per cent from the first full pay period after 11 July 2003. So, the first thing we say about remuneration as set out in our document is that the agreement, although it has expired, but the agreement did provide for a guaranteed across the board increase, and as we can see in the Banking Services Group Award, it has minimum rates of pay.

PN2357

So, in the second box it has got minimum rates of pay for grades 1 to 4 levels 1 and 3, 27,690 to 68,629. That is the safety net. And that reflects the current safety net. Now, of course, they don't reflect the rates in the enterprise agreement. But we go to the enterprise agreement and in the third column it has as was pointed out yesterday, not only do they receive across the board increase that was provided for the agreement, there is performance-based pay, and that was taken into account, and performance-based pay - I will take you to the clause, but it does operate within ANZ a performance-based pay system with guarantees of pay scale for each grade, level and category, so you have a minimum ..... and maximum - and salaries, and the performance-based pay is provided at clause 10 of the enterprise agreement.

PN2358

There is also a commitment in the enterprise agreement, that is the ANZ Agreement, regarding TEC packaging, including a commitment that no staff member, TEC being total employment cost, packaging will be financially disadvantaged by moving to TEC packaging. So, we have a safety net in the award, we have across the board increases for the groups identified, and we have performance-based pay. If we go to the Insurance Industry Award - I have just been advised it does - I just wanted to make sure - it does - the rates there in the Insurance Industry Award reflect the updated safety net up to the 2003 and there we have the minimum rates of pay for grades 1 to 7, 26,354 to 44,806, no performance pay in the Insurance Industry Award.

PN2359

Now, if we go to the INGA Agreement, and if I could take you to clause 2.7 of the agreement, sir, we gave you a copy with the - - -

PN2360

THE COMMISSIONER: Yes. Sorry, which clause was that?

PN2361

MS MALONEY: 2.7.

PN2362

THE COMMISSIONER: Yes, got that.

PN2363

MS MALONEY: At 2.7 of the agreement - 2.7 of the agreement defines the employment cost, which is a term that is used, or employees' employment costs, which is a term that is used in the INGA Agreement. And it says:

PN2364

At INGA an employee's employment cost is determined by a combination of five factors. Individual employee performance ...(reads)... and the relevant award rate of pay.

PN2365

There is no guaranteed - under the INGA Agreement, certified, there is no guaranteed wage increase, in other words, there is no across the board wage increase, if I could use that term. The increases are based on those factors which include factors that are beyond an employee's control. I mean, I might have - be able to have some degree of control over my performance, but in terms of having control over the employer's - my employer's performance is a bit beyond my control. And if we go to - and I take you to - - -

PN2366

THE COMMISSIONER: Is that the only basis of adjustment to - - -

PN2367

MS MALONEY: I will - they do - if I take you to 3.6, if I go to 3.6 of the agreement before I go to the other - 3.6 sets out the performance and remuneration philosophy, and then it sets out that the principles that are underpinned there - remuneration philosophy, including (d):

PN2368

Those who contribute to INGAs business results will be rewarded.

PN2369

But I also take you to the second last paragraph where it says:

PN2370

Whilst INGA will reward employees in accordance with the above performance and remuneration philosophy, INGA is also committed to ...(reads)... of an employee's employment cost -

PN2371

that is employment cost less the superannuation component -

PN2372

is at all times greater than the relevant minimum salary contained in the award and of course no employee's employment cost will be reduced as a result of the certification of this agreement.

PN2373

So, in other words, what they are saying is that, we will ensure it doesn't go below the minimum which is in the Insurance Industry Award, just the safety net. Now, in terms of your question, as we see from the material that is filed by ANZ, they do operate what is a PRIDE incentive scheme, and you were - well, you weren't taken to the document, but if I just - well, you were taken to the statement - if I can just take you to Mr Payne's statement, at paragraph 21, paragraph 21 states:

PN2374

INGA operates the PRIDE incentive scheme. This scheme applies to all employees and is based on both personal and company performance. ...(reads)... staff member's employment cost.

PN2375

He then refers to annexure C. Now, if I can take you to annexure C of his statement, and this is in - have you got the statement? Tab 25.

PN2376

THE COMMISSIONER: 25, yes.

PN2377

MS MALONEY: Tab 25.

PN2378

THE COMMISSIONER: It is at the back of that, is it?

PN2379

MS MALONEY: Yes. It is annexure C to Mr Payne's statement.

PN2380

THE COMMISSIONER: Yes.

PN2381

MR McDONALD: In the blue folder, are you looking in the blue folder?

PN2382

MS MALONEY: In the blue folder.

PN2383

THE COMMISSIONER: 25 of the blue folder?

PN2384

MS MALONEY: 25 is Mr Payne's statement. It is attached - it isn't 25. Well - - -

PN2385

MS HARVEY: The page is after the table that sets out all the privileges. There was like a table Mr McDonald took you to yesterday, and it is a page after that which is a bit blurred, but it says:

PN2386

2003 performance management and incentive program.

PN2387

THE COMMISSIONER: Yes. I have that, yes.

PN2388

MS MALONEY: Yes, that is it. Okay. Yes, that is the one I am referring to. And if you just - if you go in - sorry, it has got no page numbers, but if you go in to the sixth page in - - -

PN2389

THE COMMISSIONER: Yes.

PN2390

MS MALONEY: - - - you will see what PRIDE stands for. The sixth page in.

PN2391

THE COMMISSIONER: Okay.

PN2392

MS MALONEY: Yes, PRIDE; okay.

PN2393

THE COMMISSIONER: I follow it - - -

PN2394

MS MALONEY: But I wish to take you to - PRIDE, yes, performance results incentives development excellence, yes. But in respect of this document if I could take you to - and the easiest way to find the page is the sixth page from the back.

PN2395

THE COMMISSIONER: And what is on it?

PN2396

MS MALONEY: It is entitled: Key messages.

PN2397

THE COMMISSIONER: Yes.

PN2398

MS MALONEY: Okay. Now, sir, why they do have this, whilst the ING does operate this PRIDE incentive scheme, it does have certain limitations, and this is clear from this part of this PowerPoint presentation. The key messages:

PN2399

Important to focus on profit.

PN2400

Well, I suppose:

PN2401

Profit results determine the incentive payable for both corporate and individual objectives.

PN2402

But the next point I wanted to draw your attention:

PN2403

Important to focus on achieving individual objectives. If profit is less than or equal to 85 per cent -

PN2404

and that is 85 per cent of target, if you go back you will find that they are talking about target -

PN2405

and you meet or exceed all your individual objectives you will receive zero incentives for the corporate objectives and half the incentives for the individual objectives.

PN2406

Then:

PN2407

To qualify for incentives you must meet, exceed at least three out of five objectives.

PN2408

So - and then go - then we go over the page, titled: Eligibility, and the third point:

PN2409

To qualify for the corporate and individual incentives at least three out of the five individual objectives must be achieved.

PN2410

So the point we are saying here, sir, is that whilst they do operate an incentive scheme, PRIDE incentive scheme, the criteria you have to meet in order to get - so if I excelled in all my objectives of an individual but for some reason the company didn't make - you know, made less than 85 per cent of their target, I get less than what I - you know, I don't get the full benefit. So, I am saying whilst there is this additional - also it is in both parts.

PN2411

Whilst there is the - so we say - there is no guaranteed wage increase, and whilst the performance or the pay system in INGA is based on both individual and company requirements, and of course, as we say, that has limitations and that an individual might excel, but it depends on the company exceeding, the individual may have no control over that. So, the only safety net, the only secured safety net, or guaranteed safety net, I should say, is the minimum rates of pay as set out in the Insurance Industry Award.

PN2412

THE COMMISSIONER: And the undertaking that it won't fall below that.

PN2413

MS MALONEY: That is right. But we have to emphasise the fact, sir, that the Insurance Industry Award, which we do have copies here, if it is required, has classification grades that are not applicable to the work covered by INGA, and we can produce the award to show that.

PN2414

THE COMMISSIONER: I must say it was going through my mind earlier and you have confirmed it again now, I would be interested to access the thinking of Commissioner Richards as to how he applied the no disadvantage test, but at any rate, I am just musing out loud.

PN2415

MS MALONEY: Now, sir, while on the issue of remuneration arrangements, we will deal with - we will take - we would like to take you to the last attachment in Mr Payne's statement, annexure D. Now, Mr McDonald explained the footnotes to you on this. So, the first and we just make a few observations, that the first bit about salary increase and the second bit about the bonus, but the first bit, the observation we make that based on this material if you take into account the footnotes where certain people didn't receive the increase or the increase was due to promotion, if you discount those ones, based on this material, in terms of the salary increase, 10 of the 16 employees, because only count up to - 10 of 16 employees received less than 3 per cent increase. And you work that out from just the first, yes, the first three lines.

PN2416

So, ten of 16 employees receive less than 3 per cent. This compares to what we have said earlier, that the group 5 and group 6 of ANZ plus non-TEC received two 4 per cent increases in salary in addition, that is in addition to their performance - in ANZ they do performance appraisals and it is usually October each year, so they get their increase. That is in addition, the 4 per cent is in addition to that, to their performance appraisal. They have been paid that since the first pay period after 30 June 2002, so that is the first point to say. The second point we would make, in respect of the bonuses, which is the second box - - -

PN2417

THE COMMISSIONER: Yes.

PN2418

MS MALONEY: - - - and taking into account the footnotes, 11 of the 20 employees receive less than $2000, so whilst there is nine employees receive more than 2000, 11 receive less than 2000. Now, these are the increases that have been paid to the - and they are based on the 21 former employees - - -

PN2419

THE COMMISSIONER: That have issued the statements.

PN2420

MS MALONEY: The ones with, yes.

PN2421

THE COMMISSIONER: Yes.

PN2422

MS MALONEY: These are the increases that they have been paid since they commenced their employment with INGA. That is since 1 May 2002 up to now, which is a 21-month period. Now, we acknowledge as is stated in the statement that the next pay or the next increase is due in March this year, we acknowledge that. The point we are saying is it is 21 months and in 21 months that is what they have received compared to what they would have received if they continued at ANZ. Now, we may as well finish off dealing on this issue. And that, we can go to the issue of - the other, one other point we make too, sir, is of course that bonuses are not paid as salary increases, so they don't count for superannuation purposes.

PN2423

So, whilst someone gets a bonus, it is not part of your salary, so we just make that point. While we are on remuneration, I may as well finish this before I go to - there is two other things, we may as well finishing on, that is the issue, there is two other issues. The staff concessions issue which has been raised and the issue of the shares. I will come back to the issue of the shares in a minute. No, I will deal with first - firstly; there is an issue about the income protection insurance or the salary continuance benefit which INGA has - applies, and it is contained in the letter of offer, and it has been referred to by Mr McDonald.

PN2424

And it is clear from the evidence and it is not contested that the employees who went across, the former employees, have lost their share allocation, that is the annual allocation of 1000 shares in ANZ. We just make the point that the income protection insurance or the salary continuance - they are the same thing - is not contained in the INGA Enterprise Agreement, so there is no protection by a registered industrial agreement. The provision of the allocation of 1000 shares is contained - so $1000, sorry - $1000 of shares is contained - clause 16 of the EBA.

PN2425

$1000 worth of shares is contained in clause 16 of the ANZ/FSU EBA. So, there was some question whether it was in the industrial agreement; it is. So, I have dealt with that one. The second issue is the concessional - the ANZ staff concessions, and reference is made to this in Mr Payne's statement from para 16, yes, from para 16 to para 19, and he includes in his material, and I think they have taken you to it, if we can find it again, that the summary of the concessions, you know the two tables, which is at the last two pages of their INGA staff privilege pack.

PN2426

No points we make, sir, on this, is that - there is a few points we make on this, that the first point we make about the ANZ staff concessions is that in addition to discounted credit cards, discounted home loans, magazine and newspaper subscriptions, margin lending staff discounts, no bank fees and free bank cheques and travellers' cheques, which were all available at ANZ. There are also other benefits available to ANZ including study assistance which is I should say, sir, also provided for in the enterprise agreement, clause 11, training, that is the ANZ Agreement.

PN2427

Staff also have access to lap-tops, similarly ANZ also has a social club and we make the point lots of workplaces have social clubs and it is not unusual for employees to pay to participate in social clubs, and also have employee assistance programs. So, we make that point, that they do have those benefits. The other point we make on the ING staff privileges pack, and I am referring to their summary of discounts, is - well, firstly they are not in the INGA Agreement.

PN2428

THE COMMISSIONER: No. I will just go and check that.

PN2429

MS MALONEY: But the second point, because they really fall into - well, they fall into four categories, but I suppose the first three categories are products that you can identify with the employer, so investment products, insurance products and lending products, and so the discounts on products and charges we say in our submission are deliberate strategy to encourage staff to the employer to encourage staff to use the employer's product and therefore you have a captive audience, and basically the employer is able to get the employee's business instead of the employee shopping around for prices elsewhere. So, whilst it may be put up as a package - - -

PN2430

THE COMMISSIONER: But the same would apply to people working for the ANZ, and - - -

PN2431

MS MALONEY: Sure.

PN2432

THE COMMISSIONER: - - - getting a home loan.

PN2433

MS MALONEY: Sure. So, we don't see that - well, that is the point. So we don't see it as a big - I mean, we say the point, we would say the same for ANZ, probably say the same for Westpac, and the other banks. It doesn't just go one way. It is not just presentational ..... got these concessions, it is also to - instead of - to discourage employees shopping around to other financial institutions, why not offer things like this so you can have a captive market. So, the employer gains additional benefit. So, yes, but we agree with you, yes. So it you know kind of crosses out.

PN2434

But the other point about the Qantas travel car hire and accommodation which is I think on the second lot, the lifestyle products, we just make the point, sir, that this is letting the employees avail of the corporate rate. This company has corporate rate. It is no cost to the employer. So, we are basically saying that we don't think we can hang a lot on these concessional things, because they go over either way. Now, if we go back to our documents page 3 I just make one observation in terms of higher duties, page 3 of our comparison document, the Banking Services ANZ Group Award 1998 higher duties allowance when relieving in a higher graded position for at least four days in aggregate, and that is what - you are paid at your rate.

PN2435

You know, so your EBA rate, whatever rate you are on, right. In the Insurance Award the higher duties paid at the award minimum salary for the higher graded job, which means that most staff won't qualify for payment in their - if they are on performance or market rate of pay.

PN2436

And there is also a standby allowance there, whereas we make the point that the standby allowance in the Insurance Industry Award only provided for shift work staff. Now the next one is the hours, now we did make - we acknowledged - deals with hours. Now in ANZ the hours of work are 152 hours over a four week cycle, or a 19 day four week cycle. ANZ employees are entitled under the enterprise agreement to a rostered day off. It is acknowledged that - so they get a rostered day off.

[3.03pm]

PN2437

So that is when you went to those statements people kept saying about their rostered day off. In INGA the hours are shorter; it is 145 hours over a four week cycle, right, but there is no rostered day off. But we say the second point is this, the span of ordinary hours in the ANZ award is 7 am to 7 pm, Monday to Friday. And if you work on Saturdays, Sunday and public holidays you are entitled to a minimum of minimum of four hours at double time. The span of hours under the INGA agreement is longer; it is 6 am to 9 pm, Monday to Friday.

PN2438

And the overtime, if you work double time - sorry, on Saturday and Sunday and public holidays, it is a minimum of three hours at double time. We go to the next page and we will go to the issue of leave. Now we do note, and this is set out in Mr Payne's statement, that the paid parental leave provisions in the INGA agreement are more beneficial than what is in the ANZ award, and also the INGA agreement does provide for a five day emergency family leave which doesn't exist in the ANZ, and that is referred to in Mr Payne's statement.

PN2439

We just make the point on leave that obviously under the ANZ award annual leave loading is paid to all staff, except those on TEC where it is paid out, it is calculated, they don't lose it, it is just calculated out and it is put into their package, that is how TEC operates. If we take you to 3.10 of the INGA agreement, right, so just to explain, I will just make sure I have got it clear. In the TEC and ANZ the annual leave - the gross value of the leave loading is determined and based on the individual salary. Under this agreement we note that pay out of annual leave loading staff engaged after certification of the agreement will not be paid leave loading, and we take that from the first paragraph of 3.10 which states:

PN2440

For employees who commenced employment with INGA on or after the date of commencement of this agreement, annual leave loading will be incorporated into the employee's employment cost.

PN2441

So the employee's employment costs is that term we referred to earlier. So it becomes part of their package without there being any actual increase, whereas in ANZ when you work out a manager's TEC package you gross - you value out their leave loading, you get the gross value of their leave loading and you add that to the package. If you go to page 6 of the comparison document, the issue of career breaks, the ANZ/FSU agreement provides for career breaks of six months minimum and five years maximum, whereas the INGA agreement provides for career breaks of one month minimum and 12 months maximum, and if I remember, I think there is also a requirement in INGA, I think there is, I will just check it, but I think there is also a requirement in INGA for you to exhaust other leave before you go on to career break, but can I come back - we will find that clause.

PN2442

Obviously under the ANZ/FSU agreement there is a number of provisions concerning consultative arrangements and a commitment to joint consultation with the FSU. There is a commitment in the ING to consult with the FSU on significant organisational change which lead to redundancies and/or retrenchment. Yes, just on that issue of career break, clause 4.5 of the INGA agreement provides:

PN2443

An employee must take all accrued annual leave and long service leave, if applicable, prior to commencing a career break.

PN2444

If you turn to page 7, sir, Family Friendly - excuse me - we have identified there under the INGA there is a personal emergency of family leave of up to five days that is not provided in ANZ. I have already addressed the share plan that it is contained in the ANZ/FSU agreement. Now the next issue I want to address is the of collective bargaining. The ANZ/FSU agreement provides for collective negotiations with the FSU, and that will provide the base terms and conditions of employment for staff at ANZ.

PN2445

There is also provision under the agreement for AWAs, Australian Workplace Agreements, to be offered to group 4, 5 and 6 staff, but only after consultation and agreement between the bank and FSU. The INGA agreement provides no commitment to collective bargaining but also, and if we could take the Commission to clause 2.8 of the agreement, 2.8 of the agreement is titled, Individual Employment Agreements:

PN2446

INGA may offer an employee on an individual basis terms and conditions of employment under an individual employment agreement. The offer ...(reads)... process to have the matters resolved. With effect from the date of acceptance of the IEA, this agreement will no longer apply to the employee party to the IEA.

PN2447

Now, sir, we acknowledge that the clause is premised on reaching agreement, but so are most of the provisions in the Act governing Australian workplace agreements. And we also acknowledge that there is access to a dispute settlement procedure but obviously the point we are making is this provision compared to the AWA provision in the ANZ/FSU agreement can facilitate people basically contracting out of the enterprise agreement. Now the next page, page 8 of our document, deals with the issue of redundancy, redeployment and retrenchment.

PN2448

Now I don't think I need to explain to you the provisions as they apply in the ANZ/FSU agreement, so you are quite clear of those, we just make these points. In respect to the INGA agreement, there is a process there, it is my job, that we set it out. So we set out - if I can just take you to - we have set out what the process is, and over the page you will see - I think the second page actually, there is - firstly they do - there is a minimum of eight weeks notice, which is more beneficial. Under the ANZ agreement it is six weeks notice.

PN2449

But the second point, which I don't know if it is in the this document, the redeployment period in INGA is confined to four weeks. Yes, paragraph - sorry, clause 3.12 of the INGA document - sorry, agreement. Under the title, Redeployment into Alternate Role with ING, the second paragraph:

PN2450

In case of redundancy, INGA will make all reasonable efforts over a period of up to four weeks to redeploy the employee concerned into alternate role.

PN2451

There is no prescribed limitation upon the redeployment period in the ANZ/FSU agreement. Now, ANZ might have a - has come up with some concept of six weeks, but it is not prescribed in the agreement. Rather it is a creation of ANZ. The severance pay. The severance pay entitlements in ANZ/FSU agreement, the retrenchment severance payment on a sliding - there is a retrenchment severance payment, and that is set out in clause 8.5, which goes up on a sliding scale, and goes up to 79 weeks at 25 years service.

PN2452

If we go over to last column on page 9, the third dot point, under the INGA agreement, you will see the retrenchment severance payment is three weeks, three weeks employment costs per year of service, up to 65 weeks employment costs. So it is really less than what is ANZ. So I have finished with that document. Now, there are just a couple more points that we wish to make. Firstly the issue that has been advanced by - well, by ANZ in their material and particularly the statements that have been filed. And that goes to the issue of career opportunities at ING. And I think that is referred to in Mr Payne's statement, but I can address it.

PN2453

Particularly he addresses the issue of career opportunities at ING in paragraph 7, 8, 9 and 10 of his statement. Now, first thing we say, we say firstly it is clear from the witness statements of the former ANZ employees that there are less career and promotional opportunities in INGA compared to what they had in ANZ. But to further demonstrate this point, we refer to these factors. Firstly - I don't take you to it, but if it is contested, it is contained - tab 9 in our folder contains an extract from the ANZ 2003 Annual Report, and it shows - it is the last page in our folder.

PN2454

And the last page, under 2003, if you go right down to the bottom of the table, it has got, Other Information. It is the 10 years summary of their financial report. And it has got, Other Information, and it has got, Number of Employees Full-time Equivalent. Can you see that, sir?

PN2455

THE COMMISSIONER: Yes, I have that.

PN2456

MS MALONEY: Twenty-three thousand, one hundred and thirty-seven. Now, that is for ANZ in Australia and New Zealand. So - because this report - they used to previously identify them separately, but - now, sir, it is our understanding and we will stand to be corrected, that of that 23,137, of these, approximately 15,500 are employed in Australia. So the - predominantly is in Australia. INGA employs - well, in the statutory declaration of Edward Bradshaw, he said the agreement applies - you know, when it says how many people are going to be covered by the agreement - applies to - or was to be covered by 1811. We are not hanging on this.

PN2457

And Mr Payne's statement, he says approximately 2000. We take it as approximately 2000. We are assuming that is what is meant by approximate. I am not - but it is either 1811 or approximately 2000. And that is what Mr Payne states at paragraph 8 of his statement. Now - so that is the size issue. Now, there is reference made in the material, in the ANZ material, to the ING Group in Australia. And it is to give the impression that is a large organisation providing career opportunities.

PN2458

A couple of points need to be made about this. Firstly, the ING Group is not a homogeneous employer whose employees are covered by the same industrial instruments. The four main businesses that make up the separate group, and they are identified as ING Investment Management. They are identified at paragraph 8 of Mr Payne's statement. ING Bank. ING Australia, which is what we are concerned with here. And QBE Mercantile Mutual. They are four separate employers. They are four separate businesses and four separate employers.

PN2459

Similarly, the ING Group globally have varying regulatory and industrial regimes and employment policies. They are not a single employing entity through which staff can move at will, and it is misleading to suggest otherwise. The other point we say is this. Whilst, as Mr Payne states, and we don't contest it, the ING Group employs approximately 110,000 people globally. Based on Mr Payne's own evidence, at paragraph 8, of that - unless I have done my maths wrong - of that 110,000, only 3840 of them are employed in Australia, but again the four different employers. And of that 3840, 2000 are with INGA.

PN2460

Now, when we come to ANZ, ANZ is a larger and more diverse organisation than INGA. ANZ has a large retail network, corporate banking, credit cards operations, personal banking and wealth management sections. There is ESANDA, which is part of ANZ. INGA is a funds management business, and in the statutory declaration of Mr Bradshaw at 1.3, or section 1.3, he describes it as design and management of superannuation investment and ensuing products. Therefore, what we say is that, by its size, and its larger and more diverse organisational structure, ANZ clearly provides more clear and promotional opportunities than INGA.

PN2461

Now just a further point, I just make. At paragraph 10 of Mr Payne's statement he states:

PN2462

I observe also that a number of people, such as myself, who were not part of the 1 May 2002 transfer have subsequently moved from ANZ to ING and vice versa. The opportunity to move between the two companies in either direction is a continual one.

PN2463

Now, we are not contesting that that is what he is saying. But we just make this point. There is no transfer arrangements between ANZ and INGA. They are separate employers. That is all we say. Separate employers governed by different industrial instruments. Now - and I said I would come back to the - and when Mr McDonald's was taking through you Mr Payne's statement, at paragraph 11 to 15, he talks about changing roles and - sorry - yes, that is what it is called, changing roles. And Mr McDonald described - in fact described as his response, that is Mr Payne's response, two complaints by employees who have been asked to change roles.

PN2464

In particular there is two statements that are referred to in Mr Payne's statement, and at paragraph 14 he refers to the statement of Graham Schofield and Stephen Yiu. Now, I said I would come back to those two. Could I just take the Commission to those two statements at ANZ7. The first one, Graham Schofield.

PN2465

THE COMMISSIONER: Yes.

PN2466

MS MALONEY: Yes, Mr Schofield, and I think I have referred to it, but I just want to make this point. When we go back to paragraph 6 when I was just presenting the evidence as to why they believe it wasn't - didn't constitute acceptable alternate employment, Mr Schofield, paragraph 6, at the bottom says:

PN2467

As a result -

PN2468

the last dot point -

PN2469

as most of the work I was doing has been outsourced to IBM GSA, I have been left with little technical work and unclear responsibilities. As the result, the position is less interesting, less challenging and less satisfying.

PN2470

And up the top of the page he talks about the role, is supposed to be less technical. So we are talking about the - the complaint isn't the change, the complaints is the less responsibility and the less skills. And similarly, with the statement of Mr Yiu at paragraph 5, and paragraph 6, talks about:

PN2471

...left with little technical work and unclear responsibilities. It is less interesting, less challenging and less satisfying.

PN2472

It is not a complaint about the change. I will have something else - but it is not the issue of - that the - it shows that - the issue is not the change that has caused concern. The issue that has caused concern is that as a result of the change introduced, they have been placed in lower skilled positions. Now, that is clearly objective evidence. It is not subjective. It is clearly objective evidence in this matter.

PN2473

THE COMMISSIONER: Perhaps just while you are sorting through your papers there, we might just take a five minute break.

PN2474

MS MALONEY: Sure, thanks.

SHORT ADJOURNMENT [3.27pm]

RESUMED [3.38pm]

PN2475

MS MALONEY: So, sir, where we got up to then was just addressing this issue that was in Mr Payne's statement about changing roles, in particular to the statements of Graham Schofield and Stephen Yiu. But while on that issue about change, one of the propositions that was put - that has been put in the material by Mr Kelly and put by Mr McDonald is a proposition that, you know, the world does not stand still; that is, that if the joint venture had not gone forward - that is the joint venture between ANZ and ING - it is quite likely that there would be other changes affecting ANZ Investment employees. And, therefore, you know, the concerns about change is - there is always changes.

PN2476

Well, the point we say is that we are talking about former ANZ employees who have worked in the finance sector, the banking and finance sector. They along with other workers work in an industry that is subject to continual change, continual structural and organisation change, and they don't expect the world to stand still. Whether they were still in ANZ or not, that is not a feature of this industry and, based on your own knowledge, you would know that is not a feature of this industry.

PN2477

So the issue here, as we see it, is not the issue about the fact that there is change, it is the issue of what that change led to. And in the case of Mr Schofield and Mr Yiu it led to positions - them being placed in positions that involved lower levels of skills and responsibility, and on any objective basis that is a factor which we considered in determining whether the offers of employment constituted acceptable alternative employment. And just finally in respect to the additional comments - sorry, sir, it is just a bit - I might take my jacket off, if that is all right.

PN2478

THE COMMISSIONER: Of course, yes, by all means.

PN2479

MS MALONEY: Now, just two further points in respect to Mr Payne's statement. He does identify in his statement - and Mr McDonald has taken them to you - at paragraph 6 of his statement, a comparison of certain benefits compared between the INGA agreement. At paragraph 6 he states:

PN2480

The INGA agreement has a number of benefits which are more generous than those provided for in the Banking Services ANZ Group Award and the ANZ/FSU agreement 1998.

PN2481

And he starts to identify it. The first one is the hours and we have already referred to that in our comparison document. The second one goes to pay averaging provisions. If I take the Commission to clause 4.10 of the INGA agreement, 4.10 deals with - is titled:

PN2482

Average pay over reduced working year: where an employee and INGA agree...(reads)... rather than not paying salary when the leave is taken.

PN2483

Now, this is clearly about you work a reduced number of weeks, but you get less pay. There is no, you know - we just want to make quite clear what it is; you will reduce - you work less hours, you get less pay. The additional parental leave and the family emergency leave, we have already referred to. He also refers to the flexible options around superannuation. Now, I take you to clause 2.9 of the agreement, and this refers to superannuation and states in the first paragraph:

PN2484

Except for employees who were recipients of the Heritage ANZ Investment letter of offer on 12 April 2002 ...(reads)... but must be notified to INGA before it will become effective.

PN2485

Now, alternative one is that those former ANZ employees continue to make their - sorry, continue to have INGA make their superannuation contribution, their employee superannuation contributions, to the ANZ Australia Staff Superannuation Scheme. Now, sir, that reflects - that alternative reflects the commitment given by INGA in their letter of 12 April 2002 in which they gave the commitment - or they gave a commitment, I should say, at paragraph 4 of that letter:

PN2486

You will be able to continue your membership of and participation in the ANZ Australia Staff Superannuation Scheme for the time being ...(reads)... in respect of future entitlements.

PN2487

Well, we say - so that clause can be pointed to to reflect that commitment that those former employees can continue in the ANZ scheme. The point we make is that it can hardly be described as a more generous benefit than what is provided in the ANZ award and agreement when you consider the fact that the former ANZ employees would have been able to continue their membership and participation in the ANZ Australia Staff Superannuation Scheme if they had remained employed in ANZ through redeployment. So that is the point we are making there.

PN2488

Similarly, the other point or provision Mr Payne refers to is flexibility for Heritage ANZ employees in relation to redundancy pay, and if I can take you to clause 3.12 of the agreement. Yes, sorry, 3.12 under the heading: Heritage ANZ Investment Employees, it says:

PN2489

Until 30 April 2004 employees who were recipients of the Heritage ANZ Investment's letter of offer ...(reads)... whichever is the most beneficial to the employee.

PN2490

Now, similarly that flexibility was described as a flexibility by Mr Payne. Once again, that also reflects the commitment in the letter of offer in terms of access to the - in terms of the 24 months. But, once again, we say it is difficult to characterise that as more generous when the - and, of course, out of those three options the more generous are the provisions of the ANZ/FSU Agreement 1998 unless, unless in a contracting out arrangement - and if we go back to that clause where they can contract out - unless in a contracting out arrangement they gave us something higher but - all right.

PN2491

So what we say, it is difficult to characterise that as being more generous when the former ANZ employees we are talking about would have been entitled to the more beneficial severance payments in the ANZ/FSU Agreement if they remained in the employ of ANZ and they were subsequently retrenched. The next provision that Mr Payne refers to is salary packaging at clause 3.7 and that provides that an employee:

PN2492

An employee will be remunerated on the basis of the employee's employment cost ...(reads)... in accordance with INGAs flexible packaging policies.

PN2493

We just make the observation there, sir, that those policies aren't specified in the INGA agreement. And before leaving, there was some additional comments that Mr McDonald - additional comments made by Mr Payne in paragraph 27 in respect to seven of the witnesses, or seven of the former - sorry, seven of the 21 former employees who we have submitted witness statements for. Then we just wanted to make the point, and the first one is in respect of Mark Juan. This is clear from their witness statements - I am not going to take you back again, but it is clear from the witness statements and if it is contested I will take you back again, but in his witness statement his role became narrower.

PN2494

In respect to Dola Matar, the issue in - that she expressed in her witness statement, or the concern she raised in her witness statement I should say, is that the offer of employment did not have the same promotion or career opportunities. I have addressed Mr Schofield and Mr Stephen Yiu about the issue of change and how their jobs were narrowed, had changed. In respect of the statement of Margaret Arbuckle the concern she raised was the conditions of employment were less favourable.

PN2495

Now, in respect of Yu Wang, it is my understanding that that while Ms Wang - she resigned after the statement was filed, but the statement that - the additional comment in respect - in relation to Yu Wang by Mr Payne that he is informed that she resigned from ING Australia in mid-January 2004 and transferred internally to a role in QBE Mercantile Mutual and ING Group Company. The role is in Brisbane, and Ms Wang was given continuity of service. The only observation we make there, sir, is that as we said, in terms of the issue of career path or career options, I should say, QBE Mercantile Mutual Limited, while it is an ING Group company, as identified by Mr Payne's statement, is a separate corporate entity to INGA.

PN2496

They have a separate employing entity. They are covered by the Insurance Industry Award and by their own certified agreement, called the QBE Mercantile Mutual Limited Certified Agreement 2000 to 2002. And it has its own agreement covering its own R and R provisions. Now, they might have given - we are not - so they may have given Ms Wang, recognised Ms Wang's continuity of service, but what we are saying, I mean, they might have agree to do that, but we are saying she couldn't have transferred internally. It is not an automatic thing, because they are a separate company.

PN2497

Now, we have said as evidenced by - we said previously by the statements that have been lodged by Mr Errol Kelly, that 50 employees out of the 321 employees have since been retrenched, and we don't dispute they got their entitled pay, right? That is not - we say the fact that some staff were retrenched by INGA so soon after the commencement of the joint venture shows that the roles those staff were transferred to did not constitute reasonable alternate employment, because we say a few months' temporary work is not the same as ongoing employment. Rather, it seemed to be mere corporate expediency to shift the cost of any retrenchments from the bank to the joint venture.

PN2498

We also note from his statement that 57 employees, and I think that this has increased now, because we have at least discovered one more now, 58, have resigned since 1 May 2002, so that is over a third now, it is 108 - is that right, yes, have left the joint venture in over a period of less than two years. Now, in Mr Kelly's statement of 11 February he states at paragraph 8 that he did not recall any incidence of - yes, paragraph 8 - he states - at paragraph 8 of his statement of 11 February 2004, Mr Kelly stated that he did not recall any incidence of representations being made by the FSU or its officers in connection with suitability of roles for former ANZ employees during his period as integration executive, people and culture, for INGA.

PN2499

As you will recall from his statement, Mr Kelly was previously employed by ANZ, he went across to INGA, I think it was 1 May - - -

PN2500

MR McDONALD: That is correct.

PN2501

MS MALONEY: And was employed by INGA as an integration executive, people and culture, and then he left there, he subsequently left there in November, yes, he left there on 15 November 2002 and then became a consultant. So, he was there in the INGA in that capacity as integration executive, people and culture, for a period of 6.5 months; we just make that observation from his own evidence. We also note that according to the questions and answers in the material which is attached to Mr Kelly's statement of 11 February 2004, that is that material that starts on 10 April 2002, and actually we go - sir, if you can just go to that question, Q and A material which is tab 24 annexure B.

PN2502

We just note question 1: What happens now, and it talks about according to that:

PN2503

The integration with the ING and ANZ businesses was to occur in two main phases. Phase 1, business as usual, from 1 May 2002, and phase 2, the major integration phase.

PN2504

And just based on the witness evidence that we have taken you to of the 21 former ANZ employees it would appear from that witness evidence those who - there were some changes that did occur, people had to apply for new roles, went into new roles etcetera, and based on the witness evidence of the former ANZ employees in this case the changes in a number of their - a number of employees' roles started around about December 2002 onwards.

PN2505

So, that would seem to suggest that the commencement of phase 2, if you want to call it phase 2, the integration phase, was around about that time, so it was around about the time after 15 November 2002 when Mr Kelly ceased to be employed by INGA. Now, so we say that - we say based on the evidence of the former 21 ANZ employees that were filed in this case on the examination of the comparison document that we have taken the Commission through and the other material arising from that, we say that the employment offered by INGA involves wages, conditions and benefits that are less favourable than those the employees received in ANZ, that INGA has limited promotional and career prospects for employees in comparison to ANZ.

PN2506

We also say that in respect of the employment guiding principles, which is the document that ANZ issued on March 4, 2002, as we previously stated it contains undertakings concerning the employment of staff who transfer to INGA, but those are undertakings given by ANZ and were unenforceable by the transferred employees. We also make the point, and in his submission yesterday, reference was made to that part of the undertaking that prior service will be recognised by the joint venture - sorry, I retract that.

PN2507

The guiding principles document, the other point we say about the guiding principles document, I will come to the letter of offer in a minute - the guiding principles document asserts that the prior service will be recognised by the joint venture for all service-based entitlements such as annual leave, long service leave, sick leave and redundancy pay, but while we have that claim or assertion in the guiding principles document, the point we make there is those entitlements, that recognition of continuity, is not reflected in any registered industrial agreement. Now, I will come to the offer of employment in a minute.

PN2508

Now, the letter - in terms of the letter of the offer of employment, and we will go, if I can take the Commission to that letter which is attached to Mr Kelly's statement of 5 December, tab 19 - it is not the tab - - -

PN2509

THE COMMISSIONER: No, it is not - it can't be 19.

PN2510

MS MALONEY: Wait a minute, which - 5 December 2003, has the letter of offer from INGA.

PN2511

THE COMMISSIONER: 20 or 21.

PN2512

MS HARVEY: It is 23.

PN2513

MS MALONEY: Sorry, sorry.

PN2514

THE COMMISSIONER: 23, is it?

PN2515

MS MALONEY: 5 December.

PN2516

THE COMMISSIONER: Annexure A, is it?

PN2517

MS MALONEY: Yes. We refer to the letter of offer, and we just make these points in respect of the letter of offer. Now, the letter of offer by INGA dated 12 April 2002 we say is inadequate in a number of respects in that it refers to various terms of employment that are not reflected in any registered industrial instrument and some, we would submit, are inconsistent with the provisions of the INGA Certified Agreement. Now, if you go - - -

PN2518

THE COMMISSIONER: But that agreement wasn't in place at that time.

PN2519

MS MALONEY: No, that is right. No, it is not, that is right. But I will explain this further. If you go to the letter of offer, the second para - okay, the first paragraph:

PN2520

As you are aware from the various announcements made in recent months ING Australia Limited and the Australia New Zealand Banking Group Limited ...(reads)... terms you presently enjoy.

PN2521

This is the bit - the point we wish to draw your attention to:

PN2522

The terms upon which this offer is made are as follows...

PN2523

Then the letter proceeds - I will go to the terms, but the letter proceeds to set out in point form 12 points. Now, the first point is:

PN2524

The Banking Services ANZ Group Award 1998 and the ANZ/FSU Agreement 1998 as of 30 April 2002 will continue to apply to you ...(reads)... agreement is implemented in the joint venture.

PN2525

I have addressed the issue about the new agreement and what award underpins that and the no disadvantage test. But the second point is this, or the second term:

PN2526

Your classification and remuneration arrangements will continue unaltered.

PN2527

Point 2 is a separate term to point 1. The fact of the matter is that is the letter of offer, the fact of the matter is the former ANZ employees' classifications and remuneration arrangements have not continued, as we showed you. There is the witness evidence shows you, and we have gone through the comparison documents, you know, and to comparing the provisions. The former employees who have gone across to INGA don't have a transparent job grading system. There is no - they don't have - there is no classification structure in the INGA Agreement, and the method of remuneration is completely different. We have already put evidence to that to show it. So, that is the first point.

PN2528

THE COMMISSIONER: Except that at this time that agreement wasn't in existence. The INGA Agreement.

PN2529

MS MALONEY: No. That is right. But the point I am trying to say here, whilst point 1 of this offer may contemplate a new workplace agreement, which is fair enough for them to advance now, point 2 is a separate term of the offer. It is not consumed by point 1, because the offer - the last sentence in the second paragraph:

PN2530

The terms upon which this offer is made are as follows -

PN2531

so the first term of the offer is point 1 - - -

[4.07pm]

PN2532

THE COMMISSIONER: Yes.

PN2533

MS MALONEY: - - - which contemplates a new agreement. A separate and distinct term - - -

PN2534

THE COMMISSIONER: No, no, the first point says that the award - - -

PN2535

MS MALONEY: Will apply.

PN2536

THE COMMISSIONER: And the agreement - - -

PN2537

MS MALONEY: The ANZ agreement, yes.

PN2538

THE COMMISSIONER: - - - would apply; will continue to apply.

PN2539

MS MALONEY: Until such time as a new workplace agreement is implemented in the Joint Venture.

PN2540

THE COMMISSIONER: Yes.

PN2541

MS MALONEY: Okay. So in terms of that first point, one, the ANZ award and agreement will continue to apply. And two, it can be argued - you can argue, it is contemplated that it is going to be - it could be replaced by another agreement. That is the first term of the offer. The second term of the offer is that your classification, this employee's classification and remuneration arrangements will continue unaltered. Now, they have to be the classification and remuneration arrangements that applied to this individual at 12 April 2002.

PN2542

THE COMMISSIONER: Yes.

PN2543

MS MALONEY: Which is the ANZ classification and remuneration arrangements.

PN2544

THE COMMISSIONER: Yes.

PN2545

MS MALONEY: That point 2, or term 2, is not consumed by point 1.

PN2546

THE COMMISSIONER: No, I accept that.

PN2547

MS MALONEY: Okay, it is a separate term.

PN2548

THE COMMISSIONER: Well, the award or the agreement has set out other terms and conditions of employment beyond classification and remuneration.

PN2549

MS MALONEY: That is right. But the point I am trying to make is that while it could be argued, and I think this is the proposition - we had argued, that point 1, term 1, could contemplate the implementation of a new workplace agreement. And a new workplace agreement has been put in place, a new certified agreement, which we referred to. And ANZ is arguing that it contains no less favourable conditions - I mean, that is the proposition they are advancing. Right.

PN2550

The point we are making, that there is still, under this contract of - sorry - this offer, sorry - a commitment - that the classification and remuneration arrangements that applied to these former employees of ANZ, but applied to them when they were employed at ANZ, will continue, in addition to whatever might happen over here about a workplace agreement. It is a separate term.

PN2551

THE COMMISSIONER: Well, I don't know that it says that.

PN2552

MS MALONEY: Well, sir, that is my point. This - - -

PN2553

THE COMMISSIONER: It just says, that will continue till such time as a new workplace agreement is implemented.

PN2554

MS MALONEY: That is what I am trying to point - - -

PN2555

THE COMMISSIONER: That could be an agreement that could be better or worse than the arrangements that they transfer under. That will be another question.

PN2556

MS MALONEY: Yes, that is contemplated in point 1. But when this - and I don't have to say it. It says it itself. The last - I draw your attention to the last sentence in the second paragraph:

PN2557

The terms upon which this offer is made are as follows.

PN2558

THE COMMISSIONER: I follow you.

PN2559

MS MALONEY: They are simply separate terms. So whilst term 1 of the offer contemplates a future change, none of the other terms - well, with exceptions - the super. But they are separate points of the offer.

PN2560

THE COMMISSIONER: Yes.

PN2561

MS MALONEY: And don't contemplate the change. point 2, and that is the point I am trying to say. Point 2 does not contemplate a change to the employee's classification or remuneration arrangements.

PN2562

THE COMMISSIONER: At the time that the transfer occurred.

PN2563

MS MALONEY: It doesn't say that, sir. It doesn't say that. The offer is clear. And I will just say - can I say further, we also make the point, this. That they are separate points - then go down to - point 3. I will contrast it with point 3. Point 3:

PN2564

Your duties, hours of work and work location will continue unaltered for the time being. It may become necessary for you to alter your work location as some point in the future. However you will not be required to alter this unreasonably.

PN2565

Now that reflects, you know, the fact that phase 1, business as usual, won't change or something. There was a change to the locations. There was movement, and it wasn't far. We haven't raised that as an issue, but there was a change, all right. So clearly, in point 3, there is a contemplation that there is going to be a change. No change at the moment, but you could change, but if you do change, relocate, it won't - you know, it won't be unreasonable. And it wasn't - I mean, it was around - a couple of streets away. I have forgotten; Pitt Street to whatever street it was. Similarly in point 4:

PN2566

You will be able to continue your membership of participation in the ANZ Australian Staff Superannuation Scheme for the time being. It may be necessary for you to transfer at a later date to another fund in respect of future entitlements.

PN2567

Now we acknowledge that that is reflected, that flexibility, which has been referred to by Mr Payne, is reflected in the INGA agreement.

PN2568

THE COMMISSIONER: Yes.

PN2569

MS MALONEY: Okay. And we would discuss about the salary continuance cover. And point 6, your commencement date, and 7, and 8, deal with accrual of leave and recognition of prior service. There is two issues we are saying, which we are trying to make clear. That each of those points is a term. Some of them contemplate change such as the first one about a new workplace agreement. The third one about location, duties and hours. The fourth one said, super, but in the end they are allowing them to continue. But it contemplates - there might be.

PN2570

The fifth one was the commitment to give you salary continuous cover. The sixth one is the recognition of service. The seventh one, the recognition of accrual of leave entitlements. And the eighth one, you will continue to accrue and have access to annual leave, long service leave - on the same terms as they currently apply. There are two things we say. The first, that they are separate terms of the offer. And the second point, they are not, with the exception of two, they are reflected in any industrial or legislative agreement.

PN2571

The only two is the superannuation - the Australian Staff Scheme, which is reflected in the INGA agreement. We have taken the Commission to that, clause 2.9. The additional special safeguards concerning redeployment severance payments is also - yes, it is also reflected in the INGA agreement. So if some can be reflected in the INGA agreement, the super and the redundancy, it begs the question - or the super and the severance, I should say - it begs the question, why aren't the others reflected in the INGA agreement.

PN2572

If you go to the sick leave clause of the INGA agreement, there is no reference there to these former employees - former ANZ employees, having their previous service recognised for the purpose of sick leave. I f you go to the annual leave clause, there is no recognition that in terms of their entitlements that their previous service be recognised.

PN2573

THE COMMISSIONER: But that doesn't kick in until 2003.

PN2574

MS MALONEY: Sorry?

PN2575

THE COMMISSIONER: That doesn't commence until 2003.

PN2576

MS MALONEY: That is right, sir. But the point I am making is that - - -

PN2577

THE COMMISSIONER: See, the other side argue there has been a transmission of business. And it is on the basis of the transmission of business, that the terms and conditions of the award and the ANZ agreement can apply to these people until such time as it is replaced by another agreement.

PN2578

MS MALONEY: Yes, sir, but this is - - -

PN2579

THE COMMISSIONER: Well, that is what they argue. I mean, I may or may not agree with them, but that is what they put.

PN2580

MS MALONEY: Well, all I am saying is, the letter of offer - what we are saying is that the letter of offer - this is our submission on this part of the case, is an inadequate in a number of respects, because firstly it contains separate terms and conditions. Some of those - terms, I should say, the terms. Some of those terms contemplate change. And others don't. So the clear inference from that is that they are to be constant. If my employer gave me a letter of offer and said, your classification and remuneration arrangements will continued unaltered, I can take form that, that my classification and remunerations will continue. They will be a constant. They are not going to change. There is no contemplation of change. That is the first point we say.

PN2581

The second point we say about the inadequacy of the letter of offer, is that, yes, it is in the letter of offer, and Mr McDonald has referred to it as a contractual obligation. It is a common law contract. We understand that. We also understand the processes of enforcing a common law contract. A bit more difficult than probably enforcing an industrial registered agreement. But the point we make is this. If INGA found fit to reflect two of the terms in a registered industrial agreement, of superannuation flexibility and the severance pay flexibility, it begs the question, well, then why aren't the other terms - there is nothing precluding them - like if I just use an example.

PN2582

I am just trying to make it - I don't - for example, if you go to the sick leave provision, clause 4.2. This is just one example, clause 4.2, Sick Leave, Carer's Leave:

PN2583

Employees shall be granted leave of absence without deduction of pay on account of illness or injury on the basis of the following. First year of employment service, eight ...(reads)... and third and later years of employment service, 12 days.

PN2584

And then it goes on, told to use sick leave for carer's leave:

PN2585

An application for sick leave to be supported by a certificate from a registered medical practitioner.

PN2586

Now, there is nothing precluding - in drafting up that clause, that there is a reference to the fact that former - well, they are called Heritage employees, but the former ANZ employees, or Heritage employees, which were referred to in those other clauses, shall have their accrued services transferred across to ING - sorry, your accrued sick leave balances, is what they refer to - will transfer across, and will be recognised. And actually - and there is nothing to say - they even go further than that. They say, at point 8:

PN2587

You will continue to accrue and have access to annual leave, long service leave, sick leave, and parental leave on the same terms as they currently apply to you.

PN2588

Well, that is not even correct, because as we showed you in the annual leave provision you don't - you won't get - yes, don't get the annual leave loading. So how is that the same term? So there is the two points we are trying to make clear. There are two separate points, but they go to at this part of the submission where we say, the letters of offers of the 12 April 2002, are inadequate, in that they firstly refer to a number of provisions that could have easily be reflected in the registered industrial agreement, and that is demonstrated by the fact that two of them are.

PN2589

But secondly, they are distinct separate terms in the offer, and in at least point 2 of the offer, and - which goes to classification remuneration arrangements, and point 8 of the offer, which goes to:

PN2590

You will continue to accrue and have access to annual leave, long service leave, sick leave, and parental leave on the same terms as they currently apply to you.

PN2591

Those provisions contemplate that there will be no changes, and that people would continue - that they be constant in terms of the conditions that they were on at that time. That is at the time of the 12 April 2002. Now one more point, and Mr McDonald did refer to this and - reference is made in both the ANZ guiding principles and the offer of employment dated 12 to the service based entitlements being guaranteed by ING administration, but in the event of any shortfall in the capacity of ING administration to meet these obligations, at paragraph 12B of the offer, it states:

PN2592

Such liability will be met by ING Australia Limited and in the last resort, jointly and separately by ANZ and ING Australia Holdings Limited.

PN2593

Now, Mr McDonald has put the proposition to you, and it goes either way. We just make this point. That is a significant guarantee, saying it is significant in terms of security of redundancy entitlements. And, you know, during a period obviously where that has been an issue, particularly, you know, in terms of solvent companies. That is one characterisation of it. There is another characterisation of it which at the time was that - the view expressed to the union, that it could generate a concern or a fear that the Joint Venture may not be able to pay its entitlements - pay its obligations. So it can go either way.

PN2594

I can understand how he, Mr McDonald characterised it, but you can understand the other characterisation of it, is that - well, hang on, don't they have the financial resources to fund their liabilities. And of course during the time of when you had companies becoming insolvent over the last 10 years, like HIH, and Ansett, it is a real issue of concern. So we just make the point, that guarantee can be characterised either way. And I think it did generate some issue of concern in respect to the employees.

PN2595

Sir, I am going to start another point. I am just wondering if it might be the appropriate time to - I didn't indicate to Mr McDonald during the five minute break that I probably had about an hour and half at that time. I am about to start another point. I think - - -

PN2596

MR McDONALD: You have now got three hours.

PN2597

MS MALONEY: No, I haven't. He doesn't trust me. He likes to get his clock out.

PN2598

MR McDONALD: After the last half hour, Commissioner, I certainly don't.

PN2599

MS MALONEY: Don't worry, Commissioner, we have had - - -

PN2600

THE COMMISSIONER: How long do you reckon you are going to go? Let us try that.

PN2601

MS MALONEY: Well, I think we probably would finish within another hour or so. And I am just about to start - so that would be - that is what we agreed on. If we start at half past nine - we would see if you were available on Friday, and we start at half past nine, and I think Mr McDonald said to me, if I can guarantee that he could start at eleven. Well, I don't guarantee anything, but I aim to have it finished - - -

PN2602

THE COMMISSIONER: Well, do you want to make it a bit earlier on Friday?

PN2603

MS MALONEY: Well, if that is to avoid Mr McDonald having a go at my time.

PN2604

THE COMMISSIONER: We can make it nine o'clock.

PN2605

MS MALONEY: Fine with us.

PN2606

THE COMMISSIONER: Just to make sure that we have got time.

PN2607

MR McDONALD: Yes, I think that is a very good idea, Commissioner.

PN2608

THE COMMISSIONER: What, are you getting a stitch? All right.

PN2609

MS MALONEY: And it is on that basis. So either we start another point now - - -

PN2610

THE COMMISSIONER: All right then. On that basis we will adjourn these proceedings at this stage and resume at 9.00 am on Friday morning. Adjourn on that basis.

ADJOURNED UNTIL FRIDAY, 27 FEBRUARY 2004 [4.25pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #FSU7 21 EMPLOYEE STATEMENTS PN2058