FEDERAL COURT OF AUSTRALIA

Finance Sector Union of Australia v Commonwealth Bank of Australia

[2004] FCA 898

INDUSTRIAL LAW – alleged breach of enterprise bargaining agreement by retrenchments – construction of agreement – retrenchment of employees not yet redundant – whether breach of agreement – statement of claim struck-out

Workplace Relations Act 1996 (Cth) s 178, s 347, s 356

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 applied

Commonwealth Bank of Australia v Finance Sector Union of Australia (2002) 125 FCR 9 applied

Carrigg v Commonwealth Bank of Australia (2002) 115 IR 266 cited

Finance Sector Union of Australia v Commonwealth Bank of Australia (2001) 111 IR 241 referred to

FINANCE SECTOR UNION OR AUSTRALIA v COMMONWEALTH BANK OF AUSTRALIA

N 1303 OF 2002

CONTI J

30 JULY 2004

SYDNEY

THE COURT ORDERS THAT:

1.         The amended statement of claim of the applicant Union be struck out on the ground that the same does not as presently framed disclose a viable cause of action.

2.         The applicant Union have leave to file and serve a further amended statement of claim within twenty-eight days.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

Nature of the proceedings and the basis of the strike-out application

1                     These proceedings were commenced on 6 December 2002 by the Finance Sector Union of Australia (‘the Union’) against the Commonwealth Bank of Australia (‘the Bank’) for the imposition of a penalty on the Bank, pursuant to s 178 of the Workplace Relations Act 1996 (Cth) as then in force (‘the Act’), for breach of clause 18 of the Commonwealth Bank of Australia Retail Banking Services Enterprise Bargaining Agreement 2002 (‘EBA’), and for a further order that pursuant to s 356 of the Act (also as then in force), any penalty imposed by the Court be paid to the Union.  The proceedings concern the Bank’s conduct in relation to each of three former employees of the Bank, and it would appear that the proceedings are in the nature of a test case.  The Union and the Bank are the parties to the EBA.  The EBA was certified by the Australian Industrial Relations Commission pursuant to s 170LT of the Act (as then in force), and came into force on 6 August 2002, and has since remained in force.  It was preceded by the Commonwealth Bank of Australia Customer Service Enterprise Bargaining Agreement 2000.

2                     Pursuant to clause 5 of the EBA, the Bank is bound to comply with the provisions of the EBA in respect of those of its employees engaged in retail banking services whose employment is subject to the Commonwealth Bank of Australia Employees Award 1999 (‘the Award’).  Pursuant to clause 7 of the EBA, that instrument is required to be read and interpreted wholly in conjunction with the Award, provided that where there is inconsistency between the EBA and the Award, the EBA is stipulated to prevail to the extent of the inconsistency.

3                     Clause 18 of the EBA addresses the subjects of redundancy, redeployment and retrenchment.  The Union pleads in the present proceedings that the Bank terminated the employment of three particular former employees, in breach of clause 18 of the EBA, whose circumstances have been selected by the Union for the purposes of the present test case.  The breaches of the EBA are said by the Union to have been occasioned by reason of those terminations having occurred ‘… in circumstances where the [Bank] had not determined to make their position redundant and where the [Bank] still required the work done by the Employees to be performed’.  Clause 18 of the EBA is later extracted to the extent conceivably bearing upon the issues raised by the pleadings. 

4                     Alternatively, given the positions of each of those three employees of the Bank were made redundant within the purview of clause 18 of the EBA, the Union pleads that the Bank breached subclause 18.4 of the EBA, ‘… by failing in each case to make reasonable efforts to redeploy each of them before their respective retrenchments by the Bank took place’. 

5                     The Bank contends that the Union’s claims, as formulated by the amended statement of claim, thus misconceive the meaning and operation of clause 18 of the EBA, and on the opening day of the final hearing of the proceedings, the Bank made belated application to strike out the Union’s amended statement of claim filed on 14 April 2003 (‘S/C’).  A formal notice of motion for that purpose was subsequently filed by the Bank in the Registry.  That strike-out application had not apparently been foreshadowed by the Bank, prior to the commencement of the final hearing of the proceedings.  The Bank did not press for the strike-out application to be determined, at least until after the close of cross-examination of the Union’s witnesses, partly because no formal prior notice of the application had been given to the Union, and in any event because those witnesses had already travelled from country locations for the purpose of cross-examination on their respective affidavits.  The Bank estimated that if the strike-out application was to be determined in its favour, the cost of not less than three full days’ hearing would be thereby avoided by both parties, in the light of the nature and extent of the evidence the Bank proposed to adduce on affidavit, being legal costs that by reason of s 347 of Schedule 1B thereto and its precursor, neither party could realistically expect to recoup from the other from the final determination of the present dispute.  At the time submissions on the strike-out application later commenced, all that remained of evidence yet to be presented in the Union’s case in chief was described by the Union’s counsel as the tender of ‘… a number of documents… at an appropriate time’, being documents not then asserted to bear upon the legal issues of interpretation of the EBA raised by the Union’s strike-out application.  In the course of the hearing of the strike-out application, certain documents, later identified in these reasons, were nevertheless tendered in evidence by the Union, upon the basis that they bore upon the issues of construction of the EBA. 

6                     The basis for the Bank’s strike-out application, as described in its notice of motion filed for that purpose, was that no reasonable cause of action on the part of the Union was disclosed thereby, for the reason that:

‘… it is not a breach of clause 18 of the [EBA] for the [Bank] to treat the employees in question as if they were in a redundancy position if in fact they were not.’

The consequential contention of the Bank, upon the footing of what appears from the amended statement of claim, was to the effect that it was common ground that the Bank had not made redundant the three employees the subject of the Union’s amended statement of claim, prior to (or perhaps simultaneously with) their respective retrenchments.

7                     The Bank acknowledged that the principles enunciated in General Steel Industries Inc v Commissioner for Railways (NSW) (1964)112 CLR 125 at 129 (Barwick CJ sitting alone), namely that ‘… the case of the plaintiff is so clearly untenable that it cannot possibly succeed’, governed its strike-out application.

The Bank’s contentions in detail on the strike-out application

8                     There was no suggestion on the part of the Bank otherwise than that the Bank has been, and continues to be, bound to comply with the terms and conditions of the EBA.  The Bank’s contention was that a ‘redundancy situation’ had not been pleaded by the Union to have been put in place in relation to any of the three former employees of the Union the subject of the amended statement of claim, prior to the termination of their employment, with the consequence that no breach of obligation arising under the EBA could be attributable to the Bank upon the footing of the circumstances pleaded by the Union to constitute breach of the EBA.  Or as put otherwise by the Bank, there is no obligation upon the Bank relevantly arising under the EBA which crystallises otherwise than on the occurrence of a redundancy situation, yet the assumption or predication of the amended statement of claim, indeed rightly, is that there was no redundancy situation in operation at any material time in relation to each of those three employees. 

9                     In explanation and elaboration upon that contention, senior counsel for the Bank relied upon what was contended to be the precise true scope of operation of clause 18 of the EBA.  The context is provided by the opening subclause 18.1.1 reading as follows:

‘The following provisions have effect in situations where the Bank is considering or implementing change that impacts upon working arrangements and could give rise to potential redundancy and/or deployment situations.’

The reference to ‘potential redundancy’, and the use of the word ‘could’, rather than ‘would’, may be observed.  They set the context for what later follows in the operative provisions of clause 18 of the EBA as to actual redundancy and deployment situations, and their implications.  I should additionally include reference, in relation to the objectives of clause 18, to the next following subclause 18.1.2 thereof:

‘Key objectives of this clause are to enhance, encourage and maximise the redeployment of employees whose positions have become redundant and to ensure redeployment of employees whose positions have become redundant and to ensure that compulsory retrenchment should only occur as a last resort.’

The expression ‘positions have become redundant’, twice used above, may be further observed.  Understandably the Bank places reliance upon the same. 

10                  Reference was next made by the Bank to the defined expressions set out in clause 18.2 of the EBA, and in particular the following:

‘18.2.6     “Redundancy” means a position redundancy where work (or a major portion of it):

                (a)   is no longer required to be performed; or

                (b)   is to be performed at a new location which requires a change in residence of the employee concerned;

                as a result of re-organisation; changed business practice; technological change; downturn in business; a decision to reduce the number of employees; or a general reduction in classification levels or positions.

18.2.7      “Retrenchment” means the termination of employment of an employee as the result of redundancy.’

11                  The notion of ‘position redundancy’ in clause 18.2 of the EBA was describedin the context of the earlier framed Commonwealth Bank of Australia Officers Award 1990, by a Full Court (Gray, North and Gyles JJ) in Commonwealth Bank of Australia v Finance Sector Union of Australia and Another [2002] 125 FCR 9 at 28, as follows:

‘One is that redundancy within cl 42 means a position redundancy, not an employee redundancy.  The usual meaning of “redundancy” in an employment context is “denoting or relating to an employee who is or becomes superfluous to the needs of the employer” (Macquarie Dictionary, 3^rd ed).  There are numerous indications, both within cl 42 and in other parts of the Award, which indicate that an officer of the Bank is appointed to an actual nominated position with nominated duties.  The primary application of cl 42 is where, as a result of reorganisation, the nominated position becomes redundant and is abolished.  That was the case in Hawkins.  There is no finding that that occurred here, and the evidence indicates to the contrary.  We accept that there may be circumstances where leaving the nominal position in place, but substantially altering the duties, could amount to making a position redundant.  To hold otherwise would be to prefer form over substance.  There is no room for application of that principle where the duties remain, in substance, the same.  Indeed, it follows from Hawkins (No 2) that the formal abolition of a position will not amount to a position redundancy unless the change in duties is substantial enough to amount to a change of position.  The test for position redundancy which cl 42 chooses is that the work to be done by the holder of the position is no longer required to be done, and it is common ground that that means no longer required by the Bank.  We do not agree that (leaving aside any question of sham) the requirement by the Bank can be second-guessed.  “Require” is used in the sense of demanded or called upon or enjoined.  The agreed facts make it clear that the bank did continue to require that the work be performed. 

The reference above to Hawkins (No 2) is Hawkins v Commonwealth Bank of Australia (No 2) (1996) 70 IR 213, a decision ofa Full Federal Court.  No good reason was provided by the Union as to why the Full Court’s description of position redundancy in that context should not have the same meaning for the purpose of operation of clause 18.2 of the present EBA, as will be evident from the terms of the Union’s amended statement of claim later reproduced.  The notion of a position redundancy, and its implications, are critical to the resolution of the issues of interpretation of the EBA the subject of the present strike-out application made by the Bank. 

12                  Antecedent steps required to be taken by the Bank, in advance of any redundancy or deployment of employees having effect, comprise the Bank’s review of ‘a work area, practice or function that could give rise to redundancy or redeployment situations’, pursuant to subclause 18.3.1 of the EBA, and also the consultative processes with the Union stipulated by subclause 18.3.2 of the EBA, which processes require the provision by the Bank to the Union of the following information:

‘(i)       details of the new employee structure applicable to the area and an explanation of the impact;

(ii)       details of the positions to be abolished including position numbers where available; and

(iii)      details of the proposed date of implementation of the new structure.’

The reference above to ‘positions to be abolished’ and ‘position numbers’ may be observed.

13                  The Bank next drew attention to the subclauses of clause 18.4 of the EBA headed ‘Redeployment’, and initially to the opening expression in subclause 18.4.1, namely ‘[w]here redundancy situations occur the Bank will make reasonable efforts to redeploy the employees concerned…’.  That ‘reasonable efforts’ obligation imposed thereby upon the Bank was submitted by the Bank to be clearly conditioned upon ‘redundancy situations’ having first occurred, being the element critical to the Union’s case for breach of the EBA (as contended by the Bank).  Moreover it was pointed out by the Bank that the subclause 18.4.1 notion of ‘redundancy situations’ is controlled by the preceding subclause 18.2.6 definition of ‘redundancy’, which notion was said to be in turn reflected in the expression ‘declared redundant’ in subclauses 18.4.2 and 18.4.3.  The full text of subclauses 18.4.1 to 18.4.4 set out below was submitted by the Bank to fully reflect those meanings, the opening words to subclause 18.4.1 governing contextually the operation of the ensuing subclauses of clause 18.4:

‘18.4    Redeployment

18.4.1    Where redundancy situations occur, the Bank will make reasonable efforts to redeploy the employees concerned.  These efforts will be assisted by taking maximum advantage of normal employee attrition and curtailing recruitment wherever practicable.

18.4.2    All due consideration will be given by the Bank to filling vacant positions with suitably qualified employees whose current positions have been declared redundant.

18.4.3    With the exception of clause 18.4.9(ii) and clause 18.4.10 an employee whose position is declared redundant will not be entitled to the provisions in sub-clauses 18.7, 18.8, 18.9, 18.10, 18.11 & 18.12 of this clause if he/she declines an offer of a comparable position or a non comparable position.

18.4.4    From the date the position becomes redundant the Bank will:

(i)                 redeploy the employee to comparable employment; or

(ii)               redeploy the employee to non comparable employment for up to eight months; or

(iii)             retrench the employee.’

Emphasis was placed by the Bank in particular upon the opening words to subclause 18.4.1 above, namely ‘[w]here redundancy situations occur…’, the further words ‘whose current positions have been declared redundant’ in subclause 18.4.2 above, the yet further words ‘whose position is declared redundant’ in subclause 18.4.3 above, and the words ‘the position becomes redundant’ in subclause 18.4.4 above.  The remaining subclauses of clause 18.4, which further relate to deployment, need not be reproduced for present purposes.

14                  Thereafter followed of course clauses 18.5 to 18.11 of the EBA, bearing the following headings respectively:

18.5          Selection For Retrenchment

18.6          Reasonable Commuting Distance

18.7          Notice

18.8          Severance Payments

18.9          Other Entitlements

18.10      Additional Benefits

18.11      Leave and Expenses To Seek Employment

18.12      Moving Household.

Each were described by the Bank as involving stipulations having an operation in the context of a redundancy position having first crystallised.  That description is I think correct, particularly in the light of the subclauses of clause 18.5 reading as follows, and their contextual significance implicitly evident from the preceding clause 18.4 which I have already described:

‘18.5.1     Where an employee cannot be redeployed, he or she will be retrenched.

18.5.2      In a redundancy situation affecting a number of employees engaged in the same work at or about the same classification level and in the same work area, the Bank may call for applicants for retrenchment and determine which employees are to be retrenched.

18.5.3      Nothing in this clause will prevent the Bank from inviting an employee to apply for retrenchment or an employee applying to be retrenched.

18.5.4      The Bank’s right to select employees for retrenchment will be final.’

15                  The Bank submitted that since the material facts pleaded by the Union did not purport to aver that a redundancy situation had occurred at the instance of the Bank in relation to each of the three employees the subject of the present proceedings, there could not rightly be advanced the averments of breach on the part of the Bank of clause 18 of the EBA, on account of the Bank having decided to retrench employees by way of termination of their employment, or to make payments that would have otherwise become due and payable in a redundancy situation.  Put another way, if no redundancy situation had occurred in relation to any of the three former employees of the Bank the subject of the amended statement of claim, the Bank’s submissions continued, what the Bank was said to have put in place for those former employees could not have amounted to contravention of clause 18 of the EBA on the Bank’s part, since any such contravention must be predicated upon the circumstance contemplated in subclause 18.1.1 (extracted in [9] above) having crystallised, being the circumstance constituting or involving a redundancy situation created by the Bank.  The crystallisation of that circumstance in relation to each of three former employees the subject of the amended statement of claim was contended by the Bank not to have been properly or appropriately pleaded.  If any breach of obligation on the Bank’s part of the EBA did occur in relation to the subject three former employees, the Bank further submitted, it could only have constituted breach of the provisions of clause 15 of the EBA, and/or of the relevant industrial award, and/or of the provisions of the Act relating to unfair dismissal comprising ss 170CE et seq of the Act.  There could not have been also or additionally involved breach on the Bank’s part of clause 18 of the EBA, which clause 18, by way of critical distinction, so the Bank contended, governs inter alia the subject of redundancy situations within the Bank. 

16                  Thus for comparison with clause 18, it was pointed out by the Bank that clause 15 of the EBA, headed ‘Staffing”, reads as follows (the reference to FSU is of course to the Union):

‘15.1    The Bank and the FSU recognise that staffing levels which reflect customer needs and usage patterns as well as business levels are necessary to the achievement of the Bank’s business needs.

15.2     The Bank and FSU recognise the need for regular review and prompt adjustment to staffing arrangements to reflect the rapidly changing nature of the competitive environment.

15.3     When determining staffing levels for a workplace consistent with clause 15.1, the Bank will take into account all relevant local factors including but not limited to staffing experience, demographics and business opportunities.  Managers will discuss staffing changes with their staff.

15.4     Where vacancies or absences occur (other than for RDO’s), the Bank will provide the most appropriate relief having regard to the nature of the role and its business needs.

15.5     The Bank will take all reasonable steps consistent with this clause to fill vacant positions promptly, consistent with the achievement of the Bank’s business needs.

15.6     The Bank will continue to consult with the FSU on staffing issues.’

17                  What was asserted by the Bank to have thus far occurred since the privatisation of the Bank, relevantly to the context of the present proceedings, is that certain of the Bank’s former employees have taken court proceedings against the Bank for unfair dismissal, being proceedings which have been apparently compromised or settled on terms mutually agreed, in circumstances however where the operation of clause 18 of the EBA did not arise by way of occurrence of redundancy situations falling within the scope of subclause 18.5.2 earlier extracted in these reasons. 

18                  The misconception submitted by the Bank to be inherent in the Union’s case, as presently pleaded, was asserted by the Bank to be implicitly demonstrated in the averments of the Union’s amended statement of claim, appearing in particular in par 22 thereof, and now set out below (the reference to ‘Respondent’ being of course to the Bank):

’22.      In the circumstances termination of employment by the Respondent of each of the Employees was a breach of clause 18 of the EBA.

PARTICULARS

            (a)        In the case of each of the Employees the Respondent breached clause 18 of the EBA by purporting to terminate their employment on the grounds of redundancy other than in accordance with clause 18 of the EBA, namely by terminating their employment in circumstances where the Respondent had not determined to make their position redundant and where the Respondent still required the work done by the Employees to be performed;

            (b)        In the alternative, if the positions of the Employees were redundant within the meaning of clause 18 of the EBA, then the Respondent breached clause 18.4 of the EBA in respect of each of the Employees by failing in each case to make reasonable efforts to redeploy the Employee before retrenching the Employee.’

The reference above in par 22 of the amended statement of claim to ‘Employees’ is of course to the three former employees of the Bank the subject of these proceedings, their circumstances having been chosen by the Union by way of illustration for the purpose of this evident test case. 

19                  As appears from par (a) of the above Particulars, the Union has pleaded the facts that ‘… the Respondent [Bank] had not determined to make their position redundant and… the Respondent [Bank] still required the work done by the Employees to be performed’.  In other words, the pre-condition of subclause 18.1.1 of the EBA, extracted in [9] above, was implicitly said by the Bank to have not yet crystallised, albeit that subpar (a) of the above extracted particulars to par 22 of the Union’s amended statement of claim speaks of the Bank ‘… purporting, to terminate their employment on the grounds of redundancy, other than in accordance with clause 18 of the EBA...’.  Moreover as appears from par (b) of the above Particulars, although the purported predication or hypothesis thereof is ‘[i]n the alternative, if the positions of the Employees were redundant within the meaning of clause 18 of the EBA…’, nevertheless, so the Bank further submitted, par (b) does not aver any facts or circumstances demonstrative of any basis for imputing the existence of redundancy in relation to ‘the positions of the Employees’.  It was at least implicitly part of the Bank’s complaint that it was inappropriate for the Union merely to plead what would purportedly constitute an alternative cause of action upon the footing of redundancy, without identifying any material facts or circumstances which would have arguably constituted the alternative of redundancy of any alleged redundancy of any one or more of the three former employees of the Bank the subject of the present test case. 

20                  The Union did not consent to my entering upon decision-making in respect of the Bank’s belated strike-out application, in the context of what was of course scheduled to be the final hearing of the proceedings.  I took the view that I should at least receive for consideration the respective submissions of the parties on the Bank’s strike-out application, given its radical implications.  At the next resumed hearing of the proceedings, the Union presented comprehensive written submissions in purported response to the Bank’s strike-out application, upon which the Union orally addressed at some length.  Moreover at a yet further subsequent hearing of the proceedings, the Union made additional submissions, both orally and in writing, upon the Bank’s strike-out application, to which the Bank made submissions in reply.  I adopted the approach that I should resolve the demurrer issue, in the context of potentially protracted litigation such as the present, particularly where no adverse orders as to payment of the costs of one litigating party by the other would be likely to be authorised by the Act (see again s 347 of Schedule 1B thereto and its precursor).  It was on balance in the interests of justice to both parties that the Bank’s strike-out application should be resolved at this relatively early stage of the final hearing, that is, after the Union had completed the presentation of its evidence, so as to obviate the proceedings continuing further at length in circumstances where the pleadings basis therefore may be unsoundly conceived on the Union’s part in the first place. 

The Union’s submissions on the Bank’s strike-out application and some initial observations thereon

21                  The Union’s initial set of written submissions, upon which counsel for the Union addressed, commenced with reference to the description of the notion of ‘a redundancy situation’ contained in an earlier Australian workplace agreement entered into on 13 July 2000 between the Bank and one of its suburban branch managers, which was the subject of consideration by this Court in Carrigg v Commonwealth Bank of Australia (2002) 115 IR 266 (Branson J).  That description was in the following terms:

‘A redundancy situation refers to a situation where the Bank no longer requires to have a job or a task performed and having reviewed all other alternatives declares you redundant.’

The expression redundancy situations appears in subclause 18.4.1 already extracted in [13] above.

22                  The Union summarised the implications of the averments of par 22 of the Union’s amended statement of claim (extracted in [18] above) in the following terms:

(i)         because the position held by each of the three employees identified in the S/C was not in fact redundant within the meaning of the EBA, the Bank breached or failed to observe clause 18 of the EBA by terminating their employment by way of retrenching them (referring thereby to subpar 22(a) of the amended statement of claim); or

(ii)        the Bank breached clause 18.4 of the EBA, and in particular subclause 18.4.1 thereof, by failing to make reasonable efforts to redeploy each employee before so terminating their employment (referring thereby to subpar 22(b) thereof), the implicit predication of that alternative submission being that the position held by each of those employees was redundant.

23                  The Union described pars 14 to 18 of its amended statement of claim as pleading to the effect that the Bank ‘advised of an intention to reduce the numbers of employees employed, and [the Bank] then terminated the employment of employees on the purported ground of redundancy, including the 3 employees…’.  Upon that footing, the Union contended that ‘… there can be no doubt that the provisions of clause 18 of the [EBA] had “effect” in those circumstances’, referring thereby in particular to clause 18.1.1 of the EBA (extracted in [9] above). 

24                  That contention on the Union’s part did not however come to issue adequately with the thrust of the Bank’s demurrer, in the light of the meaning and stipulated scope of operation of clause 18 of the EBA, which of course I have already discussed.  That scope of operation of clause 18 relates to circumstances of redundancy in the nature of so-called ‘position redundancy’ (subclause 18.2.6) which has been ‘declared’ by the Bank (subclause 18.4.3).  It is perhaps conceivable that a redundancy of that kind may be in substance so ‘declared’ by conduct, or otherwise informally, by implication attributable to the reality of conduct by the Bank, but in any such circumstance, facts supposedly within that description would need to be re-pleaded by the Union with care and precision a task not yet in my opinion undertaken.

25                  Thereafter the Union’s initial submissions, though lengthy and complex in content, exemplified a measure of difficulty on the Union’s part to come to issue with the substance of the Bank’s pleading complaints.  I should add that certain documentary material was tendered by the Union in support of those submissions, none of which appear to have been referred to, much less particularised, in the amended statement of claim, including in particular the following exhibits:

(i)         Circular to ‘The Manager All Branches’ dated 21 December 1992;

(ii)        Guidelines for Processing Workplace Reviews and the Management of Redundant Staff dated May 1993; and

(iii)       Letter to the Union dated 23 December 1993.

In any event, the Court was not referred to specific passages in any of that material, but was merely invited to read the same in order to gain ‘… assistance… when seeking to understand the meaning of provisions that were predecessors to the certified agreement provisions’, without however specifically identifying in that context any such provisions. 

26                  The Union’s initial submissions also involved a number of contentions as to the meaning and operation of the EBA, but without coming directly to issue upon the essence of the Bank’s complaints.  Moreover various so-called ‘background factual matters’ of alleged relevance were described in detail in those submissions, partly by reference to the context in which the termination of employment of the three Bank employees the subject of the proceedings was said by the Union to have occurred.  The Union also cited at some length the findings of this Court in Finance Sector Union of Australia v Commonwealth Bank of Australia (2001) 111 IR 241 (Moore J), relating to the series of steps the Bank was required to follow in circumstances ‘where a redundancy and/or deployment situation might arise, and also when it does arise’.  It was submitted by the Union that those findings were not criticised in the subsequent reasons for decision on appeal of the Full Court which reversed the finding of the primary judge (identified in [11] above).  All that may be true, but does not bear upon the essence of the pleading complaints raised by the Bank. 

27                  The Union next addressed the implications of subclauses 18.5.2 to 18.5.4 of the EBA.  After citing the reference made by Moore J to clause 18.5.2 of the EBA in his Honour’s reasons for decision at first instance in that earlier litigation, the Union submitted that those clauses contained an exception limited to a particular factual situation arising only where:

‘(a)      there is a ‘redundancy situation ‘ (ie there are position redundancies) which affect “a number of employees” (which was said to mean, as a minimum 2 employees’ positions abolished); and

(b)       the employees holding the positions affected are engaged doing the same work; and

(c)        the employees holding the positions affected are at or about the same classification level; and

(d)       the employees holding the positions affected are in the same work area; and

(e)        the Bank has called for applicants for retrenchment.’

28                  The Union submitted in that context that the ability of the Bank to ‘determine which employees are to be retrenched’, pursuant to clause 18.5.2, is to be read as a right to determine employees from a pool made up of the applicants for voluntary retrenchment and the employees(s) whose position(s) was/were abolished’, and not ‘… as giving a wider right to select from any of those doing the same work at the same classification level in the same work area’.

29                  Those submissions did not however come to issue, or at least adequately, with the Bank’s pleading complaints. 

The conclusion of the Court

30                  In my opinion, the S/C as presently framed by the Union, does not plead, or plead adequately, contravention or breach of such material obligations or conditions on the Bank’s part of the material elements of clause 18 of the EBA, such as are necessary to sustain a viable cause of action.  What is required is an identification with precision of the elements of clause 18 sought to be relied upon by the Union, and of material facts and circumstances asserted to satisfy those requisite elements. 

31                  In reaching that conclusion, I have accepted as soundly conceived the Bank’s interpretation of clause 18 of the EBA to the extent material to the Union’s present complaint.  In my opinion, clause 18 does not operate to prohibit the Bank from retrenching an employee whose position of employment has not been abolished.  Aside from the absence of an explicit prohibition or restriction of the kind which would otherwise be expected to be evident within the scope of the EBA, and clause 18 in particular, I observe that subclause 18.4.2 speaks of ‘current positions’, rather than an expression or description importing the notion of an abolished or discontinued position of employment.  It follows that in the case of any retrenchment of an employee of the Bank, whose position of employment has not been abolished without that employee continuing otherwise in the Bank’s employ in some other position, that employee must seek recourse to the general law of unfair dismissal, which apparently the three employees of the Bank specifically the subject of the present proceedings have already individually invoked (that is of course unless another provision of the EBA can be invoked other than that presently pleaded).

32                  I would therefore grant the Bank’s application to strike out the Union’s amended statement of claim.  I am of the view however that there should be liberty to the Union to replead within twenty-eight days, despite the Bank’s submission to the contrary.  The Bank’s demurrer is in substance directed to subpar 22(a) of the amended statement of claim.  The averment of subpar 22(b) is presently defective merely because it propounds the alternative of redundancy, without pleading material facts and circumstances necessary to demonstrate the crystallisation of redundancy in relation to any one or more of the three employees the subject of the proceedings.  It may well be the case that no such facts or circumstances are truly available to be pleaded, but the Union should be given the opportunity so to do. 

Associate:

Dated:              30 July 2004