Hawkins v Commonwealth Bank of Australia [1996] IRCA 556

DECISION NO:556/96

CATCHWORDS

INDUSTRIAL LAW - REDUNDANCY - construction of redundancy agreement - whether employee in the circumstances had a right to severance pay - whether there was a position redundancy - whether "a major portion of" the work of the position formerly held by the employee was to be performed by the occupant of the position to which the employee was appointed - whether the agreement conferred only on the employer a right to terminate the employment of a redeployed employee who found the alternative employment unsuitable - whether the employee could decide that alternative employment was unsuitable and act on that decision to enliven an entitlement to retrenchment payments during a three month trial period - whether the agreement contemplated that several offers may be made by the employer to the employee of alternative employment.

Matter No. 94/114R of 1996

DAVID NEIL HAWKINS, FINANCE SECTOR UNION v COMMONWEALTH BANK OF AUSTRALIA

Coram : Lee, von Doussa & Madgwick JJ

Place : Adelaide

Date : 18 November 1996

IN THE INDUSTRIAL RELATIONS)

COURT OF AUSTRALIA )

DISTIRCT REGISTRY ADELAIDE ) No. SI 94/114R of 1996

SOUTH AUSTRALIA DISTRICT )

REGISTRY )

BETWEEN:

DAVID NEIL HAWKINS

FINANCE SECTOR UNION

Appellants

AND:

COMMONWEALTH BANK OF

AUSTRALIA

ACN 123 123 124

Respondent

MINUTES OF ORDER

JUDGES MAKING ORDER : LEE, VON DOUSSA &

MADGWICK JJ

WHERE MADE : ADELAIDE

DATE OF ORDER : 18 NOVEMBER 1996

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. The Court declares that upon the true construction of the Commonwealth Bank of Australia Redundancy Redeployment and Retrenchment Agreement 1990, and in the events which happened, the first named appellant had an entitlement to retrenchment payments pursuant to the said Agreement upon him notifying the respondent by facsimile dated 30 November 1993 to the effect that he found the alternative employment unsuitable.

3. There be judgment for the first appellant for $141,205.40 together with interest at the rate of 7 per centum per annum from 11 February 1994.

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

IN THE INDUSTRIAL RELATIONS)

COURT OF AUSTRALIA ) No. SI 94/114R of 1996

DISTRICT REGISTRY ADELAIDE )

SOUTH AUSTRALIA DISTRICT )

REGISTRY )

BETWEEN:

DAVID NEIL HAWKINS

FINANCE SECTOR UNION

Appellants

AND:

COMMONWEALTH BANK OF

AUSTRALIA

ACN 123 123 124

Respondent

Coram : Lee, von Doussa & Madgwick JJ

Place : Adelaide

Date : 18 November 1996

REASONS FOR JUDGMENT

The Court: This is an appeal from the decision of a single judge of this Court against the dismissal of an application by the appellants. The application seeks declarations concerning the operation of an unregistered industrial agreement entitled "The Commonwealth Bank of Australia Redundancy Redeployment and Retrenchment Agreement 1990" ("the Agreement"), and an order in favour of the first appellant ("Mr Hawkins") for severance pay claimed by him as due on the termination of his employment with the respondent as the result of redundancy. The entitlement of the appellants to the remedies sought depends upon the proper construction of the Agreement, and upon its application to Mr Hawkins in the events which occurred in the course of his employment with the respondent in 1993.

In mid-1993 Mr Hawkins held the position in Adelaide of Head of Institutional Banking, South Australia, with the respondent ("the Bank"). He had been with the Bank for some 31 years. He was employed pursuant to a written contract which included in its terms the provisions of the Agreement. His position was graded at the level of Senior Executive, a position generally referred to as SE. This was the highest level of executive position in the Bank structure, the other levels, in decreasing order, being Executive (EB) and Executive (EA).

In 1993 there was a restructuring of the Bank's operations. For Institutional Banking this involved separating "relationship" responsibilities from the responsibility for loan approvals. Institutional Banking is that part of the Bank's operations that handles its largest and most valuable clients. As Head of Institutional Banking, South Australia, Mr Hawkins was organisationally responsible for four departments, and had under his general control and supervision a staff of 57. His principal responsibility was for the Corporate Department which occupied some eighty per cent of his time. The essential function of the Corporate Department was to lend funds to corporate clients. Mr Hawkins had a personal authority to approve loans of up to $10 million, and authority in conjunction with another bank officer to approve loans up to $15 million. His duties involved both relationship responsibilities and loan approval responsibilities.

In June 1993 Mr Hawkins was informed that as part of the restructuring the position of Head of Institutional Banking, South Australia, would be abolished, an event which in due course happened. It is a central plank in Mr Hawkins' case that upon the abolition he was placed in a situation of "redundancy" within the meaning of clause (c)(iii) of the Agreement. As it will be necessary to refer to many clauses in the Agreement, its full text is appended to this judgment.

It is admitted on the pleadings that on 5 October 1993 Mr Hawkins was redeployed in alternative employment with the respondent by appointment to the position of Relationship Executive, Banking Services. That position was graded at the Executive EB level, but it was treated as an over-graded position so that Mr Hawkins continued to be paid at the Senior Executive rate. The trial was conducted on the footing that the appointment was made pursuant to clause (e)(x) of the Agreement.

Clause (e) of the Agreement bears the heading REDEPLOYMENT, and clause (e)(x) reads:

"An officer accepting alternative employment within the Bank, other than to a directly comparable position, will be given a trial period of three months in his/her new position. Should either the Bank or the officer find that the employment is unsuitable, the officer's services may be terminated without loss of entitlement to retrenchment payments calculated to the date service actually ends."

The position of Relationship Executive involved Mr Hawkins in direct responsibility for marketing bank products to a portfolio of corporate clients. That portfolio comprised only about one quarter of the corporate clients for whom Mr Hawkins had responsibility in his former position. In the new position he had no personnel or management roles and no loan authorisation role.

In developing the proposed restructure of the Bank's South Australian operations a difference of opinion arose between senior personnel responsible for planning the restructure as to the appropriate grading of the new position to which Mr Hawkins was to be appointed. A number of Mr Hawkins' superiors sought to have the position given a Senior Executive classification, whereas the Job Evaluation Committee initially imposed the lower EB classification.

It is plain on the evidence that Mr Hawkins was dissatisfied with aspects of his new position. He thought seriously about whether he would remain with the Bank, and made inquiries as to other positions available in Adelaide. On 25 or 26 November 1993 Mr O'Brien, the Head of Banking Services, telephoned Mr Hawkins and asked him to attend a meeting in Sydney in consequence of the resignation of another senior officer in Adelaide who had been appointed to a new position as part of the restructure. Unbeknown to Mr Hawkins, consideration was being given at that time by senior personnel in Sydney to the regrading of Mr Hawkins' new position to that of Senior Executive.

On 30 November 1993 Mr Hawkins accepted a position outside the bank with Stratco (SA) Pty Ltd, and then telephoned Mr O'Brien to inform him of his intention to leave the Bank. Although a decision had been made by the Managing Director of the Bank on 26 November 1993 that Mr Hawkins' position in South Australia would be regraded to the SE level, Mr Hawkins was not so informed. Mr Hawkins agreed to attend the meeting in Sydney as earlier requested.

On 30 November 1993 Mr Hawkins despatched by facsimile to the Bank's Personnel Manager a letter saying:

"I am writing to inform you that I have elected to take voluntary retrenchment in terms of Clause (e)(x) of the Commonwealth Bank of Australia Redundancy, Redeployment & Retrenchment Agreement 1990.

I think it appropriate that I provide the Bank with approximately four weeks notice before my departure, and would be pleased to discuss this matter further if required..."

Although the letter does not say so in express terms, Mr Hawkins considered he had the right to elect to take voluntary retrenchment as he considered that the alternative employment as Relationship Executive was "unsuitable" within the meaning of clause (e)(x).

Mr Hawkins attended the meeting in Sydney on 1 December 1993. He was informed by officers of the Bank that he was not able to treat himself as redundant in the way he was intending so as to be entitled to retrenchment pay. He was told that approval had been given for his position to be reclassified at the level of SE. He was invited to tear up his letter of 30 November 1993.

Following the meeting the Bank wrote to Mr Hawkins informing him that:

"As discussed at our meeting on 1 December, your position has been sized at Senior Executive level and, accordingly, the provisions of the RR&R Agreement are not relevant to your employment with the Bank. On that basis your request for retrenchment cannot be approved..."

Mr Hawkins did not withdraw his letter of 30 November 1993. Rather, he instructed solicitors who corresponded with the bank by letter dated 3 December 1993 saying, relevantly, that:

"Mr Hawkins finds his employment as executive EB unsuitable and he is entitled to terminate his services without loss of entitlement to retrenchment payments under the definition of retrenchment contained in clause (c)... and the reference to termination of service in clause (e)(x).

In our view, once an employee has been offered employment other than to a directly comparable position, the employer has taken a path which, in the event that the redeployment proves unsuitable, leaves the employee with the right to accept retrenchment..."

The Bank responded by letter continuing to put in issue Mr Hawkins' entitlement. Mr Hawkins remained in the Bank's employ until 11 February 1994. On 4 February 1994 he wrote to the Bank referring to his correspondence of 30 November 1993 and to his election to take voluntary retrenchment pursuant to clause (e)(x) of the Agreement. He explained why he had remained at work for longer than the four weeks notice that he had given in his earlier letter, and advised of his intention to leave on 11 February 1994. He said that he did not accept that it was in the power of the Bank by unilateral action to lawfully change the circumstances of his "alternative employment" after he had already given notice "as to unsuitability" and "claimed retrenchment".

When Mr Hawkins left his employment with the Bank no payment was made to him by way of severance pay. Court proceedings were then instituted.

The learned trial judge held that Mr Hawkins was in a redundancy situation in mid-1993. In doing so it was first necessary to resolve a difficulty in the construction of clause (c)(iii) which reads:

"(iii) 'Redundancy' means a position redundancy-where work (or a major portion of it):

(1) is no longer required to be performed;

(2) is to be performed at a new location which requires a change in residence of the officer concerned; or

(3) results from re-organisation; changed business practice; technological change; downturn in business; a decision to reduce the number of officers; or a general reduction in classification levels or positions."

Read literally the definition makes little apparent sense. His Honour accepted the submission of the Bank that the clause should be construed by treating paragraph (3) as a concluding paragraph of general application to each of paragraphs (1) and (2). This involves ignoring the structure of the definition and, in particular, the semi-colon and "or" at the conclusion of paragraph (2) and the separate numbering of paragraph (3). His Honour observed that redundancy has an accepted meaning as describing a situation that might lead to termination of an employee's employment because the duties of a job or position are no longer to be performed by an employee as the occupant of that job or position and often as a result of technological or organisational change: see Short v F W Hercus Pty Ltd (1993) 40 FCR 511 at 520-521; Quality Bakers of Australia Limited v Goulding (1995) 60 IR 327 and Jones v Department of Energy and Minerals (1995) 60 IR 304. His Honour said that it is consistent with the ordinary meaning of redundancy to treat paragraph (1) as reflecting that meaning, paragraph (2) as an extension of it, and paragraph (3) as identifying the circumstances in which a redundancy arises which attracts the operation of the agreement. The appellants now accept that this is the proper way in which clause (c)(iii) should be construed.

Proceeding from this construction of clause (c)(iii) his Honour considered whether the work of Mr Hawkins, or a major part of it, was no longer required to be performed and whether that arose relevantly as a result of reorganisation, such that a position redundancy occurred. After making findings on disputed evidence as to the work done by Mr Hawkins in his former capacity as Head of Institutional Banking, South Australia, and as Relationship Executive under the new structure his Honour concluded that Mr Hawkins was involved in a position redundancy. This finding made it unnecessary to consider a further argument advanced by the appellants that the Bank was estopped from disputing that there was a position redundancy.

Upon a redundancy occurring, the redeployment provisions of clause (e) come into play, and by clause (e)(i) the Bank is to make reasonable efforts to redeploy the officer concerned. This obligation reflects the statement in the preamble to the Agreement that "the first priority of the Agreement is the protection of jobs". Clause (e)(iv) contemplates that where alternative employment within the Bank is offered, it will be either to a "directly comparable position" or to a position of alternative employment which is not directly comparable.

In the former situation clauses (e)(iii) and (v) apply; the officer's actual salary and allowances shall not be reduced if the offer is accepted but if the offer is rejected there is no entitlement to notice, severance payments, or other payments that would otherwise arise on termination as the result of redundancy. Under the definition in clause (c)(ii) the position of Relationship Executive (EB) to which Mr Hawkins was appointed on 5 October 1993 was not a directly comparable position as it was not at the same classification as his former SE position.

In the latter situation clause (e)(ix) contemplates that the officer will be made an offer in writing with information about the proposed job options, and, by clause (e)(iv)(2), that the officer will have at least two weeks to decide whether or not to accept the offer. The provisions of clause (e)(x), set out above, come into operation upon the officer accepting the offer of alternative employment. In the present case these formalities were not followed but, as earlier stated, it is admitted on the pleadings that Mr Hawkins was appointed to the position of Relationship Executive (EB) on 5 October 1993, and the trial was conducted on the footing that it was an appointment pursuant to the provisions of clause (e)(x).

The appellants at trial contended that it was open to Mr Hawkins (or the Bank) at any time during the trial period of three months to form the view that the alternative employment was unsuitable, and then to rely on that view to enliven clause (e)(x). It was contended that upon clause (e)(x) being enlivened the employment of the officer came to an end and an entitlement to severance pay and other benefits arose under the Agreement. The Bank, on the other hand, contended that the trial period was for a fixed period of three months and both the redeployed officer and the Bank were obliged to wait until the end of that time before making an assessment as to suitability. If the assessment were unfavourable, it followed from the accepted meaning of retrenchment, and from the terms of the Agreement, that only the Bank had the right to terminate the officer's employment; and rather than doing so the Bank could make a further offer to redeploy the redundant officer in one of the ways contemplated by clause (e).

The trial judge held that on the proper construction of the Agreement clause (e)(x) did not permit either side to act on a view that the alternative employment was unsuitable until the trial period had concluded. This had two consequences. First, Mr Hawkins could not invoke clause (e)(x) as he had sought to do on 30 November 1993. Secondly, whilst his Honour considered that the regraded SE position about which Mr Hawkins was advised on 1 December 1993 was a "directly comparable position", it was not open to the Bank to make a further offer at that time of the regraded position.

The trial judge further held that an officer only became entitled to benefits under clause (e)(x) if the officer were retrenched, that is, only if the Bank terminated the officer's employment. In the present case this had not happened; rather Mr Hawkins resigned from his employment.

On both these grounds Mr Hawkins' claim failed, and a declaration which would have endorsed a construction of the Agreement favourable to Mr Hawkins' case was not made.

Although it was not essential to the disposition of the case on these grounds, his Honour also held that clause (e) provided for a process that the Bank may pursue, with the involvement of the employee, only once, with a view to redeploying the officer. This was a further reason why it was not open to the Bank to offer the regraded SE position to Mr Hawkins on 1 December 1989 as alternative employment pursuant to clause (e). His Honour said that it seemed relatively clear that the opinion Mr Hawkins formed about the new position and which he held when he wrote on 30 November 1993 still existed at the expiration of the trial period on 5 January 1994, and existed when he wrote to the Bank on 4 February 1994. However his Honour considered that the appellants' case had been conducted throughout the trial on the footing that the relevant date for the opinion about unsuitability, leading to a consequential entitlement to severance pay, was 30 November 1993, and that it would be inappropriate to allow the case to be reopened to argue a different case based on Mr Hawkins holding the requisite opinion at the end of the trial period.

The primary grounds of appeal advanced by the appellants before this Court contend that the trial judge should have held that Mr Hawkins was entitled to elect to take retrenchment at any time during the trial period. This contention involves overturning the trial judge's conclusions, first, that the assessment of suitability can only be made at the end of the trial period, and secondly, that the entitlement to severance payments and other benefits only arises on a termination by and at the discretion of the Bank. In the alternative the appellants contend that as Mr Hawkins still held the view that the alternative employment was unsuitable at the end of the trial period he is entitled to retrenchment benefits. This contention involves, in part, a challenge to his Honour's decision not to allow this alternative formulation of the claim because the trial had been conducted on a different footing.

The Bank seeks to uphold the conclusion of the trial judge which led to the dismissal of the claim. By Notice of Contention the Bank also challenges the finding that Mr Hawkins was in a redundancy situation in 1993, and the construction of the Agreement which limits the entitlement of the Bank to make only one offer of redeployment.

The questions of construction agitated at trial should be considered together as the particular clauses of the Agreement must be interpreted in context having regard to the overall purpose of the Agreement. The trial judge approached the case

in this way. His Honour said:

"The purpose of the Agreement apparent from its terms is to enable the Bank to restructure its workforce for reasons of the type referred to in clause (c)(iii)(3) and in so doing redeploy employees to other positions. However it also has the purpose of conferring a right to a special payment, severance pay, and to other benefits on an employee whose position has been made redundant, who cannot be redeployed and whose employment is terminated as a consequence. What is described as a key objective of the Agreement is identified in clause (b). It is to minimise the potential for industrial disputation in circumstances where change occurs or might occur and redundancies and redeployment might follow. Given the Agreement's stated key objective it is unlikely that it was intended by the parties that employees whose positions are made redundant by the action of the Bank could be required, before being entitled to severance pay, to remain in the employ of the Bank and be required to undergo as much retraining as the Bank saw fit or consider working in and, if agreed, work in as many alternative positions as the Bank might offer without objection from them or those that represent them. It is to be remembered that the entitlement to severance pay arises as the result of the loss of the position for which the employee was employed or into which the employee had agreed to be transferred by promotion or otherwise. The fundamental purpose of the Agreement was, in my opinion, to confer a measure of flexibility on the Bank in redeploying staff in redundant positions while giving a measure of certainty to employees as to their future if their positions become redundant as a result of the action of the Bank. It is unlikely, in my opinion, that the Agreement was intended to confer a right on the Bank to continue to redeploy an employee as much and as often as it wished till it was satisfied that no further redeployment was practical or even possible prior to an employee being entitled to severance pay."

This passage of the judgment is attacked by the Bank insofar as it expresses the unlikelihood that the Agreement intended that the Bank could require an officer in a position of redundancy to work in as many alternative positions as the Bank might offer. However, we agree with his Honour's statement of the purpose of the Agreement, and with the unlikelihood identified by him.

Moreover, we agree with the trial judge that there are other indications in the Agreement which lead to the conclusion that clause (e) provides for a process that the Bank may pursue, with the involvement of the employee, only once. As already stated, clause (e) contemplates that the Bank, in pursuit of its obligation to make reasonable efforts to redeploy an officer in a redundancy situation, may offer alternative employment of two types. However if no offer at all is made, clearly the officer cannot be redeployed and shall be retrenched: clause (f)(i). The consequence of the redundancy is thereupon crystallised. If there is an offer of a directly comparable position, the making of that offer also immediately crystallises the consequence of the redundancy. The officer either accepts that position and receives the benefit of clause (e)(v) (and possibly of clauses (e)(vi) and (e)(vii) although another construction question might arise as to the application of those clauses), or leaves the employment without the entitlements otherwise provided for in the Agreement: clause (e)(iii).

If there is an offer of alternative employment other than to a directly comparable position, the Agreement envisages that the offer will be in writing, and that the officer will be allowed at least two weeks to decide whether or not to accept the offer. If the offer is not accepted, the Agreement makes no provision for the making of a further offer; on the contrary the scheme of the Agreement is that an officer who does not accept the offer will be treated as one who cannot be redeployed, and shall be retrenched with the consequential benefits provided for in the Agreement. If the offer is accepted the officer is there and then treated as redeployed: see clauses (e)(vi), (e)(vii) and (e)(ix), although the redeployment is subject to the trial period provisions of clause (e)(x). The Agreement therefore envisages that an offer of alternative employment, other than to a directly comparable position, will bring about a situation within a short time span where the uncertainty for the officer created by the situation of redundancy is resolved: the officer is either retrenched because redeployment has not happened, or the officer is redeployed. Admittedly, a measure of uncertainty remains for the duration of the trial period, but whereas at the time when the former position became redundant the officer faced the future uncertain whether any job would be available at all, after redeployment the nature and terms of the alternative employment have been defined by the written offer, and the officer has made a considered decision to try and forge a new future with the Bank on known terms.

The scheme of these provisions is to bring certainty with the minimum of delay to the position of the officer who is in a position redundancy. It would be inconsistent with this scheme for the Bank to have an entitlement, in its discretion, to make repeated attempts to redeploy the officer by making further offers of alternative employment under clause (e) if the alternative employment previously offered were found to be unsuitable.

The alternative situation contended for by the Bank could place an officer in a most invidious position, attended by uncertainty of unknown duration. It should be assumed that the Agreement was drafted in the full knowledge that redundancy brings great stress to those whose positions are abolished, and to their family and social relationships. If the Bank were entitled to make repeated attempts to redeploy an officer by offering one alternative position after another, with each new position attracting a new trial period, the process could be a long one. It is not unlikely that in such a drawn out process some officers would give up their commitment to redeployment and, out of pressure from stress or frustration, feel compelled to resign.

Others may be prepared to keep exploring other positions of alternative employment suitable to both parties if the first position offered is unsuitable. The construction contended for by the appellants would not prevent the parties agreeing to try another position on a trial period under clause (e)(ix), but that would be a matter for separate agreement. So far as the Agreement establishes rights and obligations which can be enforced by one party against the will of the other, it should be construed from the view point that the Agreement was intended to achieve the purpose stated by the trial judge.

The purpose of the Agreement is to give a measure of flexibility to the Bank in redeploying staff on the one hand and, on the other hand, to give a measure of certainty to those whose positions have been abolished. To give the Bank one opportunity to make a considered offer of a selected alternative position to an officer in a redundant situation achieves a fair balance between these objectives. To give the Bank the open-ended options for which it contends would be to construe the Agreement in a way that did not achieve that fairness.

We agree also with the observation of the trial judge that the construction which permits only one offer is not inconsistent with the obligation imposed on the Bank by clause (e)(i). The obligation imposed means that the Bank must seek out and select a position with care to maximise the prospect that the position is suitable.

The submissions of the Bank contend that the appellants were not entitled to advance this "only one offer" construction at trial, and the trial judge for this reason fell into error in adopting it. Counsel for the Bank argue that this is so because the appellants did not suggest that only one offer of redeployment could be made until final submissions were being made on the last day of the trial. Even if this were the case, in our opinion the proper construction of the Agreement, which at all times was central to the issues between the parties, was a question of law for the trial judge. The possible construction was raised at trial, even if belatedly, and the Bank had the opportunity to address the trial judge in answer to the submission. However, it seems to us that this construction was raised even before proceedings commenced by Mr Hawkins' solicitors in their letter of 3 December 1993. That view of the meaning of the Agreement is inherent in the assertion that "once an employee has been offered employment other than to a directly comparable position, the employer has taken a path which, in the event that the redeployment proves unsuitable, leaves the employee with a right to accept retrenchment." If more than one offer of redeployment were open to the Bank under clause (c)(x) the path would not lead to this conclusion.

The Bank seeks to support the construction that would permit multiple offers of alternative employment by reference first to an Enterprise Bargaining Agreement entered into between the Bank and the Union in respect of the officers in 1993, with effect from 21 September 1993, and secondly to documents brought into existence by the Union in the course of negotiations leading up to the execution of the Agreement. We have considered these materials but do not think they assist the Bank's case.

It is difficult to envisage how the Enterprise Bargaining Agreement reached in 1993 can assist in the construction of the Agreement reached in 1990, but in any event clause 24 of the Enterprise Bargaining Agreement on which reliance is placed is not, in our opinion, inconsistent with the "only one offer" construction. Clause 24 sets out a procedure intended to emphasise voluntary retrenchments in preference to compulsory retrenchment. It does not deal with the terms on which alternative employment will be offered to an officer in a situation of redundancy.

The documents relating to the pre-contractual negotiations in 1990 do not assist in determining the parties' intention at the time when agreement was reached. The documents referred to show that during some stages of the negotiations the Union was seeking to impose on the Bank an obligation to "pursue further offers" where an employee rejected an offer of employment and to "make further offers" where during a trial period in an alternative position the officer found it to be unsuitable. The fact that clauses in similar terms to those nominated by the Union were not included in the Agreement as finally executed would tend to support a conclusion contrary to that urged by the Bank. The documents relied on give no clear picture which assists with the point of construction.

The Bank also contends that the only one offer construction is inconsistent with the way in which the Bank, with the consent of the Union, has always gone about advertising employment positions as required by s.87A of the Commonwealth Banks Act 1959 (Cth). Section 87A reads:

"87A. The appointment, promotion and transfer of officers shall be in accordance with procedures that preclude patronage and favouritism and ensure that:

(a) all persons have, so far as practicable, a reasonable opportunity to apply for appointment or be considered for, promotion or transfer, as the case may be; and

(b) appointments, promotions and transfers are made on the basis of an assessment of the relevant suitability of the persons considered for appointment, promotion or transfer, as the case may be, having regard to:

(i) the nature of the duties to be performed by the person appointed, promoted or transferred; and

(ii) the abilities, qualifications, experience and other attributes of each person so considered that are relevant to the performance of those duties."

Section 87A is not a provision directed to situations of redundancy. Clause (e) of the Agreement requires the Bank to offer a specific position to an officer in a position of redundancy. We do not think the terms of s.87A assist in the construction of the Agreement.

The conclusion that "termination through retrenchment", the event which gives rise to an officer's entitlement to severance payments under clause (h)(i), did not include termination at the initiative of or by an officer was reached by the trial judge after an extensive review of authorities bearing on the meaning of the words "retrench" and "retrenchment". In their ordinary dictionary meaning, and in many industrial law contexts, these words refer to a termination of employment by an employer. Moreover several clauses of the Agreement are drafted as if these words refer to termination by the employer: see clauses (f)(i), (g)(i). Turning to clause (e)(x) his Honour said:

"...the language of the clause is quite equivocal as (to) whether it confers a right of (sic) an employee to terminate his or her employment. The compound verb 'may be terminated' is in the passive voice and there is no real indication of who it is that may terminate the employment. The construction of the clause advanced by the applicants is at odds with the consistent use elsewhere in the Agreement of the word 'retrench' or variants of it which, as I have already discussed, is a reference to termination by the Bank."

We do not think there can be any real doubt that in the drafting of the Agreement the word "retrenchment" means termination by the employer of the employment of an officer as the result of redundancy, and that clause (f)(i) means that where an officer cannot be redeployed he or she shall be retrenched by the Bank. However we do not think this leads to the conclusion that where, at a point in time contemplated by clause (e)(x), an officer of the Bank finds that the employment is unsuitable, the Bank has a discretion not to retrench the officer. It follows from the construction that the Agreement permits only one offer of alternative employment, that when redeployment subject to the trial period fails because the officer finds the employment is unsuitable, that upon such a failure the officer "cannot be redeployed" within the meaning of clause (f)(i). Accordingly the Bank comes under an obligation under that clause to retrench the officer. In clause (e)(x), in the second sentence:

"Should either the Bank or the officer find that the employment is unsuitable, the officer's services may be terminated without loss of entitlement to retrenchment payments calculated to the date service actually ends."

the words "may be terminated" are not the source of the power to bring the employment to an end. The purposes of the sentence are to identify the criterion on which the attempt to redeploy the officer will fail, and to preserve the entitlement of the officer to a severance payment even though at the time of actual termination the officer was occupying a position that was not one that involved a position redundancy. The word "may" is normally indicative of a permissive or discretionary power rather than a mandatory power, but in its use in clause (e)(x) it is not in any way qualifying the nature of the obligation resting on the Bank to bring the employment to an end. That obligation arises under clause (f)(i). The second sentence of clause (e)(x) is dealing with different topics.

In our opinion Mr Hawkins by notice given to the Bank at an appropriate time that he found the alternative employment to be unsuitable, was entitled to trigger the obligation of the Bank to act under clause (f)(i) to retrench him, and pay him retrenchment payments, including a severance payment under clause (h)(i).

The next question is whether clause (e)(x) permitted Mr Hawkins to notify the Bank on 30 November 1993 that he found employment as Relationship Executive (EB) unsuitable. On this question the trial judge said:

"Given that the Bank, in my view, can make only one offer of alternative employment and the employee is required to give the matter careful thought over a period of at least two weeks, it is unlikely that it was intended that the trial might conclude after a brief period and within the three months. Moreover clause (e)(x) states an employee 'will be given a trial period of three months'. The language is emphatic and though it is in terms of something akin to a right conferred on the employee, the language suggests the three months is inviolate. If so, the employee is entitled to insist upon a trial of three months and the Bank would not be able to act on the view that the employment was unsuitable till the trial had concluded. It is unlikely that the scope of the right conferred on the employee was intended to be any different to that conferred on the Bank. That is, the right of the employee to act on a view that the employment was unsuitable also arises only after the trial period of three months has concluded."

We are unable to agree with this conclusion. The facts that the Agreement contemplates that the Bank will make only one offer of alternative employment, and that the officer will have two weeks to consider an offer which is not one to a directly comparable position, are indications that the redeployment exercise is to be undertaken with care but do not, in our opinion, lead to the conclusion that the trial period must run for three months before either side can notify unsuitability. The object of clause (x) is the protection of jobs, as far as that is possible, through the offer and acceptance of alternative employment. The obligation imposed on the Bank to seek out a suitable position and to describe it in a written offer which contains the information required by clause (c)(ix), and the opportunity given to the officer to consider the offer, are no doubt intended to maximise the chance that the alternative employment, if accepted, will turn out to be suitable. However it is not difficult to envisage situations where the alternative employment might for some unforeseen reason turn out to be plainly unsuitable to one party or the other within a short period of time and be likely to remain so. By way of example, if an officer accepted alternative employment at a different location from his original work place, difficulties could arise over housing, or over employment, education or child care of other members of the officer's family, which caused the officer to find the new employment unsuitable: cf Marley v Forward Trust Group Ltd [1986] ICR 891 at 894-895. In this type of situation, to insist that both parties continue in a relationship which is unsuitable to at least one of them until the three months expire is to impose an unreasonable and pointless situation. As the employment is likely to be brought to an end whenever the opportunity arises, it is unlikely, in our opinion, that the Agreement was intended to hold the parties to the employment relationship until the end of the trial period. Subject to the question raised by the Notice of Contention as to whether Mr Hawkins was in a position of redundancy in mid-1993, in our opinion the Agreement permitted Mr Hawkins to give notice on 30 November 1993 that he found the alternative employment to be unsuitable. That was the effect of his letter of 30 November 1993. That notification to the Bank indicated that Mr Hawkins could not be redeployed in the alternative employment selected by the Bank. The Bank thereupon came under an obligation to retrench him under clause (f)(i) and to pay retrenchment payments under the Agreement.

On the view which we have just expressed it is unnecessary to consider the further submissions of the appellants in support of this construction based on post contractual documents discovered by the Bank which the trial judge refused to admit into evidence.

Had it been necessary for the determination of the case the trial judge indicated that he would have held, contrary to the Bank's submissions, that the Agreement did not impose any criteria on a finding of "unsuitability" to be made under clause (e)(x), that the position was unsuitable in the opinion of Mr Hawkins, and that the decision of Mr Hawkins was not a capricious one.

These conclusions are challenged by the Bank in the Notice of Contention.

The Bank contended before the trial judge, and has repeated the same submissions before this Court, that an officer must have bona fide reasons (not related to a desire to receive generous retrenchment benefits) which reasons are related to the duties involved in the employment. It was submitted that a relevant guide to ascertaining whether the reasons were of this kind would be found in the definition of "directly comparable position" in clause (c)(ii).

His Honour pointed out that the pleadings do not put in issue the fact that Mr Hawkins was offered, considered and accepted employment in the manner contemplated by clauses (e)(iv)(2), (e)(ix) and (e)(x), although the evidence suggests that he was not. If he were not offered the position in the manner contemplated by clause (e)(iv)(2) and (e)(ix) it is difficult to view unduly critically the reason given for finding the position unsuitable. We agree with this observation. We also agree with his Honour that clause (e)(x) does not, by implication, impose criteria by which either the Bank or the officer is to assess suitability.

The Agreement by its terms confers an unqualified right on an officer to accept or reject an offer of alternative employment made under clauses (e)(iv)(2) and (e)(ix). His Honour considered that an officer would be likely to take into account in considering the offer matters such as the prospects of other employment outside the Bank, whether the alternative position would provide sufficiently rewarding and stimulating employment, what prospects of advancement would flow from the new position, and the likely long term security of the position. His Honour commented:

"No doubt the status of the new position could have some bearing on not only the perceived attractiveness of the position but also on the matters just mentioned."

His Honour said that if it were relevant to take matters of these kinds into consideration when deciding to accept the offer, it would be curious if the Agreement did not permit an officer to consider similar matters in deciding whether the employment was unsuitable.

We agree with this conclusion. The definition of "directly comparable duties" provides no guidance when considering the suitability of a position which is not one that is directly comparable. Considerations of the kind identified by the trial judge do in any event relate to duties of the position, in the sense that the decision of the officer is based on the content of those duties and the circumstances in which they must be carried out.

The trial judge found as a matter of fact that Mr Hawkins found the position unsuitable, and that his decision was not reached capriciously. The reasons for Mr Hawkins' decision included his view that in the new position his prospects of advancement to the position of South Australian General Manager to which he aspired were diminished. These conclusions were clearly open on the evidence, and we are not persuaded by the Bank's submissions that his Honour fell into error on the question of suitability.

It remains to consider further questions raised in the Notice of Contention which challenge the finding that Mr Hawkins was in a redundancy situation in mid-1993. The Notice of Contention alleges:

"1. His Honour ... should not have accepted Hawkins' account of his work, as to do so overlooked concessions made by Hawkins during the course of his cross-examination.

2. Redundancy situation:

(a) His Honour ... posed an inappropriate question when determining whether Hawkins was in a redundancy situation. His Honour said:

'It is thus necessary to consider whether 'a major portion' of the work of the position formerly held by Hawkins was to be performed by the occupant of the position to which he was to be appointed...'

(b) The question in sub-paragraph (1) (sic -(a)) fails to focus on certain relevant matters, namely:

(i) Whether Hawkins was to perform work of a kind for which he was suited;

(ii) Whether Hawkins would be fully and gainfully employed in such work;

(iii) Whether the new work was work of a type and character he undertook in his previous position and which accorded with his general position and skills within the Bank;

(iv) Whether he was to be remunerated on an equivalent salary basis.

(c) The question in sub-paragraph (a) focuses primarily on a comparison of the existing duties of the employee, compared with the proposed duties of the employee, rather than, as the Bank contended, whether in the new position the work of the employee (or lack of it) meant the employee had, in reality, been made redundant.

3. His Honour... incorrectly concluded, as a matter of mixed law and fact, that the definition of redundancy in clause (c)(iii) of the RR & R agreement applied to Hawkins."

As the trial judge held that Mr Hawkins was in a redundancy situation within the meaning of clause (c)(iii), it was not necessary for his Honour to deal with a plea raised in the reply that the Bank was estopped by representations made to Mr Hawkins by its officer from May 1993 to 30 November 1993 from contending to the contrary. If this Court were otherwise to accept the Bank's submissions raised in the above paragraphs of the Notice of Contention, the issue of estoppel would have to be remitted to the trial judge.

Apart altogether from the factual issues raised by the plea of estoppel, the trial appears to have been conducted on the basis that clause (e)(x) was critical, and the Bank advanced arguments on the construction of that clause which ultimately led to its success at trial. It is difficult to see in this circumstance how the question whether Mr Hawkins was in a position of redundancy can remain a live one as clause (e) only has application where a redundancy situation occurs. Nevertheless we have considered the submissions of the Bank on this topic made in support of the Notice of Contention.

We do not think the trial judge posed the wrong question. Earlier in the judgment his Honour posed the question in slightly different terms to the formulation quoted in paragraph 2(a) of the Notice of Contention, namely, whether the work of Mr Hawkins, or a major portion of it, was no longer required to be performed and whether that arose relevantly as a result of reorganisation. That formulation of the question correctly reflected the definition of redundancy in clause (c)(iii). The impugned formulation appears in the following passage of the judgment (and is shown in italics):

"At no point in the proceedings was it suggested that some other position would emerge from the restructure, to which Hawkins might be appointed but was not, which was substantially the same as the abolished position in all its facets. It is plain from the evidence that the position of Head of Institutional Banking was abolished. A literal reading of the definition might, as the applicants submit, indicate that if this was so, the former position did not exist at all and thus Hawkins was involved in a position redundancy. However the definition operates, not on names or titles, but on the aggregation of duties that constitute the position. It is thus necessary to consider whether 'a major portion' of the work of the position formerly held by Hawkins was to be performed by the occupant of the position to which he was to be appointed, it being the only position identified by the Bank as substantially reflecting the work of the old position."

In context, the impugned formulation is not inappropriate.

The Bank submits that instead of making the inquiry posed by the question his Honour formulated, he should have looked at the new role and considered whether Mr Hawkins would be fully occupied in the new role with work of a type and character which he previously performed and which accorded with his general position and skills within the Bank. Attention was directed to many passages in Mr Hawkins' cross-examination that pointed to the likelihood that in the new role he would be fully occupied in work of importance to the Bank. However that evidence does not undermine the trial judge's findings that the range of duties Mr Hawkins would perform in the new position was more limited than in the former position. Under the definition of redundancy in clause c(iii) the question was not whether Mr Hawkins personally had become redundant to the requirements of the Bank, but whether the position which he formerly occupied had become redundant. The new position was to have none of the personnel functions of the old position. He would no longer be responsible for managing a large group of employees of the Bank. He would have no direct managerial role in relation to the Treasury Department and International Trade. His role in credit assessment was to become indirect and collaborative rather than direct. His Honour concluded:

"In the present case, the position assumed by Hawkins had very few of the managerial functions that constituted a significant part of the duties of the position he formerly occupied. It involved a significant change in the duties that were, in my opinion, material. They constituted the loss of a major portion of the work performed by Hawkins in the position of Head of Institutional Banking, South Australia. He was thus involved in a position redundancy."

In our opinion his Honour posed the correct question to determine if Mr Hawkins was in a position redundancy for the purpose of the Agreement, and that the conclusion which he reached on the facts was justified.

The evidence led at trial put in issue Mr Hawkins' account of his duties as Head of Institutional Banking. The trial judge noted that the two officers of the Bank superior to Mr Hawkins who were directly responsible for the operations carried on by him were not called by the Bank. His Honour said:

"The applicants are entitled to rely on the failure of the Bank to call these officers to the extent permitted by the principle in Jones v Dunkel (1959) 101 CLR 298. If Hawkins' evidence is to be accepted then plainly his account of what he did provides the most reliable guide of his duties. I did not view his account of what he did as exaggerated or as apparently involving any misstatement of his work and I accept it."

The Bank's contentions on the question of redundancy seem to us to turn essentially on the findings of fact made by the trial judge. The judge was entitled to rely on the principle in Jones v Dunkel. He had the benefit of seeing and hearing the witnesses and it was open to him to accept Mr Hawkins' evidence. The evidence given by Mr Hawkins in cross-examination mainly concerned his likely role as Relationship Executive, and his perceptions of its responsibility. Insofar as he made concessions in his cross-examination they do not undermine the description which he gave of his work as Head of Institutional Banking, South Australia. The conclusion reached that Mr Hawkins was in a position redundancy was based on his Honour's assessment that a major portion of the work as Head of Industrial Banking, as described by Mr Hawkins, would not be performed by the holder of the Relationship Executive (EB) position to which he was appointed on 5 October 1993. The emphasis given in cross-examination to the importance and extent of the work that would be performed by Mr Hawkins in the latter role does not bear directly on the extent of the former duties that were no longer to be performed.

For these reasons we consider the appeal should be allowed. There should be a declaration that upon the true construction of the Agreement and in the events which happened, Mr Hawkins had an entitlement to retrenchment payments pursuant to the Agreement upon him notifying the Bank by his facsimile dated 30 November 1995 to the effect that he found the alternative employment unsuitable.

There should also be judgment for Mr Hawkins for the amount of the severance payments provided for under the Agreement calculated to 11 February 1994, namely $141,205.40, together with interest from 11 February 1994 at the rate of 7 per centum per annum.

I certify that this and the

preceding pages are a true

copy of the Reasons for

Judgment of the Court

Associate:

Dated:

Counsel for the appellants : Mr D Quick QC with

Mr PA Heywood-Smith

Solicitors for the appellants : Johnston Withers

Counsel for the respondent : Mr J Sackar QC with

Mr I Marshall

Solicitor for the respondent : David M Leydon

Dates of hearing : 5 & 6 September 1996

APPENDIX

COMMONWEALTH BANK OF AUSTRALIA

REDUNDANCY REDEPLOYMENT AND RETRENCHMENT AGREEMENT 1990

REDUNDANCY, REDEPLOYMENT AND RETRENCHMENT AGREEMENT 1990

The new Redundancy, Redeployment and Retrenchment

Agreement 1990 applies to all Commonwealth Bank

staff, including former SBV staff. This over-award

agreement is based on banking industry standards, while

retaining the consultative mechanisms which are a feature

of the industrial relationship between the CBOA and

the Bank.

The first priority of the Agreement is the protection of

jobs. Where this is not possible, improved severance payments

apply. The key points are highlighted below. Full

detail of the Agreement are documented inside.

Severance Pay

7 weeks salary for the first year of service (pro-rata for less than one year)

3 weeks salary for each additional completed year of service

Maximum severance payment equal to 79 weeks salary (excludes notice period)

Salary to be based on actual salary

Notice Period

6 weeks notice with an extra 3 weeks notice for members with 25 or more years service. The affected member or the Bank may decide that the notice period be paid out.

Concessional Lending

Members aged under 55 years at date of retrenchment can continue their concessional SHL, Mastercard/Bankcard for nine months.

Members aged 55 years and over are entitled to the usual retired officer benefits.

Redeployment

Members may be redeployed to a directly comparable position without loss of salary or regular allowances. Members may be offered redeployment to a position at a lower level, but will receive full income maintenance.

This Redundancy, Redeployment and Retrenchment Agreement is

legally binding on the Commonwealth Bank only where

CBOA members are retrenched.

Non-CBOA members may not be protected.

(a) ARRANGEMENT

This Agreement is arranged as follows:

Subject Matter . . . . . . . . . . . . . . . . . . Clause

Additional Benefits . . . . . . . . . . . . . . . (k)

Application . . . . . . . . . . . . . . . . . . . (b)

Arrangement . . . . . . . . . . . . . . . . . . . (a)

Consultative Processes . . . . . . . . . . . . . . (d)

Definitions . . . . . . . . . . . . . . . . . . . (c)

Leave and Expenses to Seek Employment . . . . . . (l)

Other Entitlements . . . . . . . . . . . . . . . . (j)

Moving Household . . . . . . . . . . . . . . . . . (m)

Notice . . . . . . . . . . . . . . . . . . . . . . (g)

Redeployment . . . . . . . . . . . . . . . . . . . (e)

Selection for Retrenchment . . . . . . . . . . . . (f)

Severance Payments . . . . . . . . . . . . . . . . (h)

(b) APPLICATION

This Agreement between Commonwealth Bank of Australia (Bank), Commonwealth Bank Officers' Association and Australian Bank Employees' Union shall apply to members of the Unions employed by the Bank under the Commonwealth Bank of Australia Officers' Award 1990 (Award) and should 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 redeployment situations.

A key objective of this Agreement is to minimise the potential for industrial disputation.

For the purposes of this Agreement:

(i) "Allowances" for the purposes of subclause (e) only means payments other than salary (e.g. shift loadings) being received on a regular basis that would normally continue during a period of annual leave for an officer at the relevant time.

(ii) "Directly comparable position" means a position which is at the same classification within the Bank, which does not entail a change of duties significant enough as to be unreasonable in the circumstances of the skills [after training in terms of subclause (e)(viii)] and abilities of the officer concerned and which is at the same location or at another location which is within reasonable commuting distance.

(iii) "Redundancy" means a position redundancy - where work (or a major portion of it):

(1) is no longer required to be performed;

(2) is to be performed at a new location which requires a change in residence of the officer concerned; or

(iv) "Retrenchment" means the termination of employment of an officer as the result of redundancy.

(v) "Salary" for the purposes of this Agreement with the single exception of subclause (e), means the sum of annual rate of salary and skill utilisation loading as defined by clauses 8 and 10 of the Award together with payments other than salary (e.g. shift loadings) being received on a regular basis that would normally continue during a period of annual leave for an officer at the relevant time. (Note: Salary in the context of this subclause does not include performance payments to assistant managers and managers in terms of clause 8(d) and 8(f) of the Award.)

(vi) "Salary" for the purposes of subclause (e) only means the sum of annual rate of salary and skill utilisation loading as defined by clauses 8 and 10 of the Award. (Note: Salary in the context of this subclause does not include performance payments to assistant managers and managers in terms of clauses 8(d) and 8(f) of the Award.)

(vii) "Service" means continuous service with the Bank and includes previous continuous service with the State Bank of Victoria (SBV) in respect of an officer employed by the SBV who transferred to the Bank on 1 January 1991.

(viii)"Week's Salary" means 50% of an officer's fortnightly salary as calculated by reference to clause 11(b) of the Award and subclause (c)(v) of this Agreement.

(d) CONSULTATIVE PROCESSES

(i) When the Bank commences to review a work area, practice or function that could give rise to redundancy or redeployment situations, the Bank will inform the Unions and make its representatives available for discussions on the proposals.

(ii) Recommendations resulting from the review in terms of subclause (d)(i) and details of any proposed changes to the work area, functions or practices shall be conveyed to the Unions prior to any final decisions being taken. At this stage, the Bank shall supply to the Unions, details of the staffing structure applicable immediately prior to the commencement of the review and an explanation of the expected impact on that structure of the review findings.

(iii) The Unions shall have the opportunity to comment on the review recommendations within a reasonable time (generally within two working weeks) of the explanation given in terms of subclause (d)(ii).

(iv) Once the initial review findings and any comments by the Unions have been examined by the Bank, the Unions shall be informed of the Bank's final decision, redeployment prospects and the potential for retrenchments in terms of subclauses (e) and (f).

(v) The Unions accept the confidentiality of information provided by the Bank in terms of this clause and will not divulge any detail which relates to individual officers until after the Bank has notified the officers concerned.

(e) REDEPLOYMENT

(i) Where redundancy situations occur, the Bank will make reasonable efforts to redeploy the officers concerned. These efforts will be assisted by taking maximum advantage of normal staff attrition and curtailing recruitment wherever practicable.

(ii) All due consideration will be given by the Bank to filling vacant positions with suitably qualified officers whose current positions have been declared redundant.

(iii) An officer whose position is declared redundant shall not be entitled to the provisions in subclauses (g), (h), (j), (k), (l), and (m) of this clause if he/she declines an offer of a directly comparable position as defined by subclause (c)(iii).

(iv) Where alternative employment within the Bank is offered;

(1) to a directly comparable position, the Bank's normal transfer conditions will apply;

(2) in all other cases, at least two weeks will be allowed for the officer to decide whether or not to accept the offer.

(v) Where an officer is offered a directly comparable position his/her actual salary and allowances shall not be reduced.

(vi) If an officer accepts redeployment to an alternative position which is at lower level/classification he/she will retain his/her existing salary/status and associated benefits.

(vii) An officer who has accepted redeployment will continue to be paid allowances related to his/her former position which thereafter will be of fixed quantum (i.e. not subject to any further adjustment), less the amount of any allowances related to the position newly occupied, unless/until allowances related to the position newly occupied exceed allowances related to the officer's former position, in which case only those allowances related to the position newly occupied shall be paid.

(viii) The Bank will undertake where appropriate to train an officer whose position is declared redundant, in new skills to enable him/her to fill an alternative position.

(ix) An offer of redeployment to other than a directly comparable position, shall be in writing with the following information about the proposed job option:-

(1) location;

(2) level/classification;

(3) salary;

(4) principal duties.

(x) An officer accepting alternative employment within the Bank, other than to a directly comparable position, will be given a trial period of three months in his/her new position. Should either the Bank or the officer find that the employment is unsuitable, the officer's services may be terminated without loss of entitlement to retrenchment payments calculated to the date service actually ends.

(f) SELECTION FOR RETRENCHMENT

(i) Where an officer cannot be redeployed he/she shall be retrenched.

(ii) In a redundancy situation affecting a number of officers 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 retrenchments and determine which officers are to be retrenched.

(iii) Nothing in this clause shall prevent the Bank from inviting an officer to apply for retrenchment or an officer applying to be retrenched.

(iv) The Bank's right to select officers for retrenchment will be final.

(g) NOTICE

(i) An officer to be retrenched shall be given the maximum practical forewarning of likely retrenchment and the specific retrenchment date provided that he/she shall be given minimum written notice of retrenchment as follows:-

- Officers with less than 25 years service - 6 weeks notice.

- Officers with 25 or more years service - 9 weeks notice.

(ii) Where an officer elects to terminate his/her employment at the commencement of the period of notice, or during the period of notice; or the Bank so directs, the Bank will pay out the outstanding notice to a maximum of 6 or 9 weeks as appropriate in terms of subclause (g)(i).

(iii) The notice period in subclause (g)(i) shall be extended by any period of certified sick leave taken after notice has been given.

(iv) The Bank will establish appropriate counselling and information procedures and make these available to retrenched officers without charge. Such procedures shall provide for the officer to be advised of:

(1) the sums of money the officer would receive by way of severance payments, in lieu of notice and leave credits;

(2) entitlements and options under the relevant superannuation fund;

(3) alternative investment strategies which may be provided by way of access to Bank pre-retirement seminars.

(h) SEVERANCE PAYMENTS

(i) Upon termination through retrenchment, in addition to any payment in lieu of notice as specified in clause (g)(ii), an officer shall be paid a special lump sum severance payment in full settlement of all claims for additional notice, retrenchment pay, etc, calculated as follows:-

(1) Seven weeks salary for the first full year of service, or pro-rata for officers with less than one full year of service.

(2) Three weeks salary for each subsequent year of continuous service.

(3) Plus pro-rated payment for each completed month of service in the final year of service.

(4) The maximum payment under this subclause will be 79 weeks salary.

(ii) (1) The sum payable under subclauses (g)(ii) and (h)(i) shall not exceed the sum of pay that the officer would have earned if employment with the Bank had proceeded to the officer's sixty fifth birthday.

(2) An officer who has transferred from full-time to part-time employment will have his/her severance payments for part-time work based on hours being worked as the conclusion of each period of part-time employment. Calculation will be pro-rata on the full-time salary applicable to the level/classification of the officer immediately prior to retrenchment.

Severance payments related to periods of full-time employment will be based on the full-time salary applicable to the level/classification of the officer immediately prior to retrenchment.

Example 1

• Officer had 10 years part-time service, followed by 7 years full-time service.

• Number of hours per week worked immediately prior to transfer to full time duties (i.e. end of year 10) - 25.

• Level/Classification of officer at retrenchment - AMB.

Severance pay is calculated as follows:

10 years = 34 weeks x AMB full x 25 (pro

of severance time 38 rata

part-time service pay salary hours)

Plus...

7 years = 21 weeks x AMB full

of severance time

full-time service pay salary

Example 2

• Officer had 8 years part-time service, followed by 5 years full-time service, followed by 3 years part time service.

• Number of hours per week worked immediately prior to transfer to full-time duties (i.e. end year 8) - 27.

• Number of hours per week worked immediately prior to retrenchment - 18.

• Level/classification of officer at retrenchment GC4.

Severance pay is calculated as follows:

8 years = 28 weeks x GC4 full x 27 (pro

of severance time 38 rata

part-time service pay salary hours)

Plus...

5 years = 15 weeks x GC4 full

of severance time

full-time service pay salary

Plus...

3 years = 9 weeks x GC4 full x 18 (pro

of severance time 38 rata)

(j) OTHER ENTITLEMENTS

In addition to the severance payments provided by subclause (h), a retrenched officer shall also be paid:

(i) untaken annual leave and annual leave loading that would normally be paid in conjunction with such leave;

(ii) long service leave in terms of clause 29 of the Award;

(iii) superannuation benefits in terms of relevant superannuation fund rules;

(k) ADDITIONAL BENEFITS

(i) An officer who has attained the age of 55 years as at the date of retrenchment shall be entitled to those continuing benefits applicable to retired officers of the Bank.

(ii) An officer who has not attained the age of 55 years as at the date of retrenchment shall be entitled to:

(1) retain his/her existing housing loan on concessional staff terms for a period of nine months from the date of retrenchment. At the conclusion of this period, the loan will be refinanced without Bank charges and fees at the Bank's most favourable customer rate for new loans, except where the original concessional loan was approved prior to 7 April 1986 in which case the loan will be regarded as "regulated".

(2) retain any other loans, including Bankcard, Mastercard and VISA, on concessional staff terms for a period of nine months from the date of retrenchment.

(3) exemption from all bank fees and charges for a period of nine months from the date of retrenchment.

(l) LEAVE AND EXPENSES TO SEEK EMPLOYMENT

An officer who is retrenched shall, during the notice period, be entitled to:

(i) reasonable leave with full pay, as agreed between the parties depending on the circumstances including length of service, age and location of the officer, to attend necessary employment interviews. Unless the parties otherwise agree, an officer shall be entitled to up to a total of six days leave with full pay for such purposes; and

(ii) where expenses to attend such interviews are not met by the prospective employer, the officer shall be entitled to reasonable travel and incidental expenses in attending such interviews as agreed between the parties.

(m) MOVING HOUSEHOLD

Where in the opinion of the parties it is necessary for an officer who is redeployed or who is retrenched in terms of this clause to move residence, the following arrangements shall apply in respect of relocation expenses:

(i) For an officer redeployed within the Bank, the Bank will meet the cost of expenses, allowances and other benefits on the same basis applicable to Bank initiated transfers.

(ii) For an officer taking up a position outside the Bank:

(1) the Bank shall make a flat payment equivalent to that applicable under its Family/Officer Only Transfer Allowance policies;

(2) the parties may agree on additional reimbursement being made by the Bank depending on the circumstances of the relocation; paying regard to factors such as point of recruitment, location at time of separation from the Bank and major employment areas.

(iii) For an officer retrenched from a location other than his/her point of joining the Bank's service, the Bank will meet the cost of relocation expenses on the same basis as would apply to an officer initiated retirement on or after attainment of normal minimum retiring age.

(signed)

J D MURRAY

For and on behalf

of Commonwealth Bank

of Australia

8/1/91

(signed)

K C SCOTT

For and on behalf of

Commonwealth Bank

Officers Association

14/1/91

(signed)

L N HINGLEY

For and on behalf

of Australian Bank

Employees Union

11/1/91

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