Commonwealth bank awas halted

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Commonwealth bank awas halted

The Federal Court of Australia has ordered the Commonwealth Bank of Australia to cease offering, entering into, formalising, or registering Australian Workplace Agreements (AWAs) with any of its employees.

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The Federal Court of Australia has ordered the Commonwealth Bank of Australia to cease offering, entering into, formalising, or registering Australian Workplace Agreements (AWAs) with any of its employees. The decision to grant an interlocutory injunction is significant in that the Court held that the union had not shown a sufficiently strong case to justify the grant of interlocutory relief on the ground that there had been a contravention of s298K. Rather, the injunction was granted as the Court found the union had an arguable case that the bank had coerced and knowingly misled employees and breached sections 298M, 170NC and 170WG(2).

This is another instance of litigation that has resulted from the introduction of Australian Workplace Agreements (AWAs) into a particular enterprise. In Finance Sector Union v Commonwealth Bank of Australia, [2000] FCA 1372 (28 September 2000), the task before Finkelstein J was to consider whether the unions raised serious questions to be tried that the bank had engaged in and were likely to continue to engage in conduct that was unlawful. If this was determined to be the case, his Honour then had to consider whether the balance of convenience, between the union and the bank favoured the granting of an interlocutory injunction. 

Background
 
The bank and the union are parties to the Commonwealth Bank of Australia Employees' Award 1999 and three agreements. The three 1998 enterprise bargaining agreements were certified under the Workplace Relations Act 1996and had a nominal expiry date of 2 April 2000. However, pursuant to the provisions of s170LX(2) the three 1998 agreements continue in effect until replaced by other agreements or awards. 

In the period between 6 March 2000 and 11 August 2000 the union and the bank met several times in an effort to reach an agreement on the terms of new agreements. Generally, the details are that the union sought an increase in wages of 6.5 per cent per annum, the bank responded with an offer of 2 per cent, before increasing that offer on 24 July 2000 to a 3 per cent increase in the first year and a 3.5 per cent increase in the second year. The union rejected this final offer. As a result the bank indicated that it would give serious consideration to other options. 

The nature of those options materialised on 1 September 2000 when the bank began to make offers to employees to enter into AWAs. The offer to enter into AWAs was portrayed by the bank as an opportunity for employees to accept the bank's offer of a 3 per cent wage increase in the first year followed by a 3.5 per cent increase in the second year. An offer that the bank claims it wanted to communicate to employees directly. Employees received a package of approximately 70 pages, the proposed AWA comprising 37 pages. 

In these proceedings the union sought an interlocutory order that the bank be restrained from offering an AWA to any of its employees, from entering into an AWA with any of its employees and from taking any step to make, formalise, file or seek approval of an AWA. 

Section 298K

Section 298K(1)(b) and (c) provide that employers must not for a prohibited reason injure or threaten to injure an employee in their employment; or alter or threaten to alter the position of an employee to the employee's prejudice. The prohibited reasons are outlined in s298L(1) of the Act. They include reasons that relate to an employee proposing to become or becoming an officer or member of an industrial association, or an employee being entitled to an industrial instrument. 

The circumstances in these proceedings were said to have brought about a contravention of s298Kbecause the bank was: 

  • injuring, or threatening to injure, employees in their employment (s298K(1)(b));

  • altering the position of employees to their prejudice (s298K(1)(c)); 

because those employees were: 

  • members of a union (s298L(1)(a)); or

  • entitled to the benefit of a certified agreement (s298L(1)(h)); or

  • because their union was seeking better industrial conditions (s298L(1)(l)). 

His Honour noted that freedom of association matters have in recent times been concerned with conduct that is directed to an individual employee and not to a class or section of the workforce. The view that there must be individual discrimination or injury caused before there can be a contravention of the section was adopted by the Full Court in BHP Iron Ore Pty Ltd v Australian Workers' Union [2000] FCA 430 (7 April 2000), It was noted that the facts of the BHP Iron Ore case were strikingly similar to this matter, in that the employer had offered individual contracts (not AWAs) and the relevant union in both instances claimed that this contravened s298K. The BHP Iron Ore case established that the offer of individual contracts of itself did not result in a contravention of s298K. Injury or disadvantage suffered by employees who remained on awards or certified agreements was not as a result of the offer, but was the product of the choice taken by employees to either take up or reject the offer. To this end Finkelstein J held it was 

...difficult to escape the conclusion that, for the reasons given by the Full Court in BHP Iron Ore, the union has not shown a sufficiently strong case to justify the grant of interlocutory relief on the ground that there has been a contravention of s298K. Although it will not often be appropriate for a judge to express any concluded view on the merits of a case when it is in its interlocutory stage, it seems to me that, having regard to the views that have been taken on the operation of s298K, it is likely that the union will fail on this branch of its case.

Section 298M and s170NC

The union also claimed that the bank contravened s298Mand s170NCof the Workplace Relations Act 1996. Section 298Mprovides that employer must not (whether by threats or promises or otherwise) induce an employee to stop being an officer or member of an industrial association. While s170NC(1), prohibits coercing others into agreeing or not agreeing to make, vary or terminate, or extend the nominal expiry date of, a certified agreement. As the same underlying facts are said to give rise to a breach of both provisions, his Honour held it to be appropriate to consider together whether the union had sufficiently made out a case that the bank had contravened both sections. 

In its relationship with the bank and bank employees, the union fulfils two roles. On the one hand it is the vehicle through which collective bargaining for the terms and conditions of employment takes place. While on the other hand it supports employees in their grievances with the bank. The union was of the view that for these reasons it has for some years been the bank's goal to reduce the power and influence of the union. The union was of the view that by offering AWAs the bank was attempting to diminish the power of the union. The bank denied that it was ever its intention that employees who accepted an AWA should leave the union. The bank submitted that its primary aim when making the AWA offers was to pass onto employees that which had been offered to the union on 24 July 2000, but which the union refused to accept. 

His Honour perceived the offer of AWAs to the bank employees to constitute a real threat to the union. This view was formed in light of public statements made by the bank during August and September 2000, which revealed that the bank was aware that a workforce on individual employment contracts would tend to leave their union. In this regard, his Honour found 

...a sufficiently arguable case that the bank sought to coerce the union to enter into new enterprise bargaining agreements to replace those whose nominal expiry date had passed. And the means by which the bank hoped to bring this about was to induce its employees to leave the union by offering them AWAs. There is then a serious question for trial whether s298Mand s170NChave been infringed.

Balancing the risks of granting or not granting an injunction

His Honour next needed to consider whether the union would suffer 'irreparable' harm were the injunction not granted and whether the bank would suffer 'irreparable' harm were the injunction granted. Finkelstein J reasoned that if the if the bank's conduct is allowed to go unrestrained, and the union does suffer a significant drop in membership as a result, it is difficult to see how the union would be able to recover its position, at least in the short term. Money would not be an adequate recompense. Therefore, his Honour was satisfied that the better course to follow was to preserve the current position by granting the injunction sought. Thereby creating a state of affairs in which effective relief could be awarded to either party at the conclusion of the trial. 

Section 170WG(2)

His Honour also made a passing reference to the union's final claim, that being that the bank breached s170WG(2). Section 170WG(2) provides that a person must not knowingly make a false or misleading statement to another person, with the intent of persuading them to make or not to make an AWA or ancillary document. The statements at the centre of the claim were contained in various letters and documents that preceded and accompanied the AWA offer. The general purport of these statements was that employees would be no worse off if they entered into an AWA. 

The union pointed to various aspects of the proposed AWA that involved a reduction of benefits. Having already found there to be a serious question for trial, his Honour did not consider this claim in detail, but did go on record that the union had an arguable claim that the bank employees had been misled by the statements. 

Conclusion

The Court ordered that the bank be restrained from offering AWAs to any of its employees, from entering into an AWA with any of its employees and from taking any steps to make, formalise, file or seek approval from the Employment Advocate of an AWA with any of its employees. The application for costs was reserved.

 

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