Bank restructure leads to sex discrimination

Cases

Bank restructure leads to sex discrimination

The failure of a major bank to offer over one hundred bank employees voluntary redundancies following a massive organisational restructure because they were on maternity leave, or other extended leave, has been held to have been discrimination on the ground of sex.

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The failure of a major bank to offer over one hundred female employees voluntary redundancies following a massive organisational restructure because they were on maternity leave, or other extended leave, has been held to have been discrimination on the ground of sex.

The Human Rights and Equal Opportunity Commission also held that the women were discriminated against because they were unable to effectively compete for new positions within the restructured (Finance Sector Union v Commonwealth Bank of Australia [1997] HREOCA 12 (21 March 1997)).

The discrimination was held to have occurred during a massive organisational restructure beginning in 1992.

The employer utilised a ‘spill and fill’ system to fill the new positions from within the employer’s existing staff. The employer anticipated that the ‘spill and fill’ system would reduce national staff numbers by approximately 7,500.

In order to reduce the effects of the redundancies, most of the employer’s retail staff were invited to express interest in voluntary redundancy. The employer, however, excluded female staff members who were on extended leave from applying.

A number of the excluded employees consequently commenced a representative complaint of indirect sex discrimination under the Sex Discrimination Act 1984(Cth).

The claimants’ also claimed discrimination because of a requirement that, in order to take up a new position, an employee had to start within four weeks. This requirement, they argued, effectively excluded many of them from filling those positions.

The employer argued however that the four week requirement resulted from negotiations with the union, and that the four week requirement would only be imposed where necessary and the employer was willing to be flexible.

In regards to the principal claim of indirect discrimination, the employer argued that the women on extended leave were not entitled to apply for voluntary redundancy because they did not hold a position within the company at the time of the restructure. Furthermore, the claimants were guaranteed a job by law when they returned to work.

The employer also argued that the women had not suffered a detriment in that they, unlike other staff, had retained their positions, and that they had in fact been favourably treated.

The employer further argued that its failure to offer the women redundancy did not deny them a benefit, and therefore could not constitute discrimination within the terms of the Act.

Commission rejects employer’s arguments

The Commission held that the women were in fact denied a benefit because they were denied the opportunity to leave the employer before the restructure ushered in a ‘new’ bank. A new ‘bank’ which, the Commission stated, would not necessarily have comparable positions available by the time they were due to return from extended leave.

The Commission stated that the women were faced with the very real threat that they would be returning to a poor choice of employment in a Bank for which they no longer worked. Exclusion from voluntary retrenchment was therefore capable of constituting discrimination.

In regards to the four weeks notice requirement, the Commission held that this requirement would have been lawful except for the fact that the employer had failed to inform the claimants’ of the employer’s willingness to be flexible. By failing to inform, this requirement was held to have been discriminatory in effect.

Bank lodges appeal

This case has significant implications for the employer owing to the fact that approximately 2,400 women throughout Australia were in the same position as the complainants during the restructure.

It is understood that the Bank has appealed to the Federal Court.

This case highlights the need for employers to take into account possible discrimination implications, among many other things, when planning an organisational restructure.

 

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