Consultation required before redundancy

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Consultation required before redundancy

Source: Australian Business Ltd The AIRC has asserted its power to require an employer to consult with employees before putting redundancy plans into effect.

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Source: Australian Business Ltd

 

The AIRC has asserted its power to require an employer to consult with employees before putting redundancy plans into effect. Commissioner Lawson found jurisdiction existed for the commission to consider and determine the application of the Financial Services Union in relation to proposed redundancies at the Commonwealth Bank.

Background

The union applied under s170FB of the Workplace Relations Act 1996 for employment termination orders under s170FA.

Section 170FA gives the commission the power to make orders to give effect to Article 13 of the Termination of Employment Convention.

The union sought to restrain the bank from terminating approximately 500 employees from various non-managerial positions, Assistant Bank Manager positions and Human Resource positions.

In July 2002, the union submitted amended draft orders which sought to require the bank:

  • to not terminate employees without written consent of the employees concerned whose employment is regulated by the Commonwealth Bank of Australia Customer Service Division Enterprise Bargaining Agreement 2000 and/or the Commonwealth Bank of Australia Employees Award 1999 [Print J6280] on the grounds of redundancy arising from recent organisational reviews;
  • to not terminate employees without affording such employees a reasonable opportunity to consult with the union;
  • to provide the union with extensive relevant information in relation to management's organisational reviews; selection criteria; methods of selection; current policies in relation to selection, redundancy, redeployment and retrenchment; and detailed numbers and location of those to be retrenched from abolished and non-abolished positions; and
  • to provide an opportunity for real and meaningful consultation with the union on aversion, minimisation and mitigation measures.

The bank raised various jurisdictional objections to the union's application.

Consideration and conclusion

The jurisdictional objection to the union's application for orders required the commission to give ordinary meaning to the language adopted in the legislation.

Commissioner Lawson stated:

'While the merit of the arguments concerning whether the orders sought ought to be granted has not been determined, the material on the commission's file to date enables me to give clarity to the meaning of the words in Article 13 when applied to this case, hence:

  • I am satisfied that the employer (the Bank) is, and has "contemplate(d) terminations for reasons of an economic, technological, structural or similar nature ...";
  • I am satisfied that the bank has and continues to provide "... relevant information including the reasons for the terminations contemplated", and has to some extent provided information in relation to "... the number and categories of workers likely to be affected ...". What is clear is that the information supplied to date has not satisfied the union's demands for information; and
  • I am satisfied that the bank has given, and continues to offer opportunities for consultation with the employees' representatives. I am not satisfied that the consultations to date have exhausted the opportunities to confer on aversion, minimisation and mitigation strategies, nor have individual employees had opportunities for consultation about their individual selection for redundancy.'

… The union's concern at the bank's unwillingness to co-operate is understandable in the same way that the bank's reluctance to have the union co-determine this latest round of redundancies is understandable. The bank's jurisdictional challenge is more likely than not an attempt to obfuscate union activism into an area of management prerogative.'

Commissioner Lawson agreed with the views of Senior Deputy President Williams in 'Australian Dyeing' (at p.250) that the power conferred by s170FA to make an order "for the purpose of giving effect to the requirements" of the relevant Articles is a broad power "to be exercised objectively in all the circumstances of the particular case". He was not satisfied that the orders sought - with some amendment or removal go beyond the bare words of Article 13.

The commissioner found that jurisdiction existed for the commission to consider and determine the application of the FSU for the making of s170FA orders for the purpose of giving effect to Article 13 of the convention. 

Finance Sector Union of Australia v Re Commonwealth Bank of Australia Employees - Award 1999.

 
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