[2015] FWCFB 2029
FAIR WORK COMMISSION

DECISION


Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

Sch. 6, Item 4 - Application to make a modern award to replace an enterprise instrument.

Finance Sector Union of Australia
(EM2013/111)

COMMONWEALTH BANK OF AUSTRALIA EMPLOYEES AWARD 1999

BANKWEST/TRUSTWEST AWARD 1998

THE COLONIAL GROUP ENTERPRISE AWARD 2003

COMMSEC AWARD 2006

Banking finance and insurance industry

VICE PRESIDENT WATSON
DEPUTY PRESIDENT SMITH
COMMISSIONER LEE

MELBOURNE, 10 APRIL 2015

Application by Finance Sector Union of Australia for a modern enterprise award for Commonwealth Bank of Australia Employees Award 1999, BankWest/TrustWest Award 1998, The Colonial Group Enterprise Award 2003 and CommSec Award 2006 - case for modern enterprise award not established - application dismissed - Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, Schedule 6 Items 4, 6 and 9 - Fair Work Act 2009, s.134.

Introduction

[1] The Finance Sector Union of Australia (FSU) has made an application under item 4 of Schedule 6 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) for the Fair Work Commission to make a modern enterprise award to replace the following awards:

[2] In the alternative, the FSU seeks orders for the making of four separate modern enterprise awards to replace the CBA Group Enterprise Awards.

[3] At the hearing of this matter Mr J McKenna of counsel appeared for the FSU and Mr D Perry of counsel appeared for the Commonwealth Bank of Australia Limited (CBA) and BWA Group Services Pty Ltd (BWA Group).

The Legislative Task

[4] The role of the Commission in an application to make a modern enterprise award is governed by sub-item 4(5) of Schedule 6 to the Transitional Act which provides:

[5] It is also necessary to consider the modern enterprise awards objective: Item 6 of Schedule 6 of the Transitional Act. This is a legislative requirement for the Commission to recognise, in the context of the modern awards objective and the minimum wage objective, that modern enterprise awards may provide terms and conditions tailored to reflect employment arrangements that have been developed in relation to the relevant enterprises. The modern awards objective, set out in s.134 of the Fair Work Act 2009 (the Act), is as follows:

[6] We turn to consider these factors in relation to the circumstances of this case.

The circumstances that led to the making of the enterprise instrument rather than an instrument of more general application: Item 4(5)(a)

[7] Each of the CBA Group Enterprise Awards has a unique history and has evolved through a number of variations, the majority of which were consensual.

CBA Award

[8] The terms of the CBA Award may be traced back to the Commonwealth Banking Corporation Circular Instructions (Staff Instructions), developed between the Union (through its predecessor) and the CBA over around 75 years.

[9] Subsequently, salaries for banking and managerial employees were regulated through consent awards approved in 1986 and 1990. 1 The general terms and conditions of employment of CBA employees became award covered upon the approval of the Commonwealth Bank of Australia Officers Award 1990, a consent award. This award followed the acquisition by the CBA of the State Bank of Victoria and was based largely upon the conditions contained in the Staff Instructions.

[10] The Commission subsequently issued other consent awards in 1992 which were to be read in conjunction with the 1990 award. 2 The 2006 award arose from the award simplification process conducted in accordance with the Workplace Relations Act 1996.

CommSec Award

[11] CommSec is a subsidiary of the CBA. CommSec was award-free until the CommSec Award 2006 was made by consent as part of a resolution of a dispute between the FSU and the CBA. There have been few amendments to that award since that time. The FSU submits that the CommSec Award, being a recently made consent award, retains relevance and significance for CommSec and its employees, as well as the CBA and the FSU.

BankWest Award

[12] The employing entity for BankWest has been through a number of variations and transmissions. The current BankWest Award has its foundations in the Bank Officials’ and Messengers’ (The Rural and Industries Bank of Western Australia (Federal) Award 1983. The 1983 award was a consent award which bound the Rural and Industries Bank of Western Australia, the entity which has now become BankWest.

[13] Over the ensuing years there were a number of changes to the 1983 award largely as a result of name changes and consent variations. The current BankWest Award was created in 1999 during the award simplification process. CBA acquired BankWest in 2008 which led to a further change in the employing entity, however the provisions of the BankWest Award continue to apply.

Colonial Award

[14] The Colonial Award is derived from the Colonial Enterprise Award 1996. The 1996 award was a consent award negotiated by the FSU and Colonial to meet the needs of the combined business of the Colonial Group.

[15] The 1996 award was varied following Colonial’s acquisition of the State Bank of NSW. The FSU note that it was not set aside despite the prospect of Colonial employees being covered by the CBA Award 1999. The 1996 award was subsequently simplified following a consent application by Colonial and the Union leading to the creation of the Colonial Award in 2003.

[16] The FSU submits that the underlying purposes for making the 1996 award have been reinforced throughout the subsequent changes to the Colonial Award and remain relevant.

Whether there is a modern award that would, but for the enterprise instrument, cover the persons who are covered by the instrument: Item 4(5)(b)

[17] Most of the persons covered by the enterprise awards would be covered by the Banking, Finance and Insurance Award 2010 if the enterprise awards are not modernised. The FSU submits that it is unclear whether some senior employees would be covered because of the limits to the level 6 classification in that award. The CBA and BWA Group submit that as only high income earning, senior employees would be excluded from coverage under the industry award this factor should be given little weight.

[18] The employers submit that already a large number of employees within the CBA group are covered by the industry award and the effect of granting the application will be to maintain a number of different safety net awards when logic and efficiency suggest that there should be only one.

The content of the modern awards referred to in paragraph (b): Item 4(5)(c)

[19] The FSU submits that the terms of the industry award are well settled.

[20] The FSU submits that the industry award was made in circumstances where it was expressed not to cover employees covered by an enterprise instrument. The FSU further submits that the content of the industry award is materially different to the CBA Group Enterprise Awards and is not adapted to the CBA’s business in a number of key respects.

[21] The CBA and BWA Group submit that the industry award has comprehensive application in the industry and is the appropriate award to cover CBA Group employees.

The terms and conditions of employment applying in the industry: Item 4(5)(d)

[22] The FSU submits that the identification of specific common terms and conditions across the banking industry is difficult, as almost all banks are covered by enterprise awards which differ in important respects. It estimates that about two thirds of employees are covered by enterprise agreements (in which it is involved) which utilise an enterprise award rather than the industry award.

[23] The CBA and BWA Group submit that the terms and conditions applicable to the industry are disparate. They are not reflected in the terms of the CBA Group Enterprise Awards, hence CBA have been active in agreement making and have a range of terms and conditions contained in more recently made agreements.

The extent to which the Award provides enterprise-specific terms and conditions of employment: Item 4(5)(e)

[24] The FSU submits that there are key differences between the industry award and the CBA Award and each of the CBA Group Enterprise Awards, which it set out in annexures to the witness statement of Mr Donald Peddie, a National Industrial Officer employed by the FSU. It is submitted that each of those differences properly reflect enterprise specific terms. It is further submitted that many of the enterprise specific terms and conditions contained in the CBA Group Enterprise Awards are tailored to employment arrangements that have been developed over a period of time to meet the particular needs of that enterprise and reflect the way in which the enterprise operates.

[25] The CBA and BWA Group submit that the FSU has not provided evidence to support its assertion that terms and conditions are tailored to each organisation’s working arrangements. The CBA and BWA Group further submit that there is no evidence that there has been any attempt to draft the proposed award having regarding to the current requirements of the employers and employees who would be covered by it, and that it includes the continuation of a number of obsolete terms and conditions.

[26] We make the observation that such a criticism of the FSU cannot be properly sustained as the CBA and BWA Group decided against engaging with the FSU in an attempt to reduce coverage and eliminate obsolete provisions. This is not a criticism of an objective not to have a modern enterprise award but such a strategy cannot then be turned into a failure on behalf of the FSU.

The likely impact on the persons covered by the Awards, and the persons covered by the modern awards referred to in paragraph (b), of a decision to make, or not make, the modern enterprise award: Item 4(5)(f)

[27] The FSU submits that the proposed modern enterprise award will have no impact upon the viability of the employers. It is fearful that the safety net for employees will be reduced if the enterprise awards are not modernised and may prompt a reconsideration of some terms in future enterprise bargaining negotiations. It also considers that some senior employees will lose unfair dismissal entitlements and access to the dispute settlement provision of the Act.

[28] The CBA and BWA Group submit that the FSU has not put forward sufficient evidence to show that there will be a reduction in terms or conditions of employment or result in less favourable enterprise agreement outcomes for employees if the CBA Group Enterprise Awards are not modernised although we accept that this may be a possibility. The CBA and BWA Group submit that it is appropriate for there to be an industry wide safety net which would ensure that enterprise needs could continue to be met through enterprise agreements.

The views of the persons covered by the enterprise instrument: Item 4(5)(g)

[29] The FSU supports the modernisation of the CBA Group Enterprise Awards. It submits that it represents the views of the majority of employees covered by the CBA Group Enterprise Awards and relies on the results of research it commissioned in relation to employees of the CBA and BankWest.

[30] The research indicated that of the CBA employees who responded to the survey, 39 per cent considered the CBA Award to be more beneficial than the industry award, two per cent considered the industry award to be more beneficial, four per cent considered there to be no difference between the two awards and 55 per cent did not know.

[31] Of the BankWest employees who completed the survey, 31 per cent considered the BankWest Award to be more beneficial than the industry award, seven per cent considered the industry award to be more beneficial, three per cent were of the view there was no difference between the two awards and 59 per cent did not know.

[32] It is the position of the CBA and BWA Group that the CBA Group Enterprise Awards not be modernised. The CBA and BWA Group submit that the survey results show that a high number of employees who were surveyed either did not know whether the industry award was more or less beneficial or did not respond. Further, CBA and BWA Group note that there is no evidence of surveys of FSU members employed by Colonial or CommSec, and no evidence of the views of any CBA Group employees currently covered by the industry award that this has disadvantaged them.

Any other matter prescribed by the regulations: Item 4(5)(h)

[33] No other matters are prescribed.

Should a modern enterprise award be made?

[34] In a case such as this, we consider it important to assess whether a sufficient case has been established to justify the making of the enterprise award. Two critical considerations in this regard are an assessment of the alternative and the pattern of industrial regulation in the banking and finance industry.

[35] The industry is a large and important one covering a diverse range of large and small employers involved in a range of banking, finance and related activities. Most of the employees are white collar skilled and professional employees. When a Full Bench considered making an enterprise award for Bank of Queensland Agents it concluded as follows: 3

[36] With the opposition of the FSU, and based on this conclusion, the application was unsuccessful, and the Bank of Queensland Agents became covered by the industry award. Only the four large banks and the Reserve Bank remain covered by enterprise awards because an application to modernise them was made, with varying levels of agreement, shortly before the awards would have terminated on 31 December 2013 by operation of the Act.

[37] The FSU argues in this case that the enterprise award should be modernised and retained and the employers oppose this course. We have considered the evidence, the factors we are required to consider, and the overall circumstances, and we have concluded that a case for retaining a modern enterprise award has not been made out.

[38] The history of the award and its rationale considered against subsequent developments in enterprise agreements leads to the conclusion that the enterprise award does not advance the modern awards objective. The industry award is an appropriate safety net. It already applies to some employees within the CBA group.

[39] There is no demonstrable immediate impact on employees from the termination of the enterprise awards. Insofar as there may be issues as to the appropriate level of award and agreement coverage within the hierarchy of the bank, this can be addressed by the parties in bargaining. There is nothing inherently inappropriate about senior employees being outside the scope of the award, indeed the contrary is the case as the decision of Deputy President Smith in the 2012 award review makes clear. 4

[40] Because we cannot discern any real purpose in making the modern enterprise award, and it is likely to lead to unnecessary complexity in the system if we did, we have decided to refuse the application to modernise the awards.

Conclusions

[41] The application to modernise the various awards in the CBA group is dismissed for the reasons outlined above. Pursuant to Item 9 (3) of schedule 6 to the Transitional Act the Awards subject to this application terminate as at the date of this decision.

VICE PRESIDENT

Appearances:

Mr J McKenna of counsel for the Finance Sector Union of Australia.

Mr D Perry of counsel for CBA and BWA Group.

Hearing details:

2015.

Melbourne.

23 March.

Final written submissions:

CBA and BWA Group on 23 December 2014.

Finance Sector Union of Australia on 12 November 2014.

 1   See the Commonwealth Banking Corporation Staff (Salaries) Award 1896 and the Commonwealth Banking Corporation Managers (Salaries) Award 1990.

 2   See the Commonwealth Bank of Australia Officers (Enterprise Bargaining) Award 1992 and the Commonwealth Bank of Australia Officers (Enterprise Bargaining) (No. 2) Award 1992.

 3   [2010] FWAFB 3906.

 4   [2013] FWC 5482.

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