DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Commonwealth Bank of Australia
(AG2021/4666)

COMMONWEALTH BANK GROUP ENTERPRISE AGREEMENT 2020

Application for approval of the Commonwealth Bank Group Enterprise Agreement 2020.

[1] In a decision dated 23 June 2021, we considered an application by the Commonwealth Bank of Australia (CBA) under s 185 of the Fair Work Act 2009 (the FW Act) for approval of an enterprise agreement known as the Commonwealth Bank Group Enterprise Agreement 2020 (Agreement). We concluded that, save for a concern that was identified at [117] of the decision, we were satisfied that the Agreement met the approval requirements in the FW Act (see [152]). We afforded CBA and the other employers an opportunity to submit a further undertaking.

[2] The concern we had identified was that the employers had not taken all reasonable steps to explain the Agreement and the effect of its terms, insofar as document ‘GG’ and the statements referred to at [112] of our earlier decision were inaccurate, because they conveyed to employees that certain pay increases were guaranteed by the Agreement when in fact they are not. We noted at [118] that in order to meet our concern, the undertaking would need to make good the representations that we had identified.

[3] On 28 June 2021, the employers submitted an undertaking to grant wage increases to employees in the amounts that had been referred to in the representations that were the subject of our concern. On 29 June 2021, we sought the views of the Finance Sector Union of Australia (FSU) about the undertaking, as required by s 190(4) of the FW Act. On 2 July 2021, the FSU submitted its views to the Commission. It contended that there were four reasons why the Commission should conclude that the undertaking did not meet the concern identified at [117] of our earlier decision.

[4] First, the FSU noted that the undertaking had the effect of excluding from the wage increases those employees who were not employed by a group company on 1 July 2020, whereas the concern expressed by the Full Bench identified no such limitation. The employers had explained that the reference to employment as at 1 July 2020 was included in the text of the undertaking in order to reflect the nature of the pay increase under clause 9.2(a) of the Agreement, which is stated to be based on an employee’s annual salary on 30 June 2020. In this regard, clause 9.2 of the Agreement provides:

“If you meet the requirements set out in clause 9.1, subject to the remainder of this clause, your annual Salary increase will be:

a. 3.25% effective 1 July 2020 (based on your annual Salary as at 30 June 2020); and

b. 3.00% effective 1 July 2021 (based on your annual Salary as at 30 June 2021).”

[5] In correspondence to the parties on 6 July 2021, we noted that clause 9.1 of the Agreement deals with the conditions that employees must meet in order to receive an annual salary increase, and that clause 9.2 on the other hand concerns the quantum of the increases, the timing of those increases, and the extent to which they may be offset by other payments. We stated that the words in parentheses that follow the prescribed increase appeared to us to concern back payment and to confirm that the increase will relevantly be based on employees’ salaries dating back to 30 June 2020. It did not appear to us that the words in the parentheses constituted a further condition on eligibility, such that to obtain the increase in subparagraph (a), an employee would need to have been employed on 30 June 2020.

[6] The second matter raised by the FSU was that the undertaking was deficient because it did not afford the wage increase to employees on Australian Workplace Agreements (AWAs) and Individual Transitional Employment Agreements (ITEAs). The FSU said that these employees had received the inaccurate explanations of the Agreement identified by the Full Bench and had participated in the vote on the Agreement. We did not agree that the undertaking was deficient in this respect. Employees on AWAs and ITEAs are not covered by the Agreement, and were not eligible to participate in the vote. The concern of the Full Bench expressed at [117] does not extend to such employees. There was no obligation on the employers to explain the terms of the Agreement to persons not covered by it.

[7] The third matter raised by the FSU was that the undertaking should guarantee both of the pay increases contemplated by clause 9.2 of the Agreement, rather than just the first of these. The FSU referred to certain statements that had been made by Mr Clift during one of the ‘question and answer’ sessions explaining the terms of the Agreement. However, we considered these statements at [107] of our earlier decision. They were subject to the caveat identified by the Full Bench at [108]. Our concern at [117] does not extend to the second pay increase in clause 9.2 of the Agreement.

[8] The fourth matter raised by the FSU was that the offset provision in sub-clause (d) of the undertaking went beyond the provision for pre-payment of partial increases found in clause 9.2 of the Agreement, and could allow the employers to offset increased wages resulting from reclassification or other performance based increases. We agreed that a modification was required to this sub-provision to align the undertaking with clause 9.2 of the Agreement.

[9] In our correspondence of 6 July 2021, we advised the employers and the FSU that in order to meet the concern we expressed at [117] of our earlier decision, the undertaking would need to address the first and fourth matters raised by the FSU. We attached a revised copy of the undertaking, suggesting relevant amendments.

[10] On 8 July 2021, the employers submitted a revised undertaking which removed the requirement that in order to receive the wage increase, employees had to have been employed by a group company on 1 July 2020. It also amended sub-clause (d) to align the undertaking with the offset arrangements in clause 9.2 of the Agreement.

[11] Two versions of the revised undertaking were submitted. Version 1 stated that the wage increase provided by the undertaking would apply to employees employed by a group company on 30 March 2021, this being the date on which the vote on the Agreement had closed. The employers submitted that the Commission should accept this version of its proposed undertaking because employees employed after the vote on the Agreement could not have been affected by the representations that were the subject of the concerns identified at [117] of our earlier decision. The employers submitted however that, should the Commission not consider version 1 of the undertaking to meet the concern, they would offer version 2, under which employees employed by a group company on the date the Agreement commences operation will receive a salary increase in the amounts set out in the undertaking.

[12] We sought the views of the FSU on the revised undertaking. In a submission dated 12 July 2021, the FSU contended that the first version of the undertaking could not meet the concern of the Full Bench, because it pertained only to the persons to whom a misrepresentation was made, rather than the nature of the misrepresentation, which was that all employees would receive a guaranteed wage increase. The FSU submitted that employees had been told that ‘anyone’ within particular salary ranges would receive certain increases. 

[13] Our outstanding concern relates to the employers’ explanation to employees of the terms of the Agreement. It is necessary to consider the nature of the representations that are the subject of our concern. As we explained at [116] of our earlier decision, the relevant statements had represented to employees that the Agreement would bring guaranteed wage increases in the amounts indicated, and that despite other explanations adverting to conditions that attached to the increases, employees may simply have believed what they read in document ‘GG’ or heard in the videos. Employees may have voted for the Agreement reasonably believing that the wage increases were assured, when this was not the case. It is likely that employees, when considering these representations, were primarily concerned with the implications for their own personal circumstances. Version 1 of the undertaking would give effect to an expectation held by employees that their own wage increase was guaranteed. However, employees’ interest in the representations may have extended beyond this. They were voting on a collective agreement that would establish terms and conditions of general application, and it cannot be precluded that employees were concerned also with the significance of the representations for the general wages framework that the Agreement would introduce with effect from the commencement of its operation. For these reasons, version 1 of the undertaking would leave us with some uncertainty as to whether the undertaking fully met our concern.

[14] Version 2 of the undertaking on the other hand meets our concern. It makes good what was represented to employees. It guarantees the relevant pay increases for all employees covered by the Agreement upon its commencement.

[15] The revised undertaking contains a new sub-provision (e) which states that the wage increases provided for in the undertaking will be based on an employee’s salary on 1 July 2020 or the date of commencement of the employee’s employment in a position covered by the Agreement, whichever is later. The FSU contended that this provision was unnecessary given that sub-clauses (c) and (d) of the undertaking already deal with the backdating of pay increases. However, we consider that sub-provision (e) usefully confirms how the undertaking is to operate. Backdating of payments could not reasonably be understood to apply to a period before an employee’s employment had commenced. The date of 1 July 2020 represents the earliest reach of the back payment. Persons first employed after this date receive back payment to the date on which they commenced employment. In our view, subparagraph (e) of the undertaking is consistent with the intended operation of the backdating arrangements in clause 9.2 of the Agreement.

[16] We are satisfied that version 2 of the undertaking meets the concern we expressed at [117] of our earlier decision, and that it will not cause financial detriment to any employee covered by the Agreement or result in substantial changes to the Agreement. In our earlier decision, we recorded our satisfaction that the other undertakings offered by the employers met relevant concerns we held, and that they accorded with the requirements of s 190(3). We are also satisfied that the undertakings, taken together, do not result in substantial changes to the Agreement. A copy of the undertakings is attached to this decision. The undertakings are taken to be terms of the Agreement.

[17] Subject to the undertakings, we are satisfied that each of the requirements of ss 186, 187 and 188 as are relevant to this application for approval has been met.

[18] As noted in our earlier decision, a small number of employees did not receive the notice of employee representational rights (NERR) within 14 days of the notification time, did not receive the written text of the Agreement during the access period for the Agreement, and were not provided with the details of the vote by the start of the access period (see [150]). We consider however that the employers took all reasonable steps to do the things required by ss 173 and 180. Had we reached a different view, we would have been satisfied that these matters constituted minor procedural or technical errors for the purposes of s 188(2)(a), and that the employees covered by the Agreement were not likely to have been disadvantaged by them. We would have been satisfied that the Agreement had been genuinely agreed within the meaning of s 188(2). However, it is not necessary for us to exercise our discretion under this provision.

[19] The FSU has given notice under s 183 of the FW Act that it wants the Agreement to cover it. In accordance with s 201(2), and based on its declaration, we note that the Agreement covers the FSU.

[20] The Agreement was approved on 14 July 2021. The nominal expiry date of the Agreement is 30 June 2022.

DEPUTY PRESIDENT

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Annexure A