Australia and New Zealand Banking Group Limited

[2015] FWCA 8422

[2015] FWCA 8422 [Note: a correction has been issued to this document]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Australia and New Zealand Banking Group Limited
(AG2015/3646)

Banking finance and insurance industry
COMMISSIONER LEE	MELBOURNE, 10 DECEMBER 2015

Application for termination of an enterprise agreement - Whether agreement which had a nominal expiry date of 12 February 2001 should be terminated - Whether termination of the agreement is contrary to the public interest - Whether it is appropriate to terminate the agreements - Approach to considering whether it is appropriate to terminate agreements – Approach adopted in Aurizon [2015] FWCFB 540 applied.

Introduction

[1] Australia and New Zealand Banking Group Limited (ANZ) have applied under s. 225 of the Fair Work Act 2009 (the Act) to terminate an enterprise agreement that has passed its nominal expiry date pursuant to s.226 of the Act. The Agreement is the ANZ/FSU Agreement 1998 (the Agreement).The Finance Sector Union of Australia (FSU) oppose the application to terminate the Agreement.

[2] The application was listed for hearing on the 3 September 2015. Mr. Tamvakologos was given permission to appear on behalf of ANZ. Mr R Chaudry represented the FSU.

[3] Evidence was provided by Mr. David Natenzon, Manager and Senior Corporate Lawyer, Global Employee Relations at ANZ. The FSU did not provide any witness evidence in the matter.

2. Background and Evidence

Background to the making of the Agreement

[4] The Agreement passed its nominal expiry date over 14 years ago on 12 February 2001. The Agreement currently applies to approximately 8% of the ANZ workforce and covers only Group 1, 2 and 3 employees. Group 1 employees are Senior Executive employees. Group 2 employees are Executive employees and Group 3 employees are Senior Managers. The other 92% of the ANZ workforce are in roles classified at Group 4, 5 or 6. That is Manager, Senior Officer or Officer respectively. These employees are covered by the ANZ Enterprise Agreement 2013-14 (Australia) (the 2013 Agreement) which is not presently subject to an application to terminate.

[5] The Agreement was made in 1998 with the FSU under the Workplace Relations Act 1996. Concurrently with making the enterprise agreement, the ANZ made an enterprise award, the Banking Services ANZ Group Award 1998 (the Award) as part of an award simplification process. The two instruments were designed to be read in conjunction and were expressed to cover all ANZ employees. Further, the ANZ and FSU agreed at the time to include any matters in the Award that were determined by the AIRC to be not “allowable matters” in the Agreement.

[6] The Agreement was certified by the Australian Industrial Relations Commission under section 107LT of the Workplace Relations Act 1996 (Cth) on 12 August 1998. 1

[7] The Agreement is a “collective agreement-based transitional instrument” for the purposes of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth). 2 The Agreement is a transitional instrument which continues operation under the Transitional Act. 3

[8] Item 16 of Schedule 3 to the Transitional Act has the effect that each reference in Subdivision D, Division 7, Part 2-4 of the Act (which includes sections 225 to 227) to an “enterprise agreement” includes a reference to a “collective agreement-based transitional instrument” (i.e. the Agreement). For this reason, an application to terminate the Agreement is properly made under section 225 of the Act, which must be read consistently with Item 16 of Schedule 3 to the Transitional Act.

Recent developments

[9] The Award was recently terminated by an Order of the Fair Work Commission on 10 April 2015 as a result of the Full Bench refusing an application by the FSU to modernise the Award. Consequently, the Award and the Agreement can no longer be read together as originally contemplated by the parties. This is disputed by the FSU who submit that the Agreement can continue to operate independently notwithstanding the termination of the Award. On cross examination Mr. Natenzon conceded that the termination of the Award did not affect the operation of the Agreement in a legal sense but maintained that in a practical sense it did as the two instruments were always intended to be read in conjunction.  4 Mr. Natenzon stated that the ANZ see the agreement as “…an outdated industrial instrument. It’s 14 years old, it doesn’t have any practical work to do, and from our perspective this is really the logical next step following the Commission’s decision to terminate the ‘98 award, which was always intended to be read in conjunction with this instrument.5”

[10] Since the nominal expiry of the Agreement in 2001, ANZ and its employees including those represented by FSU have not made an enterprise agreement covering Group 1, 2 and 3 employees. The ANZ and the FSU have made two enterprise agreements which cover Group 4, 5 and 6 employees only. Both of those Agreements operate to the exclusion of any prior Award or Agreement.

[11] ANZ has adopted a consistent position since 2001 that Group 1, 2 and 3 employees should be Award and Agreement free because of the seniority of their roles. According to the minutes of a bargaining meeting included in the evidence of Mr. Natenzon, the FSU advised during a bargaining meeting in 2009 that “it could probably live with” the proposed enterprise agreement covering only Group 4, 5 and 6 employees. 6 I note that the FSU sought to cast some doubt over these minutes through the cross examination of Mr. Natenzon 7 However no evidence was forthcoming from the FSU to suggest that they had in anyway agitated for bargaining in respect of the Group 1, 2 or 3employees. Irrespective, the FSU agreed that there was no bargaining taking place in respect to those employees.8

Effect on employees if the agreement is terminated

[12] The evidence of Mr. Natenzon is that the termination of the Agreement is likely to have no practical effect on the terms and conditions of employment of Group 1, 2 and 3 employees. The Agreement deals with limited matters only and many of the clauses are broad statements or commitments by the parties and do not confer a substantive entitlement.

[13] The evidence of Mr. Natenzon is that the National Employment Standards (NES) and the contractual provisions applying to Group 1, 2 and 3 employees at ANZ give equivalent or more generous entitlements overall compared to the Agreement.  9 Current incomes earned by Group 1, 2 and 3 employees significantly exceed the rates in the Agreement. For example, a Group 2 role typically attracts a minimum income of $240,000.00 per annum which is $167,161.00 above the maximum rate of pay in the Agreement. A Group 3 role typically attracts a minimum income of $196,000.00 per annum which is $123,161.00 above the maximum rate of pay in the Agreement. The redeployment and retrenchment clause which provides for substantially more beneficial entitlements than the NES, does not apply to Group 1, 2 and 3 employees.

[14] The evidence of Mr. Natenzon was that there is no right for ANZ to change the contracts of Group 1, 2 and 3 employees without the agreement of the person subject to it. 10 On cross examination Mr. Natenzon was handed a copy of a contract that related to a Group 3 position that was issued in June 2006. Ultimately that document was not tendered into evidence. On re-examination, Mr. Natenzon confirmed that the contracts that currently cover Group 1, 2 and 3 employees do not allow for their variation without the employees consent.11
Mr. Natenzon’s evidence is that there is no record of any Group 1, 2 or 3 employee using the dispute settlement term in the Agreement since 2010, that the Agreement contains terms that are non-compliant with the Fair Work Act 2009 and that the Agreement contains terms that can no longer be given effect following the termination of the Award.

[15] The FSU submit that if the application is granted, the relevant employees will have no industrial Agreement or Award regulation of their employment and will subsequently lose long established protections and benefits, be deprived of important consultation rights, lose external dispute settlement procedures and important elements of recognition of the role of the FSU in the workplace in respect of such employees will be lost. The FSU also make the point that there is no undertaking from the ANZ to maintain the rights and benefits and that there is no security or certainty that the contractual arrangements applying to the relevant employees provide for adequate or equivalent protections.

[16] The FSU made reference to instances of what they claimed was poor consultation by ANZ during major workplace restructures earlier this year as demonstrating the need for the protections around consultation enshrined in the Agreement. However, no evidence was provided by the FSU in support of these claims which were disputed by ANZ. Mr. Natenzons’ evidence was that there was communication with the FSU the day before the changes referred to in paragraph 32 of the FSU submissions were announced. 12 Mr. Natenzon gave evidence that despite the conflict over the changes, the FSU did not escalate the dispute through the dispute resolution procedure in the 2013 Agreement.13 There was no evidence from the FSU that they relied on the consultation provisions or the dispute settlement provisions in the Agreement to deal with the dispute, despite one of the changes impacting on a number of Group 3 employees. 14

[17] The FSU submit that the removal of the representation and dispute resolution processes via the termination of the Agreement will mean that affected employees will have to resort to financially taxing legal representation in disputes and cases involving disciplinary action. The FSU submit that this is an inappropriate and unfair imposition to place on employees in these circumstances.

The views of employees

[18] ANZ gave evidence that it sought the views of employees covered by the Agreement in relation to the application. In June 2015 the company published a new item on the banks intranet site setting out information pertaining to the application in the form of a number of FAQ’s and answers. There were 2635 visits to that page by ANZ employees between 12 June 2015 and 26 June 2015.  15 ANZ also asked employees covered by the Agreement to submit their views, comments or questions about the application by contacting the global employee relations team via a designated in box. No feedback was received, with the exception of five employees querying whether the Agreement would reduce their redundancy entitlements.

[19] The FSU did not provide any direct evidence as to the views of employees. It is clear that the FSU oppose the termination of the Agreement and they submit that their position as the industrial representative of employees should be considered good evidence of the views of employees.  16

The views of employee organisations

[20] Mr. Natenzon gave evidence that the bank consulted the FSU on their decision to make this application and subsequently that the FSU requested ANZ delay making the application to give it time consult with its members. The ANZ did delay the application for a short time as a result. The day after the ANZ made the application the FSU published a flyer with the heading “ANZ attacks redundancy provisions” the flyer was handed out at the ANZ docklands building. The publication states “ANZ has said that it will today apply to terminate the enterprise agreement that has provided legal protection for the redundancy rights of group 1, 2 and 3 staff for the past 18 years.” The flyer also referred to effects of loss of the Agreement including: loss of unfair dismissal protections, loss of access to dispute settlement system, loss of safety net entitlements and loss of transferable rights in the event of transmission of business. However, it is not in dispute that the Group 1, 2 and 3 staff are not entitled to the redundancy provisions in the agreement. The error in the claim the entitlements would be lost was pointed out to the FSU by the ANZ. The FSU subsequently published a clarification acknowledging the Agreement does not confer redundancy entitlements on Group 1, 2 or 3 employees.

[21] Evidence was admitted consistent with a previous decision which provided evidence of the density of FSU membership at the Group 1, 2 and 3 Level. The evidence on this point was dealt with in confidential hearing. It was clear from the material produced by the ANZ that the Union represent only a small minority of employees within the combined Group of 1, 2 and 3 employees.  17 The FSU did not seek to contradict that material.

[22] The FSU submitted that they oppose the decision to terminate and relied on the matters referred to in their submission at paragraph 32 (the allegations of ANZ failing to consult) as well as the matters raised in the letter from Ms. Jordan of the FSU to Mr. Finger of the ANZ dated 17 June 2015. In that letter Ms Jordan stated as follows:

“The 1998 EBA continues to provide numerous entitlements and protections to the employees who are covered by it and its termination is likely to have significant effects on each of them, including but not limited to the loss of:

• Safety net entitlements enforceable under a workplace instrument



• General protections in respect of the exercise of those entitlements



• Access to the disputes settlement procedure under clause 18



• A transferable instrument



• Protection from unfair dismissal; and



• Appropriate recognition of the role of the FSU.”

[23] By way of conclusion, the FSU submitted as follows:

“It is the FSU’s submission that the Agreement acts as a bulwark against the exercise of powers unfairly by providing a number of significant protections and as such not in the public interest. Unlike Aurizon, there is no successor agreement to replace the Agreement and neither will ANZ’s economic performance or financial position be adversely affected if the Agreement is retained, even if the effluxion of time and individual contracts have made its operation largely secondary. However, even its operation as a secondary instrument of employment it still provides for historical industrial rights such as consultation between the employer and the union (on workplace issues) as well as union representation of employees subject to disciplinary proceedings. The termination of the agreement will mean that affected employees will have little security from management decisions and with such decisions not being challengeable under the NES. It is not appropriate to terminate the agreement.”

3. The Statutory Test

[24] The legislative mechanisms by which an enterprise agreement may be varied or terminated are dealt with in Division 7 of Part 2– 4 of the Act. Subdivision C of Division 7 sets out the manner in which an enterprise agreement may be terminated by agreement and for the approval of the termination of the enterprise agreement by the Commission.

[25] Subdivision D of Division 7 contains provisions which enable an enterprise agreement to be terminated after the agreement has passed its nominal expiry date. These provisions are as follows:

“Subdivision D—Termination of enterprise agreements after nominal expiry date

225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

(c) an employee organisation covered by the agreement.

226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agrement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”

[26] Recently a Full Bench of the Commission dealt with an application to terminate 12 enterprise agreements in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd  18 (“Aurizon”) In deciding to terminate the agreements, the Full Bench usefully observed as follows:

“[126] The legislative scheme therefore enables and facilitates good faith bargaining for an enterprise agreement. It also facilitates the making of enterprise agreements but does not mandate that result. Once an enterprise agreement is made and approved by the Commission, it seems clear that the legislative scheme does not intend that such agreements operate in perpetuity. Agreements have a finite nominal life. At the end of the nominal life of an agreement, bargaining parties may bargain for a new agreement utilising all of the tools available under the Act; or a person to whom an agreement applies may take steps to bring the agreement to an end in accordance with the provisions of the Act; or both may occur.

...

[129] Section 226(a) requires a consideration of whether termination of the agreements is not contrary to the public interest. It seems to us that a consideration of the public interest will involve something that is distinct from the interests of the persons and bodies covered by the agreements. This distinction seems to be reflected in the structure of s. 226. The question of how the public interest is to be assessed was considered by a Full Bench of the Australian Industrial Relations Commission in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000.  The decision in Kellogg Brown concerned an application to terminate a certified agreement pursuant to s. 170MH of the WR Act. The Full Bench observed:

“The absence of any reference to the interests of the negotiating parties in s.170MH (3) is significant. It follows that the views of persons bound by the agreement may be relevant to the exercise of the discretion if they shed light upon the effect of termination on the public interest, but they should not be given any independent weight. To do so would be to import into the application of the section something which on its proper construction it does not include.

The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them.”

[130] After considering the decision in Re Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia, the Full Bench in Kellogg Brown said:

“It is clear from this passage that the ascertainment of the public interest may involve balancing countervailing public interests. That the Commission should take all of the circumstances into account is made clear by Dawson J in Re Australian Insurance Employees Union; Ex parte Academy Insurance Pty Ltd [(1988) 78 ALR 466 at 467]. These authorities provide useful general guidance in the application of the test in s.170MH(3). They illustrate the types of interests which can be properly described as public interests and confirm the breadth of circumstances which may be relevant to the ascertainment of those interests.

It should be emphasized that the Commission’s consideration of the public interest for the purpose of s. 170MH(3) is directed to the consequences of terminating the agreement. In a given case, some consequences will be clearly predictable, others will be less so. For the most part the Commission should be guided by the likely foreseeable consequences of termination rather than speculation about possible consequences.” 

[131] Section 226, unlike s. 170MH (3) of the WR Act, clearly requires the interests of the persons or bodies covered by an agreement to be taken into account. Those interests are considered separately from the question of the public interest, although it is accepted that these interests may nevertheless be similarly affected. It seems to us therefore, that the approach to the question of whether termination of an agreement is not contrary to the public interest in Kellogg Brown remains apposite.

[132] The scope and application of s. 226 of the Act was first considered by Vice President Watson in Energy Resources of Australia Pty Ltd v Liquor Hospitality and Miscellaneous Union (ERA). In that case his Honour observed:

“In my view this is an important consideration. Enterprise bargaining lies at the heart of the workplace relations system and has done so since the early 1990s. Enterprise instruments have had different titles and have been subject to different rules, but there is nevertheless consistency in many respects.

Enterprise Agreements made and approved under the FW Act, Workplace Agreements made under the WR Act, and Certified Agreements made under the Industrial Relations Act 1988 have all been required to have a specified duration with an upper limit on that duration.

The prevailing legislative provisions have provided for the continuation of agreements after their nominal expiry date subject to an ability to make application to terminate the Agreement. Different tests have applied, some more limited than the current provisions and some less restricted. It is clear that enterprise agreements are intended to apply for a limited period and either be renegotiated, renewed, varied, replaced, terminated or left unaltered depending on negotiations between the parties and the operation of the legislative provisions.

The primary object of the FW Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion. The means by which this is to be achieved include providing workplace relations laws that are fair to working Australians, are flexible for business and promote productivity and economic growth and achieving productivity and fairness through an emphasis on enterprise level collective bargaining.” 

[133] Subsequently in Re Tahmoor Coal Pty Ltd, Vice President Lawler said:

“The objects in s 3(f) and s 171(a) are particularly relevant. They indicate that collective bargaining in good faith for an enterprise agreement is the central way in which, in the framework that has been established by the FW Act, productivity benefits are to be achieved.

The object in s 171(b) is also clearly relevant. It emphasises that a key role of FWA is to facilitate good faith bargaining and the making of enterprise agreements. This suggests that that one of the effects of termination which should be considered is whether termination will enhance or reduce the prospects of the parties concluding a new agreement through bargaining.

The object in s 3(a) is advanced by a termination of an agreement where this would promote productivity. However, the object in s 3(a) is expressed in general terms whereas the objects in s 3(f) and s 171(a) are more specific. Given that principle of construction that the specific overrides the general, this suggests that the emphasis on promoting productivity (part of the object in s 3(a)) is primarily to be achieved through collective bargaining in good faith (the objects in s 3(f) and s 171) rather than by other means, such as termination of an expired agreement.” 

[134] After referring, inter alia, to the passages from the decision in ERA to which we have earlier referred, his Honour said the following:

“While his Honour emphasised only the object in s.3(a), for the reasons I have given, I consider that the objects in s.3(f) and s.171 are also of particular importance and should be seen as qualifying the general object in s.3(a). I respectfully agree with the outcome in ERA. However, it needs to be born in mind that the circumstances in that case were very unusual indeed. The agreement in question was some 10 years past its nominal expiry date and had a continuing application to only three employees - less than one per cent of the employer’s workforce. The remainder of the relevant workforce was employed on statutory individual contracts and the terms and conditions of their employment would not be directly affected by termination of the agreement in that case. Clearly enough, ERA was not a case where bargaining for a replacement agreement had been on-going since the passing of the nominal expiry date of the agreement in question.

I respectfully agree with his Honour that it is not intended by the legislation that agreements should remain in place indefinitely and that it is unreasonable to lock an expired agreement in place indefinitely. On the other hand, this does not mean that a party to an agreement has a prima facie right to have the agreement terminated merely because the agreement has passed its nominal expiry date.

It seems to me that under the scheme of the FW Act, generally speaking, it will not be appropriate to terminate an agreement that has passed its nominal expiry date if bargaining for a replacement agreement is ongoing such that there remains a reasonable prospect that bargaining (in conjunction with protected industrial action and or employer response action) will result in a new agreement. This will be so even where the bargaining has become protracted because a party is advancing claims for changes that are particularly unpalatable to the other party. While every case will turn on its own circumstances, the precedence assigned to achieving productivity benefits through bargaining, evident in the objects of the FW Act, suggests that it will generally be inappropriate for FWA to interfere in the bargaining process so as to substantially alter the status quo in relation to the balance of bargaining between the parties so as to deliver to one of the bargaining parties effectively all that it seeks from the bargaining. 19”” [Original endnotes omitted]

[27] The Full Bench then noted that the approach taken in Re Tahmoor Coal Pty Ltd 20 to the construction of s. 226 which seems to have been followed in a number of subsequent decisions of Members of the Commission. After a consideration of those decisions the Full Bench went on to state the following:

“[138] This is the first occasion on which a Full Bench of the Commission has had the opportunity to consider the operation of s. 226 of the Act. To the extent that the decision in Tahmoor Coal and the decisions which have followed it suggest that:

• the object related provisions in s. 3(f) and s.171 override, are more important than or are to be given greater weight in construing and applying s. 226 than the object related provision in s. 3(a);



• the precedence assigned to achieving productivity benefits through bargaining than by other means, is evident in the objects of the Act; or

generally speaking, it will not be appropriate to terminate an agreement that has passed its nominal expiry date if bargaining for a replacement agreement is ongoing such that there remains a reasonable prospect that bargaining (in conjunction with protected industrial action and or employer response action) will result in a new agreement, we would respectfully disagree.

[139] In our view, there is no statutory imperative that the promotion and delivery of productivity benefits at an enterprise level is primarily or exclusively to be achieved through enterprise bargaining in good faith rather than by other means. True it is that bargaining, where it occurs, must occur consistently with the good faith bargaining requirements. But there is no imperative that an agreement must result in productivity improvements. Much less is there any requirement that a resulting agreement must deliver a productivity benefit at the enterprise level. Good faith bargaining for an enterprise agreement may, or may not, deliver productivity benefits at any enterprise level.

[140] The statute also mandates that on application by the person covered, an agreement that has passed its nominal expiry date must be terminated if the circumstances identified in s. 226 exist. Productivity benefits might also be delivered by terminating an agreement that has passed its nominal expiry date. Such benefits might be delivered through a combination of both means.

…

[151] Section 226 of the Act is part of the simple, flexible and fair framework, established by Part 2–4 to which the objects in s. 171 relate. There is nothing inherently inconsistent with the termination of an enterprise agreement that has passed its nominal expiry date and collective bargaining in good faith. There is nothing incompatible with the termination of such an agreement and the continuation of collective bargaining that has commenced in good faith at an enterprise level for an enterprise agreement that delivers productivity benefits. The framework that is established by Part 2–4 provides for applications and orders to be made for the termination of an enterprise agreement that has passed it nominal expiry date. It is not too difficult to suppose that such an agreement in particular circumstances might no longer deliver productivity benefits, or that such an agreement has never done so. It is not too difficult to suppose that the termination of such an agreement might better support good faith bargaining for an agreement that delivers productivity benefits at the enterprise level.

[152] In our view, there is no express or contextual indication that the objects in s. 3 or s.171 operate on s. 226 in the way suggested in Tahmoor Coal. It follows that we do not propose to follow Tahmoor Coal in its construction of s.226 to the extent that the construction appears to place limits on the discretionary considerations in s. 226(b) because of that which we regard as an incorrect interpretation of the interrelationship of the objects in s. 3 and s. 171 of the Act. In our view the limitation is not justified. 21”

[28] The Union sought a judicial review of the decision of the Full Bench in Aurizon. A Full Court of the Federal Court rejected the application for a review of the decision and dismissed the application  22

[29] In determining this matter, I will adopt the construction of s.226 as detailed by the Full Bench in Aurizon.

4. Is termination of the enterprise agreement contrary to the public interest?

[30] Consistent with the decision in Aurizon, the approach to this question should be by way of applying the Full Bench decision in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000.  23

[31] A feature of many previous cases dealing with the application of this provision has involved a consideration of the effect of terminating the expired agreement while parties are bargaining for a replacement agreement. In turn, this has been a key factor in the determination as to whether termination is contrary to the public interest. These circumstances do not arise in this matter. This is not an application where bargaining is on going for this group of employees such that termination of the Agreement may alter the respective positions of ANZ and the FSU. The evidence is clear that there has been no bargaining in respect of this group of employees since 2001. The ANZ have been clear that they do not wish to bargain in respect to this group of employees. The FSU have acquiesced to that position and there is no evidence that they have taken any steps to change it. Therefore, the history of bargaining for this group of employees, or rather the lack thereof over the last 14 years, does not give rise to a concern that termination of the agreement would alter the respective positions of the parties or otherwise compromise the achievement of the objects of the Act.

[32] The FSU emphasise the observations of the Full Bench in Kellogg Brown that the maintenance of proper industrial standards could well be a factor in considering the public interest. Specifically, the FSU emphasised: “An example of something in the last category [proper industrial standards] may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees.”  24 In this case, it is clear that there is not now and there is not likely to be Award coverage for these employees. Recently, a Full Bench refused an application to modernise the enterprise award that covered these employees and it is common ground that the Banking and Finance Award 2010 does not cover employees at the Group 1, 2 and 3 Level. 25 This raises the question as to whether terminating the Agreement would be inconsistent with maintaining proper industrial standards for these employees.

[33] The uncontested evidence is that employees who are covered by this Agreement receive remuneration considerably in excess of the rates in the Agreement. The ANZ submit and it is evident that the relevant employees do not derive their actual terms and conditions of employment from the Agreement. Their conditions are sourced from their employment contracts in combination with various policies of the ANZ. Employees will also obviously have the benefit of the NES as part of their safety net. The evidence of Mr Natenzon is that the contractual provisions combined with the NES provide for equivalent or more generous entitlements overall compared to the Agreement. Indeed, the FSU conceded in the conclusion of their written submission that it was possible that the effluxion of time and individual contracts had made the operation of the Agreement largely secondary. While I am satisfied that there will not be an overall reduction in the terms and conditions of employment, if the Agreement is terminated there will be some alteration in the terms and conditions of employment to which employees are entitled. However, this will be the case on any occasion that the FWC terminates an agreement. The Full Bench in Aurizon expressly rejected the Unions submission in that matter that it will always be contrary to terminate the Agreement in such circumstances.

[34] The ANZ submit other matters relevant to the public interest such as employment levels, inflation, productivity and economic impacts, are not relevant in the circumstances. The FSU submit that the fact that there is no particular issue arising in respect to these factors contrasts with the situation in Aurizon where the competitive position of the organisation was a key factor. In my view, the fact that no particular matters arises in respect to those broader considerations renders them as essentially neutral considerations in determining if the termination is contrary to the public interest.

[35] Overall, the Agreement that the ANZ seeks to have terminated expired 14 years ago. It was made to operate in tandem with an enterprise award which no longer exists as a Full Bench of the Commission has determined not to modernise that enterprise award. The evidence supports a finding that the Agreement is largely irrelevant in terms of regulating the terms and conditions of the senior staff of the bank to whom it applies. Overall, having regard to the likely foreseeable consequences of terminating the Agreement, I am satisfied that it is not contrary to the public interest to terminate the Agreement.

5. Is it appropriate to terminate the enterprise agreement?

[36] The requirement in s.226(b) to take into account the circumstances including those set out in s.226(b)(i) and (ii) is a requirement to take the matters into account and to give them due weight is assessing whether it is appropriate to terminate an enterprise agreement. 26

[37] ANZ is a person covered by the Agreement. It has a strong view that the Agreement should be terminated.

[38] As to the views of employees, there is no evidence that the employees covered by the Agreement oppose its termination. There was no feedback received by the ANZ in response to the posting on the intranet site of the intention of the bank to terminate the Agreement beyond queries from five employees as to the impact on redundancy entitlements. However, as disclosed above, it is clear that the redundancy provisions in the Agreement do not apply to the Group 1, 2 and 3 employees and the interest of the employees on this matter was likely generated by the incorrect information promulgated by the FSU that the termination of the Agreement would have some impact on their redundancy entitlement.

[39] The FSU did not provide any evidence of the views of employees covered by the Agreement. Nor was there any evidence beyond the incorrect pamphlet dealing with redundancy that the FSU had communicated with employees about the application. Rather the FSU suggested that I conduct a ballot of the employees to inform myself of their views. I decline to take up that suggestion for a number of reasons. There is no indication that there is any opposition to the termination of the Agreement from employees. The evidence from the ANZ is clear that the employees were made aware of the application. There is no suggestion that the information ANZ put on the intranet site was incorrect or misleading. A large number of people looked at that page on the website. The FSU has provided no evidence to suggest employees are opposed to the application. There is simply no need against that background for the Commission to do more to seek the views of employees.

[40] The FSU represents a small minority of the employees in the relevant group. However, the views of the FSU must be considered as a person covered by the Agreement and given due weight. The FSU oppose the termination of the Agreement for the reasons set out above. I have considered the views of the FSU that the termination of the Agreement would lead to the loss of safety net entitlements; general protections in respect to the exercise of those entitlements; a transferable instrument; protection from unfair dismissal and appropriate recognition of the FSU.

[41] As to whether the Agreement had the role of the safety net, its history of being a vehicle to deal with non-allowable Award matters suggests there was an intent of the parties that it was to operate as part of a safety net in conjunction with the enterprise award. However, the enterprise award has been terminated. The terms of the enterprise agreement do not in the current environment have any meaningful operation as a safety net in the manner that may have been originally contemplated. Modern Awards and the NES are the safety nets that operate under the Fair Work Act 2009. The NES applies to these employees. A Modern Award does not apply; however, a Full Bench of the Commission recently held that there is nothing inherently inappropriate about senior employees being outside the scope of Award coverage.  27

[42] Notably the FSU did not point to particular features of the Agreement itself that warrant its continued operation, with the notable exception of the recognition of the role of the FSU and the loss of the dispute settlement procedure. On this point, I agree there will be a loss of the terms of the Agreement that refer to the recognition of the FSU role. However, I am not satisfied on the evidence that the likely effect of that loss of entitlement will mean the FSU will have any more or less of a role representing this cohort of employees. The Union will continue to have the benefit of the right of entry provisions conferred by the Fair Work Act 2009 and will continue to have the ability to represent employees.

[43] Considering the dispute settlement clause, the uncontested evidence is that no employee has invoked the procedure since 2010. The dispute settlement clause allows for the Commission to settle disputes about the Agreement. The evidence is that the Agreement is largely irrelevant in terms of the regulation of the terms and conditions of employment of the employees covered by it. The dispute settlement clause cannot be invoked under its terms to settle disputes over the terms of the contracts. Giving consideration to all of the circumstances the loss of the dispute settlement procedure is likely to have no practical effect on either employees, employers or the FSU.

[44] The other matters raised by the FSU as to why the Agreement should be retained, are in the nature of, as the ANZ puts it , ancillary rights which flow from the operation of the enterprise agreement, not just this enterprise agreement but any Agreement. I agree with the ANZ that the loss of these provisions is the practical effect of terminating any enterprise agreement. However, I do not agree that this ground of opposition misconceives the statutory test. Rather the test is to consider the circumstances of the employees, employers and organisations and the likely effect of the termination will have on them. The matters raised by the FSU should be considered as part of a consideration of the likely effect.

[45] The state of the evidence is that there have not been any general protections applications in the last 14 years that have relied upon rights exercised under the Agreement. There was no evidence that reliance had been placed on the instrument as a transferable instrument at any time. In light of the history, I do not think it likely that the loss of these provisions will have an effect on the employees.

[46] The evidence is that three employees have relied on the existence of the Agreement to access protection from unfair dismissal as without the existence of the Agreement their salaries would find them outside of the Commission’s jurisdiction. On this point, the ANZ assert that at the time the Agreement was made it did not extend unfair dismissal access to any employee who did not already have it and given the legislative regime in place could not have been intended to have this effect. 28 The analysis provided in the ANZ’s submissions was sound and was not disputed by the FSU. In light of the history, the fact that the changed legislation now provides a right for unfair dismissal remedy for those covered by the Agreement means that a likely effect of terminating the Agreement is that right will be lost. However, having regard to the history and the limited number of times on which it has been relied upon, it does not provide a sufficient basis to conclude it is not appropriate to terminate the Agreement.

[47] As per the consideration above, I have taken into account the circumstances including those set out in s.226(b)(i) and (ii) and given them due weight is assessing whether it is appropriate to terminate the enterprise agreement. Having done so I am satisfied that it is appropriate to terminate the Agreement.

Conclusion

[48] I have concluded that it is not contrary to the public interest to terminate the Agreement that is the subject of this application. I have also concluded after taking into account the views of employees, the employers and the employee organisations, their circumstances and the likely effect of the termination of the Agreement that it is appropriate to terminate the Agreement. Having so decided I must terminate the Agreement pursuant to s.226.

COMMISSIONER

Appearances:

M Tamvakologos of Seyfarth Shaw representing the Australia and New Zealand Banking Group Limited.

R Chaudry for the Finance Sector Union of Australia

Hearing details:

2015

Melbourne:

September 3

Final written submissions:

Australia and New Zealand Banking Group Limited on 24 July 2015

Finance Sector Union of Australia on 16 September 2015.

 1   Re ANZ/FSU Agreement 1998 (Unreported, AIRC, Ross VP, 12 August 1998, Print Q4854).

 2   Specifically, the Agreement is a “pre-reform certified agreement”, which is one form of “collective agreement-based transitional instrument” (Item 2(g) of Schedule 3 of the Transitional Act). The term “pre-reform certified agreement” is not defined in the Transitional Act, but terms used in the Transitional Act which were defined in the Workplace Relations Act 1996 (Cth) (WR ACT) have the same meaning unless a contrary intention appears (Item 4(1)(a) of Schedule 2 to the Transitional Act). Immediately prior to its repeal, the WR Act defined a “pre-reform certified agreement” in Item 1 of Schedule 7 as an agreement certified under, amongst other provisions, Division 4 of Part VIB of the WR Act, and certified prior to the commencement of Schedule 1 to the Workplace Relations Amendment (WorkChoices) Act 2005 (Cth) (WorkChoices Act). Section 170LT of the WR Act (under which the Agreement was certified) formed part of Division 4 of Part VIB. Schedule 1 to the WorkChoices Act commenced some eight years after the Agreement was certified.

 3   Transitional Act as Item 2 of Schedule 3.

 4   PN87

 5   PN86

 6   Exhibit T1, Witness Statement of Mr D. Natenzon, filed 24 July 2015, [29]; Annexure DN10

 7   PN95-97

 8   PN381-382

 9   Exhibit T1, Witness Statement of Mr D. Natenzon, filed 24 July 2015, [34]; Annexure DN11

 10   PN43

 11   PN266

 12   PN37

 13   PN38

 14   PN35

 15   Exhibit T1, Witness Statement of Mr D. Natenzon, filed 24 July 2015, [57]

 16   Tahmoor Coal Pty. Ltd. (2010) 204 IR 243 at [58]

 17   Confidential Transcript PN344

 18   [2015] FWCFB 540

 19   Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd; [2015] FWCFB 540 at [126], [129] – [134]

 20 (2010) 204 IR 243; [2010] FWA 6468

 21   Aurizon Operations Limited; Aurizon Network Pty Ltd; Australian Eastern Railroad Pty Ltd; [2015] FWCFB 540 at [138] – [140], [151] – [152]

 22   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Aurizon Operations Ltd [2015] FCAFC 126

 23 (2005) 139 IR 34

 24 (2005) 139 IR 34 at [23]

 25   Finance Sector Union of Australia; Banking Services – ANZ Group – Award 1998 [2015] FWCFB 2207

 26   [2015] FWCFB 540 at [167], Nestle Australia Ltd v Federal Commissioner of Taxation (1987)16 FCR 167 at 184; Elias v Commissioner of Taxation [2002] FCA 845; (2002) 123 FCR 499 at [62]; Construction, Forestry, Mining and Energy Union v New Oakleigh Coal Pty Ltd and another[2012] FWAFB 5107 at [15]

 27   Commonwealth Bank of Australia Employees Award 1999; BankWest/TrustWest Award 1998; The Colonial Group Enterprise Award 2003 and Commsec Award 2006 [2015] FWCFB 2029 at [39]

 28   Outline of submissions of the Applicant, filed 24 July 2015, [40]-[46]

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