Australia and New Zealand Banking Group Limited v Australian Industrial Relations Commission, in the matter of Australia and New Zealand Banking Group Limited

[2003] FCAFC 238

FEDERAL COURT OF AUSTRALIA

Australia and New Zealand Banking Group Limited v Australian Industrial Relations Commission, in the matter of Australia and New Zealand Banking Group Limited [2003] FCAFC 238

CORRIGENDUM

THE HONOURABLE JUSTICE GEOFFREY GIUDICE, THE HONOURABLE SENIOR DEPUTY PRESIDENT IAN WATSON AND COMMISSIONER ANNALEE CRIBB, MEMBERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION and FINANCE SECTOR UNION OF AUSTRALIA in the matter of  AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
No V 228 of 2003

THE HONOURABLE JUSTICE GEOFFREY GIUDICE, THE HONOURABLE SENIOR DEPUTY PRESIDENT IAN WATSON AND COMMISSIONER ANNALEE CRIBB, MEMBERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION and AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED in the matter of FINANCE SECTOR UNION OF AUSTRALIA
No V 229 of 2003

SPENDER, BRANSON, NORTH JJ
28 OCTOBER 2003
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 228 OF 2003

ON REMITTAL FROM A JUDGE OF THE HIGH COURT OF AUSTRALIA

BETWEEN:

THE HONOURABLE JUSTICE GEOFFREY GIUDICE, THE HONOURABLE SENIOR DEPUTY PRESIDENT IAN WATSON AND COMMISSIONER ANNALEE CRIBB, MEMBERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
FIRST RESPONDENTS

FINANCE SECTOR UNION OF AUSTRALIA
SECOND RESPONDENT

IN THE MATTER OF:

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
PROSECUTOR/APPLICANT

JUDGES:

SPENDER, BRANSON, NORTH JJ

DATE:

28 OCTOBER 2003

WHERE MADE:

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 229 OF 2003

ON REMITTAL FROM A JUDGE OF THE HIGH COURT OF AUSTRALIA

BETWEEN:

THE HONOURABLE JUSTICE GEOFFREY GIUDICE, THE HONOURABLE SENIOR DEPUTY PRESIDENT IAN WATSON AND COMMISSIONER ANNALEE CRIBB, MEMBERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
FIRST RESPONDENTS

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
SECOND RESPONDENT

IN THE MATTER OF:

FINANCE SECTOR UNION OF AUSTRALIA
PROSECUTOR/APPLICANT

JUDGES:

SPENDER, BRANSON, NORTH JJ

DATE:

28 OCTOBER 2003

WHERE MADE:

MELBOURNE

CORRIGENDUM

In the reasons for judgment of Spender, Branson and North JJ of 28 October 2003, the medium neutral citation FCAFC 1140 should read FCAFC 238.

Associate  Date:    28 October 2003

FEDERAL COURT OF AUSTRALIA

Australia and New Zealand Banking Group Limited v Australian Industrial Relations Commission, in the matter of Australia and New Zealand Banking Group Limited [2003] FCAFC 1140

INDUSTRIAL RELATIONS – prerogative relief  - Workplace Relations Act 1996 (Cth) – interpretation of award and certified agreement – meaning of “required severance pay” in award – whether claim concerning severance pay to identified workers in the events that occurred is a “matter at issue during bargaining period” – whether s 170N of the Act precludes the Commissioner from arbitrating claim for variation in award while bargaining period remains in force

Workplace Relations Act 1996 (Cth) s 113(2), s 111(1), s 170MI, s 170N

THE HONOURABLE JUSTICE GEOFFREY GIUDICE, THE HONOURABLE SENIOR DEPUTY PRESIDENT IAN WATSON AND COMMISSIONER ANNALEE CRIBB, MEMBERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION and FINANCE SECTOR UNION OF AUSTRALIA in the matter of  AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
No V 228 of 2003

THE HONOURABLE JUSTICE GEOFFREY GIUDICE, THE HONOURABLE SENIOR DEPUTY PRESIDENT IAN WATSON AND COMMISSIONER ANNALEE CRIBB, MEMBERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION and AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED in the matter of FINANCE SECTOR UNION OF AUSTRALIA
No V 229 of 2003

SPENDER, BRANSON, NORTH JJ
28 OCTOBER 2003
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 228 OF 2003

ON REMITTAL FROM A JUDGE OF THE HIGH COURT OF AUSTRALIA

BETWEEN:

THE HONOURABLE JUSTICE GEOFFREY GIUDICE, THE HONOURABLE SENIOR DEPUTY PRESIDENT IAN WATSON AND COMMISSIONER ANNALEE CRIBB, MEMBERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
FIRST RESPONDENTS

FINANCE SECTOR UNION OF AUSTRALIA
SECOND RESPONDENT

IN THE MATTER OF:

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
PROSECUTOR/APPLICANT

JUDGES:

SPENDER, BRANSON, NORTH JJ

DATE OF ORDER:

28 OCTOBER 2003

WHERE MADE:

MELBOURNE

THE COURT DECLARES THAT:

Section 170N does not constitute a bar to a determination by the Commission of the application by Australia and New Zealand Banking Group Limited on 27 March 2002 to vary the Banking Services – ANZ Group – Award 1998 in relation to severance pay.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 229 OF 2003

ON REMITTAL FROM A JUDGE OF THE HIGH COURT OF AUSTRALIA

BETWEEN:

THE HONOURABLE JUSTICE GEOFFREY GIUDICE, THE HONOURABLE SENIOR DEPUTY PRESIDENT IAN WATSON AND COMMISSIONER ANNALEE CRIBB, MEMBERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
FIRST RESPONDENTS

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
SECOND RESPONDENT

IN THE MATTER OF:

FINANCE SECTOR UNION OF AUSTRALIA
PROSECUTOR/APPLICANT

JUDGES:

SPENDER, BRANSON, NORTH JJ

DATE OF ORDER:

28 OCTOBER 2003

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

The application seeking prerogative relief, in respect of the decision of the Full Bench of the Australian Industrial Relations Commission that the application of Australia and New Zealand Banking Group Limited of 27 March 2002 to vary the Banking Services – ANZ Group – Award 1998 is one the Commission has jurisdiction to deal with, is refused.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 228 OF 2003

ON REMITTAL FROM A JUDGE OF THE HIGH COURT OF AUSTRALIA

BETWEEN:

THE HONOURABLE JUSTICE GEOFFREY GIUDICE, THE HONOURABLE SENIOR DEPUTY PRESIDENT IAN WATSON AND COMMISSIONER ANNALEE CRIBB, MEMBERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
FIRST APPLICANT

FINANCE SECTOR UNION OF AUSTRALIA
SECOND APPLICANT

IN THE MATTER OF:

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
RESPONDENT

V 229 OF 2003

AND BETWEEN:

THE HONOURABLE JUSTICE GEOFFREY GIUDICE, THE HONOURABLE SENIOR DEPUTY PRESIDENT IAN WATSON AND COMMISSIONER ANNALEE CRIBB, MEMBERS OF THE AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
FIRST APPLICANT

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
SECOND APPLICANT

IN THE MATTER OF:

FINANCE SECTOR UNION OF AUSTRALIA
RESPONDENT

JUDGES:	SPENDER, BRANSON, NORTH JJ
DATE:	28 OCTOBER 2003
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

THE COURT:

1. These matters were remitted to the Full Court of the Federal Court by orders of Justice Hayne in the High Court of Australia on 11 March 2003.   The question for decision on these motions for prerogative relief is whether the Australian Industrial Relations Commission (“the Commission”) has jurisdiction to entertain an application by Australia and New Zealand Banking Group Limited (“ANZ”) to vary the severance pay otherwise payable to 479 former employees of ANZ.  These employees were “redeployed” to ING Administration Pty Limited as a consequence of the transmission of the funds management business of ANZ to a joint venture of ANZ and ING called ING Australia Limited.  The Full Bench of the Commission (constituted by the first respondents in each motion) determined on 9 October 2002 to allow an appeal from Commissioner Eames given on 29 April 2002.  Commissioner Eames held that ANZ’s application was beyond the jurisdiction of the Commission, as had been and is contended for by the Finance Sector Union of Australia (“FSU”). 

2. The further question which arises, if the Commission does have jurisdiction to entertain the application, is whether (as the Full Bench and Commisioner Eames held) the application concerns a matter at issue in a bargaining period between FSU and ANZ, with the consequence that the Commission may not arbitrate in relation to ANZ’s claim while the bargaining period remains in force. In May 2001 the FSU initiated a bargaining period with ANZ pursuant to s 170MI of the Workplace Relations Act 1996 (Cth) (“the Act”). ANZ contends that the application does not involve an exercise of arbitration powers pursuant to Part VI of the Act, nor does the application concern “a matter at issue in the bargaining period between FSU and ANZ”.

3. There are two instruments of direct relevance to the present motions, and much of the difficulties arise from that fact. Both the ANZ and the FSU are bound by the Banking Services – ANZ Group – Award 1998 (“the 1998 Award”) and the ANZ/FSU Agreement 1998 (“the 1998 Agreement”), the first being an award and the second a certified agreement within the meaning of the Act.

4. Prior to 1 May 2002, ANZ operated a business known as ANZ Investments, a funds management business in which it employed staff under the 1998 Award and the 1998 Agreement.  ING Australia Limited also operated a funds management business in which it or its subsidiary ING Administration Pty Limited employed staff.

5. With effect on and from 1 May 2002 the funds management businesses of ANZ and ING were combined in a joint venture called ING Australia Limited, with 51 per cent of this joint venture being owned by an ING interest and 49 per cent by ANZ.  According to the reasons for decision by the Full Bench of the Commission, some 479 ANZ employees formerly engaged in the business known as ANZ Investments became employed by ING Administration Pty Limited and ceased to be ANZ employees. 

6. On 3 July 1998 ANZ wrote to Deputy President Drake of the Commission advising:

   ‘ANZ and the FSU have now finalised simplifying the ANZ Group Award.  As advised our conference on 9 June 1998 we have been undertaking this exercise in conjunction with our Enterprise Bargaining Agreement.  As a consequence we have now agreed on two documents - the Award and a certified agreement.  It is agreed between the parties that any matters in the Award that are not determined by the Commission to be “allowable” will form part of our certified agreement.’

   The letter continued:

   ‘Given that we are shortly to put the certified agreement to staff for their endorsement there is the potential that through the Award simplification process, that certified agreement will require variation, necessitating a further endorsement process, which is something both parties wish to avoid.  Given that it is our intention to both explain and make available both the simplified Award and the certified agreement to staff we request your advice as to whether a further endorsement process will be required should the certified agreement change through the Award simplification process.’

7. Clause 3.4 of the draft ANZ Group Award 1998 dealt with transmission of business and contained a provision 3.4.1:

   ‘If ANZ obtains other acceptable employment for a staff member under notice of termination, it may apply to the Commission to vary the required severance pay.’

8. Appendix A of the draft ANZ Group Award 1998 dealt with redeployment and retrenchment, and Clause A5 of that appendix provided for severance payments:

   ‘Upon termination through retrenchment, a staff member shall be paid a special lump sum severance payment calculated as follows:-

   WITHOUT PREJUDICE
   DRAFT FOR DISCUSSION

   (i)Seven weeks’ salary for the first year of service.  Pro-rated for those with less than one year of service

   (ii)Plus four weeks’ salary for each year for the second to tenth consecutive years of continuous service.

   (iii)Plus three weeks’ salary for each year for the eleventh to sixteenth consecutive years of continuous service.

   (iv)Plus two weeks’ salary for each subsequent consecutive year of continuous service to a maximum of 25 years including the first.

   (v)Plus a pro-rated payment for each completed month of service in the final part year of service, up to and including the 25^th year of service.

   The sum payable above shall be inclusive of (and not additional to) the entitlement prescribed in Award clause 3.3.1.’

9. Vice President Iain Ross in respect of the draft ANZ Group Award made a number of comments concerning the draft, including a number of matters which were opined not to be ‘an allowable award matter’.  In particular Vice President Ross noted:

   ’10.    Appendix A - Redeployment and Retrenchment: should go into certified agreement.’

   The first note to his comments was:

   ‘A.  The above comments are somewhat conservative - it may be argued that a number of the clauses referred to are allowable but I have taken the view that you want to minimise the risk of any variation be made to your draft award.’

10. As a result of adopting these suggestions, Clause 7.2 of the 1998 Award provides:

    ‘7.2     Transmission of business

    7.2.1If a business is transmitted by ANZ or another employer to another employer or ANZ and a staff member of the first employer becomes a staff member of the other employer, then:

    7.2.2The staff member’s continuity of employment is not broken.

    7.2.3The period of service with the employer and any business previously acquired by the first employer becomes part of the period of service of the new employer.

    7.2.4Business includes trade, process, occupation and business or part of a business.

    7.2.5Transmission includes transfer, conveyance, assignment or succession, whether by agreement or by operation of law, and transmission has a corresponding meaning.’

    Clause 11.2 of the 1998 Award provides:

    ‘ 11.2 Other acceptable employment

    If ANZ obtains other acceptable employment for a staff member under notice of termination, it may apply to the Commission to vary the required severance pay.’

    Clause 1 of the 1998 Agreement provides:

    ‘This Agreement will be known as the ANZ/FSU Agreement 1998.  It is binding on the Australia and New Zealand Banking Group Limited ACN 005 357 522 (“ANZ”) and the Finance Sector Union of Australia (“FSU”).

    Unless expressly stated otherwise in this Agreement, the provisions of the ANZ Group Award 1998 will continue to apply, however, in the event of inconsistency the provisions of this Agreement will prevail.’

    Clause 3 of the 1998 Agreement provides:

    ‘This Agreement is to be read in conjunction with the ANZ Group Award 1998.’

11. Clause 8 of the 1998 Agreement deals with redundancy and retrenchments and includes the following provisions:

    ‘8.1   Definitions

    Retrenchment is at the Group’s instigation only.  It is defined as termination or notice of proposed termination of employment as the result of a re-organisation or through the adoption of changed business practices and where alternative employment is not available or re-training appropriate.  Retrenchment does not apply: (Emphasis added)

    (a)     Except where 8.3 (below) applies, to staff members who leave the Company at their own choice;

    (b)     Where the termination is a result of ill health in terms of superannuation fund provisions;

    (c)   Where the termination is a result of dishonesty, wilful misconduct or such actions warranting dismissal;

    (d)     Where the termination is a result of unsatisfactory performance which warrants termination;

    (e)   To casual or temporary staff;

    …

    8.2Avoidance of Retrenchment

    8.2.1Every effort will be made to avoid retrenchment through re-deployment, re-training, normal staff wastage and curtailing recruitment.  Temporary or casual staff may be employed in an impending retrenchment situation to meet short term staffing requirements.

    8.2.2…

    8.2.3Staff shall not be retrenched until all reasonable alternatives for continuing employment have been explored, and there is no suitable alternative employment available.  As far as possible all avenues to redeployment will be exhausted prior to the issuing of written notice.

    …

    8.5Severance Payments

    Upon termination through retrenchment, a staff member shall be paid a special lump sum severance payment calculated as follows:-

    i)     Seven weeks’ salary for the first year of service.  Pro-rated for those with less than one year of service.

    ii)    Plus four weeks’ salary for each year for the second to tenth consecutive years of continuous service.

    iii)   Plus three weeks’ salary for each year for the eleventh to sixteenth year of continuous service.

    iv)   Plus two weeks’ salary for each subsequent consecutive year of continuous service to a maximum of 25 years including the first.

    v)    Plus a pro-rated payment for each completed month of service in the final part year of service, up to and including the 25^th year of service.

    The sum payable above shall be inclusive of (and not additional to) the entitlement prescribed in Award clauses 3.3.1.

    8.6Other Payments

    In addition to Severance Payment outlined in clause 8.5, a retrenched staff member shall also be paid:-

    8.6.1    Annual Leave

    Each staff member shall be paid pro rata in lieu of any annual leave accrued but not yet taken, plus any loadings which would otherwise have been placed on that leave.

    8.6.2Long Service Leave

    Each staff member with more than five years’ continuous service will be paid for untaken long service leave on a pro rata basis.

    8.6.3Superannuation

    Staff will be entitled to the withdrawal or deferred pension provisions of their superannuation/pension scheme.’

12. The difficulties in the present case arise because the single proposed draft award which had been agreed to by ANZ and FSU was “streamed” or “bifurcated” into two instruments, the 1998 Award and the 1998 Agreement, as a result of the suggestion of Vice President Ross.  ANZ is obliged to make the severance payments under 8.5 of the Agreement, and there is no provision in the Agreement for an opportunity to vary those amounts (particularly in circumstances where the provisions of Clause 7.2 of the Award apply).  Clause 7.2 of the Award has the effect of deeming employment to be continuous, with the maintenance of the entitlements of that length of service, and Clause 11.2 of the Award provides that where other acceptable employment for a staff member under notice of termination has been obtained by ANZ, it may apply to the Commission to vary ‘the required severance pay’.  However, there is no provision in the Award which identifies what is ‘the required severance pay’.

13. On 27 March 2002 the ANZ made an ‘APPLICATION TO SEEK AN ORDER OR VARY AN AWARD’.  ANZ sought:

    ‘A.    An order in the following terms:

    “Pursuant to clause 11.2 of the Banking Services – ANZ Group – Award 1998, the severance pay otherwise required of ANZ is varied to nil in respect of persons who are made an offer of suitable alternative employment by ING Administration Pty Limited as a consequence of the ANZ/ING Funds Management Joint Venture.”

    B.In the alternative, the variation of the Banking Services – ANZ Group – Award 1998 in the following terms:

    Inserting at the end of clause 11.2 of the Banking Services – ANZ Group – Award 1998 the following:

    “The severance pay otherwise required of ANZ is varied to nil in respect of the persons who are made an offer of suitable alternative employment by ING Administration Pty Limited as a consequence of the ANZ/ING Funds Management joint venture”.’

14. The application referred to Clause 7.2 and 11.2 of the ANZ Award and to the redeployment and retrenchment provision in Clause 8 of the ANZ Agreement.  Ground 5 of the application stated:

    ‘The ANZ Award and the ANZ Agreement were negotiated concurrently.  They were made and certified in August 1998 and were intended to be read conformably.’

    Grounds 8 – 12 of the application also stated:

    ‘ANZ employees who are offered employment with the joint venture will be offered terms and conditions no less favourable than those which apply to them in their current employment with ANZ.

    These arrangements will constitute a transmission of business as contemplated in clause 7.2 of the ANZ Award and sections 149 and 170MB of the Act.

    ING Administration will recognise accrued statutory entitlements such as annual leave and long service leave.

    In the initial period of operation of the joint venture, the ANZ Award and ANZ Agreement will continue to apply to all former ANZ staff in the joint venture. These will so continue until replaced or terminated in accordance with the Act.

    Should circumstances arise where a former ANZ employee is offered and accepts employment with the joint venture and within 24 months the role becomes redundant, the employee will be offered the opportunity to participate in the then current ANZ redeployment process.  If such an employee chooses not to explore redeployment in ANZ, or is unsuccessful in doing so, he or she will be entitled to redundancy payments in accordance with the standard set out in clause 8 o the ANZ Agreement.’

1. It is to be noted (as the tense, and the terms of the application indicate) that this application was made prior to the implementation of the commencement of the joint venture and before the transmission of the former funds management business of ANZ to the joint venture.  The application in March 2002 concluded:

   ‘(a)It is in the best interests of the employees concerned, their employers (ANZ and ING) and the FSU that the dispute be resolved as soon as possible so that the position concerning severance payments is clear;

   (b)Offers of employment under the commercial arrangements proposed  are imminent.’

2. The decision of Commissioner Eames was given on 29 April 2002.  The principal issue identified by Commissioner Eames is not the matter the subject of present dispute.  Commissioner Eames in par 24 of his reasons said:

   ‘The principal issue is whether affected employees of ANZ, who may choose not to accept a transfer to the new employer, on essentially the same terms and conditions, performing the same work in the same location, should have applied to them, the general severance pay standard, applicable with ANZ.’ 

3. In concluding that the Commission had no jurisdiction to entertain the application, Commssioner Eames said at par 132:

   ‘Clause 11.2 in the Award does make reference to severance pay, but there is no such clause in the Award, and there is no reference to the severance pay scale contained in the Agreement. …  The Award could have clearly indicated so, it did not.  At any rate the Agreement prevails over the Award, in the event of any inconsistency, and the application to vary involves the Award, not the Agreement.’

4. Commissioner Eames further held that the making of an order pursuant to s 111(1)(b) of the Act involves an exercise of arbitral powers, and comes within the prohibition included in s 170N of the Act.

5. Section 170N of the Act provides:

   ‘(1)During a bargaining period, the Commission must not exercise its arbitration powers under Part VI in relation to a matter that is at issue between the negotiating parties.

   (2)Subsection (1) does not prevent the Commission exercising its arbitration powers to deal with an application to vary an award by making a safety net wage adjustment.’

6. Commissioner Eames said at par 140:

   ‘A bargaining period is in place and the matters at issue between the parties are the subject of the notice of bargaining period.’ 

7. ANZ contended before the Full Bench that:

   ‘(a)clause 11.2 of the 1998 award is incorporated by reference into the 1998 agreement and it is therefore a term of the agreement permitting variation of the severance payments required by clause 8.5;

   (b)alternatively, clause 11.2 of the 1998 award is to be read with clause 8.5 of the 1998 agreement so that variation of the obligation in clause 8.5 is permissible in that way;

   (c)whichever of the alternatives is correct, in dealing with the application the Commission would not be exercising arbitration powers under Part VI of the Act; to the contrary, it would be exercising conciliation powers;

   (d)even if determination of the application involves the exercise of arbitration powers under Part VI, s.170N does not constitute a bar to such determination because the entitlements to severance pay of employees transferring from ANZ to ING was not a matter at issue between he negotiating parties.’

8. The Full Bench rejected the contention that Clause 1 of the Agreement had the effect of incorporating any of the terms of the 1998 Award into the 1998 Agreement, commenting at par 17 that:

   ‘The expression “will continue to apply” is not indicative of an intention to incorporate the provisions of the award.’  

   The Full Bench said at par 21:

   ‘When clause 11.2 of the 1998 award was part of cl.39.3.3 of the 1991 award, it was clear that the clause conferred a right on ANZ to seek a variation of the severance pay required by cl.39.3.3 itself if ANZ obtained other acceptable employment for an employee otherwise entitled to severance pay under 39.3.3.  The 1998 award does not contain any provision for severance pay.  As the history shows, in 1998 the severance pay entitlement in the Redundancy Agreement was included in cl.8.5 of the 1998 agreement.  The severance pay entitlement in the 1991 award either merged in the provision in the 1998 agreement or was lost.  Either way, the question which remains is whether cl.11.2 of the 1998 award has any operation in relation to the severance pay provision in the 1998 agreement.’

   And later the Full Bench concluded:

   ‘We think that the only way in which cl.11.2 can be given a sensible meaning is by reading the expression “required severance pay” as a reference to cl.8.5 of the 1998 agreement.  Clause 3 [of the Agreement] permits such a construction.  Viewed objectively, it is likely the parties intended clause 11.2 to have substantial operation and it is likely that they intended to provide for an application of the kind made by ANZ in this case.  While there is some force in the FSU’s submission that obligations imposed by the agreement could not be altered by an ordinary variation we think this submission gives too little weight to the parties’ agreement that the 1998 agreement should be read in conjunction with the 1998 award.’ (Emphasis added)

9. We respectfully agree such a conclusion clearly gives effect to the intentions of the parties refected in the Draft 1998 Award.  The interpretation of the Full Bench is consistent with the history of the negotiations by the parties, and the separation of the matters into the two instruments.  If the interpretation for which the FSU contends be correct, the effect is to preclude the Commission from considering a variation of the severance pay entitlements – a result which was never in the contemplation of either party at the time of the negotiations in 1998.  We agree that the Full Bench of the Commission was correct to reject the contention that Clause 11.2 was incorporated in the 1998 Agreement.  In our view the terms of Clause 8.5 of the Agreement is the meaning properly to be given to the term ‘required severance pay’ in Clause 11.2 of the Award. 

10. What is therefore sought by the application is the exercise of the powers of the Commission in s 111(1)(b), (1)(f) or 113(2) of the Act, in the context of the Commission exercising the power conferred on it by Clause 11.2 of the Award. Those powers are arbitration powers and the sections are contained in Part VI of the Act.

11. The Full Bench held that s 170N constitutes a bar to the exercise of those arbitration powers under Part VI, because there is a bargaining period in operation, and ‘the issues in contention include redundancy’.  At the time of the Full Court’s decision there was a relevant bargaining period in existence, as the ANZ conceded.  The notice of initiation of bargaining period contemplated matters including redeployment, redundancy and retrenchment provisions, and in a without prejudice document of 13 February 2001 there was a reference to

    ‘Redundancy and Redeployment
    Proposed Change
    - a thorough rework of the redeployment processes and the overall conditions relating to redundancy and redeployment.’

12. The Full Bench concluded at par 38:

    ‘Whether ANZ should be relieved of the severance pay obligation in the 1998 agreement, and if so whether wholly or partially, are questions comprehended by a matter that is at issue between the negotiating parties.  If the Commission were to hear and determine ANZ’s application its determination would be likely to affect the negotiations between the parties on the issue of retrenchment and redundancy provisions.

    It follows that the Commission is precluded by section 170N from determining ANZ’s application.’

13. In our opinion, while what are the appropriate redeployment and redundancy provisions that might apply in any future agreement are clearly matters at issue during the bargaining period, the question of whether, pursuant to clause 11.2 of the Award, ANZ should be relieved of the severance pay obligation, in whole or in part, in respect of the 476 former employees of ANZ Bank who on 1 May 2002 ceased to be employees of ANZ Bank and became employees of ING Australia Limited on the same terms and conditions as their previous employment with ANZ is not a matter at issue between the negotiating parties. That is a dispute that is based on historical facts, and is to be determined in the context and the terms of the existing award. It follows, in our opinion, that the jurisdiction of the Commission is not precluded by s 170N from entertaining the application filed by the ANZ Bank on 27 March 2002.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Spender, Branson and North

Associate:

Dated:             28 October 2003

Counsel for the Australia & New Zealand Banking Group Limited:	Mr Harry Dixon SC, with Mr Michael McDonald
Solicitor for the Australia & New Zealand Banking Group Limited:	Blake Dawson Waldron
Counsel for the Finance Sector Union of Australia:	Mr Christopher Maxwell QC, with Mr Eugene White
Solicitor for the Finance Sector Union of Australia:	Ryan Carlisle Thomas
Date of Hearing:	18-19 August 2003
Date of Judgment:	28 October 2003