Carrigg v Commonwealth Bank of Australia

[2002] FCA 813

FEDERAL COURT OF AUSTRALIA

Carrigg v Commonwealth Bank of Australia [2002] FCA 813

INDUSTRIAL LAW – contract of employment – industrial agreement – whether “redundancy situation” within meaning of industrial agreement – whether applicant held position of branch manager of particular bank branch of respondent or whether applicant appointed as branch manager without a nominated bank to manage – whether mobility clause in industrial agreement inconsistent with a branch manager holding a position as branch manager of a particular branch – where respondent bank reduced the number of its bank branches following merger with another bank

WORDS AND PHRASES – “no longer requires a job or task performed”

Workplace Relations Act 1996 (Cth) ss 4, 170VC, 170VF(1), 170VT, 170VV, 170VZ

Australian Colliery Staff Association v Queensland Mines Rescue Service (1999) 88 IR 78 cited
Kucks v CSR Ltd (1996) 66 IR 182 cited

MICHAEL LEONARD CARRIGG v COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124)
N1302 OF 2001

BRANSON J
27 JUNE 2002
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N1302 OF 2001

BETWEEN:	MICHAEL LEONARD CARRIGG APPLICANT
AND:	COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) RESPONDENT
JUDGE:	BRANSON J
DATE OF ORDER:	27 JUNE 2002
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT the application be dismissed.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N1302 OF 2001

BETWEEN:	MICHAEL LEONARD CARRIGG APPLICANT
AND:	COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) RESPONDENT

JUDGE:	BRANSON J
DATE:	27 JUNE 2002
PLACE:	SYDNEY

REASONS FOR JUDGMENT

INTRODUCTION

1. By an application dated 11 September 2001, the applicant (“Mr Carrigg”) sought relief against the respondent (“the Bank”) under both the Workplace Relations Act 1996 (Cth) (“the Act”) and the Federal Court of Australia Act 1976 (Cth) (“the Federal Court Act”). At issue is the proper construction of an Australian Workplace Agreement signed by Mr Carrigg on 13 July 2000 (“the AWA”), and in particular whether Mr Carrigg came within a “redundancy situation” within the meaning of the AWA.

   BACKGROUND FACTS

2. The following facts are not in dispute.

3. The Bank operates a branch network which is organised into geographical areas.  Each geographical area has an area manager.  The branches are all managed by a branch manager who reports to the relevant area manager.  In June 2000 one of the geographical areas was the Chatswood area.  The Pymble branch of the Bank was at that time in the Chatswood area.

4. On an undisclosed date, but earlier than June 2000, the Bank advertised that the position of Branch Manager, Pymble was vacant.  Mr Carrigg applied to be appointed as Branch Manager, Pymble.  He was interviewed by a selection panel which included the Chatswood Area Manager, Mr Ron Davies (“Mr Davies”).  At the interview he was advised that AWAs, which would supersede the existing enterprise bargaining agreement, were to be offered by the Bank to all of its managers.

5. A few days after his interview Mr Carrigg was advised that he had “won the position” and that he would receive a letter of confirmation.

6. On 23 June 2000, Mr Carrigg received a letter signed by Mr Davies.  Relevantly the letter was in the following terms:

   “Dear Michael,

   Branch Manager Offer of New Employment and Remuneration Arrangements

   Congratulations on your appointment to the position of Branch Manager, Pymble.

   As part of the introduction of a new Sales and Service leadership model which we discussed, you are being offered alternative remuneration and employment arrangements to Branch Managers incorporating the offer of Australian Workplace Agreement (AWA), TC‑I‑S packaging and revised bonus arrangements.

   The offer of the new arrangements is open to you for only four weeks from the day you received this letter.

   The following information relating to the offer is enclosed –

   ·AWA and Statement of Conditions;

   ·Package Disbursement Schedule; and

   ·Information Statement about AWAs from the Employment Advocate.

   …

   To accept the new arrangements you will need to sign the AWA and your package disbursement schedule and return them to me.

   ….”  (emphasis in original)

   Mr Carrigg signed the AWA on 13 July 2000 (it is unclear whether he also signed the package disbursement schedule) and returned it to Mr Davies.

7. The AWA was approved by the Employment Advocate on 11 August 2000.It is common ground that the AWA dealt with matters pertaining to the relationship between Mr Carrigg and the Bank and bound both Mr Carrigg and the Bank.

8. In the meantime, in March 2000 the Bank and Colonial State Bank (“Colonial”) had announced a proposal to merge by way of schemes of arrangement under which the Bank would acquire all of Colonial’s ordinary shares and income securities and all Colonial options would be cancelled.  The arrangements included the proposed purchase by the Bank of the franchise agreements for the operation of the Colonial branch network.

9. In about early June 2000 the merger of the Bank and Colonial was complete.  The Bank estimated that there were approximately 250 “overlapping” branches.  In the Hornsby and Chatswood areas, soon to be known as the “North Shore Area”, there were five Colonial branches and thirteen Bank branches (one of which closed in October 2000).  In approximately November 2000 the Bank decided that the remaining seventeen branches in the North Shore Area were to be reduced in number to thirteen.  As a result a number of branch managers then working in the North Shore Area would become surplus to the Bank’s requirements in that area.

10. Mr Craig Steven Bower (“Mr Bower”), who had become the Area Manager – Retail in the North Shore Area, was instructed to select the thirteen branch managers best suited to the role.  Mr Carrigg was not one of the thirteen branch managers who Mr Bower selected to manage branches in the North Shore Area.

11. In about March 2001 Mr Carrigg was advised by Mr Bower that he was surplus to the Bank’s requirements.  Two to three weeks later a former employee of Colonial commenced to undertake the duties of Branch Manager at the Pymble Branch.  Mr Carrigg subsequently undertook relieving work at various Bank branches.  On 29 March 2001 he was invited to fill out a form to indicate whether or not he would accept a voluntary redundancy.  Mr Carrigg made it clear that he was not interested in taking a redundancy and of his preference for redeployment.

12. Mr Bower, after reviewing potentially suitable positions, advised Mr Carrigg that there were no current vacancies to which he could be appointed.  Mr Carrigg made his own inquiries and also found that there were no suitable vacancies.  Mr Carrigg continued to work in a relieving capacity until he was made redundant by the Bank on 15 February 2002.

13. The essential matter in dispute is whether in the above circumstances a “redundancy situation” arose affecting Mr Carrigg within the meaning of the AWA.

    THE AGREEMENT

14. The AWA is headed:

    “AUSTRALIAN WORKPLACE AGREEMENT
    For Branch Managers – Existing Employees”

    Under the subheading “Term and Scope” the AWA provides:

    “This AWA sets out the terms and conditions of your employment.  The attached Statement of Conditions Applying to Commonwealth Bank of Australia Branch Manager Australian Workplace Agreement forms part of this AWA.  When you sign the AWA you acknowledge that you understand its contents, it is fair and you have entered into it on a voluntary basis.  During the term of this AWA, neither the Commonwealth Bank of Australia Employees Award 1999 as amended from time to time (“Award”) nor any other existing or future award or certified or uncertified industrial or employment agreement will apply to your employment.”

15. The Statement of Conditions Applying to Commonwealth Bank of Australia Branch Manager Australian Workplace Agreement (“the Statement of Conditions”) provides by clause 1.4 that:

    “The Bank will reimburse reasonable travel and accommodation expenses incurred as a consequence of business away from your normal workplace.”

16. Clause 3 of the Statement of Conditions provides:

    “Mobility

    You may be transferred or promoted to another Branch Manager role.  If transferred or promoted to another Branch Manager role, this AWA will continue to apply.

    You can apply at any time for a non Branch Manager role within the Bank.

    The conditions of your employment, if you are successful, will be determined in accordance with the Bank’s requirements for your new position.  This will generally involve the termination of this agreement.”

17. Clause 4 of the Statement of Conditions, which is concerned with “Duties and Hours of Work” provides, amongst other things, that:

    “You will be employed in the capacity of Branch Manager and will perform duties as directed by the Bank at any location where the Bank or one of its related bodies operate.”

18. Clause 14 of the Statement of Conditions is at the heart of the present dispute.  It is in the following terms:

    “Redundancy and Redeployment

    A redundancy situation refers to a situation where the Bank no longer requires to have a job or a task performed and having reviewed all other alternatives declares you redundant.

    The Bank will consult with you in a redundancy situation.

    The Bank will endeavour to redeploy you before declaring you redundant.  The initial aim will be redeployment to a position of no lower status or remuneration than that you previously occupied, the duties of which are within your capacity (after appropriate training if necessary) at a location within reasonable commuting distance of your residence.

    Where the Bank is not able to redeploy you to a position of no lower status, it may redeploy you, without reduction in remuneration, to a role commensurate with your capabilities.

    Redeployment may entail a variation of this AWA or its replacement by a new one.

    If you are not able to be redeployed as set out above you will be entitled to the following notice (in substitution for that in clause 13) and severance payments:

    Notice:

    If you have less than 25 years service – six weeks
               If you have 25 or more years of service – nine weeks notice

    The Bank may elect to pay you a lump sum equivalent to this notice based on your cash component instead of your working out the notice period.

    Severance Payments:

    A payment equivalent to:

    ·seven weeks cash component for the first full year of service; plus

    ·three weeks cash component for each subsequent completed year of service.

    A pro rata amount will be paid for each completed month of service in the final year of service.  The maximum payment will be 79 weeks.

    In the event that the Bank transmits its’ [sic] business or part of it, or outsources any of its’ [sic] functions to another employer or as a result of restructuring requires your employment contract to be continued with a different legal entity, a redundancy situation will not apply as a result of that change where the new employer is bound by this AWA under the Workplace Relations Act 1996; or offers employment on substantially the same terms and conditions as are contained in this AWA.”

    THE APPLICANT’S CLAIMS

19. By his application, Mr Carrigg claimed the following relief:

    “1.A declaration that the position of Branch Manager Pymble, to which the applicant was appointed was not made redundant within the meaning of clause 14 of the Australian Workplace Agreement made between the applicant and the respondent;

    2.An order that the applicant be restored forthwith to his position as the Branch Manager of the Commonwealth Bank Branch at Pymble New South Wales;

    3.An order that the respondent pay to the applicant damages for the breach of the AWA;

    4.An order imposing a penalty upon the respondent for the said breach of the AWA.”

    The claim for damages was not pressed at the hearing.

    LEGISLATIVE PROVISIONS

20. Part VID of the Act, which is comprised of ss 170VA‑170WL, is concerned with Australian Workplace Agreements. It is not disputed that the AWA falls within the scope of Part VID of the Act on the basis that the Bank is a “constitutional corporation” within the meaning of the Act (see ss 4 and 170VC).

21. Section 170VF(1) of the Act provides:

    “An employer and an employee may make a written agreement, called an Australian workplace agreement, that deals with matters pertaining to the relationship between an employer and an employee.”

22. Division 5 of Part VID of the Act provides for the approval of AWAs. It is not disputed that the AWA received the approval for which Division 5 provides.

23. Section 170VT of the Act provides:

    “A party to an AWA must not breach the AWA.”

24. Section 170VV relevantly provides:

    “(1)An eligible court may make an order imposing a penalty on a person who contravenes a penalty provision.

    (2)The penalty cannot be more than $10,000 for a body corporate ….

    (3)An application for an order under subsection (1) that relates to an AWA … may be made by a party to the AWA …

    (4)In this section:

    penalty provision means … section 170VT …”

25. Section 170VZ authorises an eligible court to “grant an injunction requiring a person not to contravene, or to cease contravening, this Part.”

26. The Federal Court is an “eligible court” within the meaning of Part VID of the Act.

    CONSIDERATION

27. The first issue to be determined is whether in early 2001 Mr Carrigg held, as he contends, the position of Branch Manager, Pymble or whether, as the Bank contends, he held simply a position as a branch manager.

28. As is mentioned above, it is not disputed that the Bank sought applications for appointment as Branch Manager, Pymble and that Mr Carrigg applied to be appointed as Branch Manager, Pymble.  He was advised by an officer of the Bank that his application was successful and he thereafter received a letter signed by Mr Davies which congratulated him on his appointment to the position of Branch Manager, Pymble.  In my view it is plain that as at 23 June 2000 (ie the date of the letter which congratulated him on his appointment) Mr Carrigg held the position of Branch Manager, Pymble (cf Australian Colliery Staff Association v Queensland Mines Rescue Service (1999) 88 IR 78). It is not necessary for me to give consideration in the circumstances to the significance, if any, of the Bank’s policy that:

    “It is a condition of service with the Bank that any employee be prepared to be assigned, at any time, and from time to time, to any area and/or location of the Bank’s operation.”

29. Did Mr Carrigg by signing the AWA and returning it to Mr Davies, relinquish the position of Branch Manager, Pymble and become from that time, or alternatively from the date of operation of the AWA, simply a branch manager who the Bank could direct to manage any of its branches? 

30. The letter dated 23 June 2000 indicated that Mr Carrigg was by that letter:

    “being offered alternative remuneration and employment arrangements … incorporating the offer of Australian Workplace Agreement (AWA), TC‑I‑S packaging and revised bonus arrangements.”

    In the context of the letter as a whole, the “alternative” arrangements are, in my view, to be understood to be alternative to the arrangements which would otherwise have applied to Mr Carrigg following his appointment to the position of Branch Manager, Pymble.  Nothing in the letter of 23 June 2000 suggests that Mr Carrigg was thereby being invited to relinquish the position to which he had just been appointed to take up an alternative appointment (ie an alternative appointment as a branch manager without a nominated bank to manage).

31. Contrary to the submission advanced by the Bank, in my view, the Statement of Conditions does not compel a contrary conclusion.  The Statement of Conditions recognises the difference between a branch manager being directed to work (presumably temporarily) at a location other than his or her normal workplace, and a transfer or promotion of a branch manger to another branch manager role.  Clause 3 of the Statement of Conditions (see [16] above) refers to the employee party to the AWA being “transferred or promoted to another Branch Manager role”.  That is, the clause acknowledges that a degree of formality will attend the employee being moved from one branch manager role to another.  Such formality is inconsistent with the position for which the Bank contended; that is that Mr Carrigg did not have a “home” branch but was required to work as a branch manager at any branch to which he was from time to time directed.  Clause 1.4 of the Statement of Conditions (see [15] above) which recognises that the employee party to the AWA has a “normal workplace” tends also to support the conclusion that Mr Carrigg was appointed to manage a particular branch of the Bank.

32. While clause 4 of the Statement of Conditions (see [17] above) might at first glance be thought to suggest that the employee party to the AWA is employed, in effect, as a generic branch manager, the clause is not, in my view, incompatible with an employee party to the AWA being appointed to manage a particular branch.  Clause 4 has the effect that the employee party can be required to work as directed by the Bank at any location where the Bank or one of its related bodies operate ‑ but only in the capacity of a branch manager.  The capacity of the Bank to direct a branch manager to work as a branch manager at a branch that is not his or her normal workplace is not, in my view, inconsistent with the branch manager holding a position as branch manager of a particular branch.  The capacity to direct a branch manager to work away from his or her normal workplace is likely to be an important tool in allowing the Bank to cover unexpected or unpredictable contingencies of a temporary nature such as illness, resignation or reorganisation.  Whether in any particular case a direction is unlawful as being incompatible with the contract of employment of the branch manager (eg because of the length of time that it requires the branch manager to be absent from his or her home branch) will require consideration of all the relevant circumstances.  The Bank’s capacity to give such directions per se is not, in my view, inconsistent with a branch manager holding a position as branch manager of a particular branch.  However, whether any particular branch manager holds a position as branch manager of a particular branch will depend upon the contract of employment entered into by that branch manager with the Bank.

33. I conclude that by indicating his acceptance of the “new arrangements” being offered to him by the letter of 23 June 2000, Mr Carrigg accepted the offer of alternative remuneration arrangements and employment conditions but he did not relinquish the position to which the letter confirmed that he had just been appointed, namely Branch Manager, Pymble.  The coming into force of the AWA did not alter the situation.

34. The conclusion that at all relevant times Mr Carrigg held the position of Branch Manager, Pymble does not, of itself, answer the question whether in early 2001 and thereafter Mr Carrigg was in a “redundancy situation” within the meaning of clause 14 of the Statement of Conditions.  Clause 14 provided:

    “A redundancy situation refers to a situation where the Bank no longer requires to have a job or task performed and having reviewed all other alternatives declares you redundant.”

35. It would appear that the Statement of Conditions was drafted without express consideration being given to circumstances such as those that arose when the Bank and Colonial agreed to merge their respective businesses.  However, it is plain that the AWA, of which the Statement of Conditions is part, was intended to deal comprehensively with the topics of redundancy and redeployment in a “redundancy situation”.

36. The question of whether a “redundancy situation” arose so far as Mr Carrigg’s employment was concerned is to be answered by reference to the proper meaning of the expression “redundancy situation” in clause 14 of the Statement of Conditions.  That meaning is to be found by a search for the meaning intended by those who framed the document bearing in mind that they were apparently seeking to produce a relatively short and simple document and are unlikely to have been expert in, or concerned with, legal nicety (see Kucks v CSR Ltd (1996) 66 IR 182 at 184). Authorities which have given consideration to the ordinary meaning in an industrial setting of the word “redundancy” are, in my view, of little assistance in the determination of the proper meaning of the expression “redundancy situation” in clause 14 of the Statement of Conditions.

1. The critical question for present purposes is the intended compass of the phrase “where the Bank no longer requires a job or task performed” in clause 14 of the Statement of Conditions.  That is, in the circumstances of this case, do the words “a job or task” mean the precise job or task performed by Mr Carrigg (ie Branch Manager, Pymble) or do they have a more general ambit?

2. Having regard to the way in which the Statement of Conditions is worded generally, it seems to me that if the framers of the document had intended to limit a “redundancy situation” to the circumstances in which the job or task of the employee party to the AWA was no longer required to be performed, the phrase “where the Bank no longer requires your job or the task performed by you performed” or a similar phrase would have been used.  I am not persuaded that clause 14 is limited in its operation to a circumstance in which the Bank no longer requires to have the very job or task performed by the employee party to the AWA performed.  Nonetheless, common sense dictates that the job or task that the Bank no longer requires to have performed must be a job or task with some sensible connection with the duties of that employee.

3. In the circumstances of this case, in which the Bank reduced the number of its branches in the North Shore Area from seventeen to thirteen, there was, in my view, a job or task that the Bank no longer required to have performed within the meaning of clause 14 of the Statement of Conditions.  The job or task of managing each of the branches that was to be closed was a job or task that the Bank no longer required to have performed.  In other words, the Bank’s requirements for branch managers in the North Shore Area had diminished.  I observe that the alternative view for which Mr Carrigg contended would seem to involve an interpretation of clause 14 of the Statement of Conditions likely to be disadvantageous to employees generally as it would be likely to deny an employee redundancy status in a circumstance in which dismissal on proper notice would be unlikely to be found to be harsh, unjust or unreasonable.

4. Nothing in the AWA suggested, in my view, that the Bank was not entitled to decide, as it did, that the appropriate way to deal with the above situation was to select from the seventeen branch managers employed in the North Shore Area the thirteen that it considered the most meritorious and offer them ongoing employment as branch managers – leaving a number of employees to whom it was unable to offer ongoing employment as branch managers in the North Shore Area.  The appropriate means of implementing the above decision so far as the thirteen considered most meritorious was concerned would in the case of each particular branch manager depend upon the terms of his or her employment by the Bank.  In some cases no change to employment terms and conditions might be necessary, in others the terms and conditions of employment might allow a direction to perform duties at a fresh location, in yet others, a fresh contract of employment might need to be offered.

5. However, once it became plain that Mr Carrigg was not one of the thirteen branch managers to be retained to manage the thirteen branches in the North Shore Area, he was, in my view, in or potentially in a “redundancy situation” within the meaning of clause 14 of the Statement of Conditions.  It was not contended by Mr Carrigg that the Bank did not “review all other alternatives” or “endeavour to redeploy him” within the meaning of clause 14.  The contention advanced by Mr Carrigg was that the Bank still required his former job, namely the job of managing the Pymble Branch, to be performed and thus no redundancy situation arose within the meaning of the AWA.  For the reasons given above, I reject this contention as being based on an unduly narrow interpretation of clause 14 of the Statement of Conditions.

   CONCLUSION

6. Mr Carrigg by his application claimed a declaration “that the position of Branch Manager, Pymble … was not made redundant within the meaning of clause 14” of the AWA.  As my above reasons disclose, this claim, in my view, is based on an erroneous construction of clause 14 of the Statement of Conditions which form part of the AWA.  Clause 14 is drawn in terms of an employee becoming redundant; it is not drawn in terms of a position becoming redundant.  For the reasons given above, I conclude that a “redundancy situation” within the meaning of clause 14 of the Statement of Conditions did arise so far as Mr Carrigg’s employment was concerned.  The Bank’s handling of that “redundancy situation” was not challenged in this proceeding.

7. In the circumstances Mr Carrigg has not demonstrated an entitlement to any of the relief claimed by him.  The application will for this reason be dismissed.

I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

Associate:

Dated:             27 June 2002

Counsel for the Applicant:	Mr J W Nolan
Solicitor for the Applicant:	Geoffrey Edwards & Co
Counsel for the Respondent:	Mr R Ellicott QC with Mr J Fernon
Solicitor for the Respondent:	Freehills
Date of Hearing:	11 April 2002
Date of Judgment:	27 June 2002