Finance Sector Union of Australia v Commonwealth Bank of Australia

The Finance Sector Union of Australia and Mr Kenneth Macey, as representatives of a class of employees, brought proceedings against the Commonwealth Bank of Australia alleging that the Bank breached the Commonwealth Bank of Australia Officers' Award (1990) by failing to terminate their employment and pay them severance payments as a result of redundancy. The employees in question were employed in the Bank's Information Services Department, which outsourced its operations to EDS (Australia) Pty Ltd in October 1997. The dispute focuses on those employees who did not transfer to EDS, alleging that they should have been made redundant and received severance payments. The primary legal issues before the court were whether the employees' positions were genuinely abolished and if so, whether the Bank was obligated to terminate their employment and provide redundancy payments under the Award.

The court examined the terms of the Award and the circumstances surrounding the outsourcing of the Information Services Department. It considered whether the abolition of the employees' positions constituted redundancy under the Award and if the Bank's actions complied with the requirements for redundancy. The court found that the Information Services Department's functions were indeed outsourced, leading to the abolition of the employees' positions. However, the court concluded that the employees did not become redundant because they continued to work under the direction of EDS, albeit under different terms and conditions. The court held that since the employees remained employed by the Bank and continued to work under the Bank's direction, albeit indirectly, their positions were not genuinely abolished. Therefore, the Bank was not required to terminate their employment or pay redundancy payments.

In light of the above, the court dismissed the proceedings, finding that the employees' positions were not abolished in a way that triggered redundancy payments under the Award. The court's decision was based on the continued employment of the employees by the Bank, albeit under the operational control of EDS. The court found that the employees remained under the Bank's employment and thus were not entitled to redundancy payments.