Gamboni v Bendigo and Adelaide Bank Ltd
[2011] VCC 1442
•12 December 2011 (Revised)
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
COMMERCIAL LIST
GENERAL DIVISION
Case No. CI-10-05580
| WILLIAM BERNARD GAMBONI | Plaintiff |
| v | |
| BENDIGO AND ADELAIDE BANK LTD | Defendant |
| (ACN 038 149 178) |
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| JUDGE: | HIS HONOUR JUDGE GINNANE |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 9, 10, 11 and 15 August 2011 |
| DATE OF JUDGMENT: | 12 December 2011 (Revised) |
| CASE MAY BE CITED AS: | Gamboni v Bendigo & Adelaide Bank Ltd |
| MEDIUM NEUTRAL CITATION: | [2011] VCC 1442 |
| (Second Revision 14 December 2011) |
REASONS FOR JUDGMENT
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Catchwords: CONTRACT – Employment – re-organisation of banking business – claim for redundancy payment – whether work or position or a major portion no longer required.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G H Golvan QC and | Gary Rothville & Associates |
| Mr T J Donaghey | ||
| For the Defendant | Mr P M O’Grady | Hall & Wilcox |
| HIS HONOUR: |
1 Mr William Gamboni, the plaintiff, seeks to be paid a redundancy payment following the end of his twenty three years’ employment with the defendant in October 2010.
2 The defendant, the Bendigo and Adelaide Bank Limited (“the Bank”), contends that Mr Gamboni was not made redundant and that there was work for him to do. The Bank argues that he repudiated or abandoned his contract of employment by not returning to work after completing long service leave in October 2010.
3 The Bank was created by merger in 2007. In 1995 the Bendigo Building Society had become the Bendigo Bank.
4 Mr Gamboni has been employed in banking since he left school. He commenced work with Sandhurst Trustees Company Ltd in 1987. Sandhurst Trustees is owned by the Bank. Between 2003 and 2006, Mr Gamboni was Senior Property Finance Manager employed by the Bank.
5 On 11 September 2006, he was appointed Senior Manager, Property Finance on a salary of $124,841. He was in charge of the Property Finance Business Unit with a portfolio of mainly large commercial and construction loans, with the funds provided by Sandhurst Trustees. He had responsibility for staff and a budget.
6 The Position Description applicable to Mr Gamboni’s job of Senior Manager, Property Finance, included the following, under the heading “Organisational and Position Overview”:
“As a Senior Manager, Property Finance you will play a leadership role in the long-term development of the business units you are managing. You will require a sound knowledge of the commercial property market to establish and implement strategies to achieve growth of your portfolio. The ability to establish and maintain quality referral networks to ensure the continuing growth of your portfolio. By proactively servicing these needs you will establish and maintain sustainable relationships. You will also assist in the development of support staff by proactively monitoring & mentoring your subordinates.
Reporting to the Chief Manager, Retail Lending, the position’s key focus is to develop and maintain a high value, low credit risk business portfolio by building vigorous referral partnerships with the major introducers & customers which correlate to the top 20% of your customer base by number and 70% of your customer base by value. You will mentor & monitor Manager Property Finance in his control & management of the balance of the portfolio relationships comprising both new and existing customers providing for their property financing needs. You will have an in depth understanding of the market in which the property finance department operates & have exceptional financial analysis & interpersonal skills to deal with customers at the highest level within the commercial property market & assist the manager property to further develop his skills by delegating, prioritising & mentoring his business activities.”
7 The Position Description also contained sections listing Key Result Areas, Key Capabilities, Special Requirements and Person Specification. The Special Requirements were to prepare annual capital Expenditure budgets as required by the Bank, monitor Budget results and Reporting requirements and respect current DLA parameters
8 Mr Gamboni’s contract of employment provided:
“1 Position Your position will be that of Senior Manager Property Finance as described in the attached Position Description, as varied from time to time. Please note that acceptance of the offer repudiates all previous contracts of employment with the Bank.
… 3 Continuity Your role, levels of responsibility, reporting lines, and duties may be significantly varied throughout your service with the Bank. It is agreed that irrespective of any such variations, by negotiation or otherwise, the terms and conditions set out in this Agreement will continue to apply as contractual provisions, unless otherwise amended in writing.
4 Duties
(a)
You will report to and be subject to the direction of Peter Opie, Chief Manager Lending, or such other employee of the Bank as may be nominated from time to time.
(b)
You will be required to carry out all lawful directions of the Bank or its agents and will discharge such duties and functions as may be delegated to or assigned to you including:
(i) work for any related, associated or subsidiary companies of the Bank (‘Related Body Corporate’);
(ii) work in positions other than that to which you were initially appointed.”
6. Bank Policies
You are required to perform your duties in accordance with all Bank policies, written procedures, rules, regulations and codes of practice, including the bank’s code of Conduct, as issued and amended from time to time. All Bank policies, written procedures, rules, regulations, codes of practice, and Bank’s Code of Conduct constitute terms of your contract of employment.
The Bank’s policies etc may be accessed on the Bank’s intranet or
you may request a copy from your manager.”
9 Sandhurst Trustees operated under the Trustee Act 1958 rather than under the Banking Act 1959 (Cth) and under APRA’s regulations. Its lending activities had to remain separate from those of the Bank and its loan portfolios were set against common funds. However, Sandhurst Trustees still required Bank approval of its loans.
10 The evidence established a difference between the work of the Property Finance Unit and of Business Banking. The former was almost exclusively concerned with providing commercial loans to clients engaged in property dealings. The Business Banking Section provided all banking services for clients who had a business base, for instance, personal lending facilities, home loans, credit cards and the like. Mr Gamboni had no experience in business banking.
11 Mr P Opie, formerly the Chief Manager Lending, Retail Bank, gave evidence that:
“The business banking role offered the full suite of banking, so a business banker would have someone’s probably small commercial loan, their overdraft to look after, their home loans would be part of the package, credit cards and payroll facilities mixed in with any other banking requirements that they would want.”[1]
[1] Transcript (“T“) 34
12 The parties agreed that at the time Mr Gamboni ceased work, the Bank’s redundancy policy was a term of his contract of employment. If the ending of his employment constituted a redundancy within the meaning of the redundancy policy, he was entitled to seventy-three weeks’ pay as severance pay and five weeks’ pay in lieu of notice. The parties agreed that the amount of that severance pay would be $175,257.56. In addition, he would be entitled to damages for breach of the notice provisions, of $12,003.94. He also claimed interest.
13 The outcome of the case turns on whether Mr Gamboni was “redundant” within the terms of the Bank’s redundancy policy. The redundancy policy is contained in a five-page document. It applied from 22 October 2008.
14 The purpose of the redundancy policy is stated in its opening paragraph to be:
“Situations may arise that cause a position or positions to be made redundant. The Bank is committed to doing everything it can reasonably do to support employee(s) in this circumstance, including seeking to identify suitable alternative employment within the Bank. If suitable alternative employment can not be found for an employee, a redundancy package will be offered in accordance with the terms outlined in this policy.”
15 “Redundancy” is defined to mean:
“A situation where the work being done or position held by an employee,
or a major portion of it is no longer required:
a as a result of changes in economic or business conditions; or b to be undertaken in its current location, or a location within a
reasonable distance; orc because of reorganisation (whether internal, external, group wide
or at Business Unit level); ord because of changes to business or management practices; or e because of technological or related changes. It is important to understand that a position becomes redundant, not an employee. An employee will not be offered a redundancy package unless their position has become redundant and another suitable alternative position is not available.”
16 There are also relevant provisions of the policy in paragraph 6 which is titled “Policies & Procedures” as follows:
“How will I know if my position is made redundant?
If the Bank has determined that it is likely to make your position redundant, then the Bank will hold discussions with you via your Manager and/or People & Performance. This will occur as soon as practicable and include information on the reasons the position is intended to be made redundant, your current employment arrangements, any available options to avoid terminating employment or to minimise the total number of terminations at the Bank and measures to mitigate any adverse effects on you. The Bank will consult with you during the process and make every reasonable effort to find alternative employment within the group.
Am I likely to be transferred to other duties?
Instead of terminating your employment, the Bank may redeploy you to work on an equivalent grade or salary. Alternatively, if the Bank offers and you accept a transfer to lower paid duties for reasons of redundancy, your wage will be reduced to the mid-point of your new position over a six month period. The six month period shall also apply to any relevant terms and conditions of employment that differ from your former position and your new position. The Bank is not obliged to redeploy or transfer you but may decide to offer a re-deployment or transfer position at its option.”
17 Considerable case law has developed about the meaning of the term “redundancy”. A number of the authorities were considered by Habersberger AJA in Foster’s Group Ltd v Wing,[2] and see also the High Court decision in Amcor Ltd v Construction Forestry Mining and Energy Union.[3]
[2] (2005) 148 IR 224
[3] (2005) 222 CLR 241
18 Recent authority suggests that there is a recognised meaning of redundancy, even what is called a discernible meaning at common law.[4] This meaning recognises that redundancy is not simply concerned with the abolition of a position, and may arise upon the redistribution of functions. It has been said that no redundancy will occur where employees still have duties to perform after a re-organisation.
[4]19 In Jones v Department of Energy and Minerals,[5] Ryan J stated that:
“However it is within the employer’s prerogative to rearrange the organizational structure by breaking up the collection of functions, duties and responsibilities attached to a single position and distributing them among the holders of other positions; including newly- created positions. It is inappropriate now to attempt an exhaustive description of the methods by which a reorganization of that kind may be achieved. One illustration of it occurs when the duties of a single, full-time, employee are redistributed to several part-time employees. What is critical for the purpose of identifying a redundancy is whether the holder of the former position has, after the reorganization, any duties left to discharge. If there is no longer any function or duty to be performed by that person, his or her position becomes redundant in the sense in which the word was used in the Adelaide Milk Co-operative case.”[6]
[5] [6]
20 However, both parties agreed that primary attention had to be paid to the contractual definition of “redundancy”, and it was only if Mr Gamboni ceased to work due to redundancy, as defined, that he was entitled to the damages set out above.
21 This must be the correct position, not least because contractual definitions of redundancy differ. The definition in Foster’s Case was different to that in the Bank’s policy. The Bank’s definition of redundancy is wide encompassing both work and position. As Gleeson CJ and McHugh J said in the Amcor Case:
“In the industrial context, redundancy of position is not a concept of
clearly defined and inflexible meaning….
Redundancy of position is not a legal or industrial term of art, although there are many cases which examine the concept of redundancy, usually for the purpose of distinguishing it from other causes of retrenchment.”[7]
[7]
Mr Gamboni’s recent responsibilities with the Bank
22 Mr Gamboni worked in a small property financial department. He successfully managed it. He reported to Mr Opie, Chief Manager of Lending of the Retail Bank. Much of his work was referred by a Melbourne solicitor, Mr R Fixler, and was to arrange large commercial loans to members of the Jewish community. The funds for these loans were provided through the Sandhurst Trustees Company. The loans were provided on the basis of self-funding first mortgages over commercial property. The loan portfolio was around $270 million.
23 In January 2007, Mr B Pinner, who had worked with Mr Gamboni, moved to Melbourne. Mr D Myers took over his role until May 2009, when he became a business banking manager in Bendigo. Mr Gamboni was also assisted by Mr Cail, thus making three employees in the Commercial Property unit.
24 When Mr Opie was away, Mr Gamboni, before he became Senior Manager Property Finance, had reported to Mr Dupuy in the Business Banking Department.
25 In 2008, during the Global Financial Crisis many depositors withdrew their money from Sandhurst Trustees because it did not have the Government guarantee of a bank. That meant that it no longer had funds available to provide loans according to its previous practices. The Bank purchased mortgages from Sandhurst Trustees to increase its liquidity.
The events in March to August 2009 on which Mr Gamboni’s claim for a redundancy payment is based
26 In March 2009, Mr Opie decided to leave his employment after forty-three years’ service. He was paid a redundancy package and finished employment on 25 June 2009.
27 Mr Gamboni asked Mr Opie if he could also obtain a redundancy package. He emailed Mr Opie and Mr Pugh on 16 March 2009, stating:
“Further to my meeting with Peter to discuss restructuring my department to incorporate my departure. Peter thinks that this will be the perfect time to integrate my unit into Business banking provided we have a plan which takes into consideration all stake holders & has benefit for the bank & we are not looking to grow my portfolio in the current economic climate.
Background issues:
I have met with Brock Pinner (The most likely candidate to successfully should I depart.
replace me).
He is currently on leave without pay & due back in September 09 (I believe he could be persuaded to come back earlier if needed).
Robert Fixler (my main introducer) is aware of my intentions & agrees that Brock would be the most acceptable successor for both he & my customers.
I have also been made aware that Nathan Jenkins (BBM Bendigo) has applied for 12 months leave (to commence ASAP).
Proposal:
I will accept a redundancy package & my position as Senior Manager
Property Finance will be abolished (saving 1 FTE in my department)Brock Pinner will be appointed as Manager Property Finance & he & Nathan Cail should be capable of managing the existing portfolio assuming there is no requirement to build the loan book (It is highly unlikely in the current economic climate that the bank will want to increase exposure to the property markets, STL are now effectively ‘out of the market’ with their lending products & are liquidating the common funds at a rapid rate, in my opinion STL have lost all credibility in the market as a lender & the investor market are reluctant to invest in the common funds due to ‘non bank’ status & perceived investment risk with no depositor insurance).
As you know I have developed a niche market with my client base which has been reliant on STL’s ‘stand alone’ credit policy & lending products.
I now lack the point of difference to attract customers away from the competitors as our bank lending policy now mirrors the major banks & we will struggle to compete on price with the ‘big4’ (as our inevitable squeeze on margin will prove in the coming months).
(Mr Gamboni then suggested that Dale Myers be moved into the
business banking team to replace Nathan Jenkins.)
Summary:
I do not wish to expand any further on restructuring issues as I am not qualified or experienced enough in Business banking to discuss the Bendigo Business banking team & how this should all be considered in ‘the big picture’ for a restructure.
I also appreciate that the final decision & structure will be for Retail Banking to make following consultation with all the stakeholders at Head Office, State & Regional Office.
This restructure has the following benefits:
1 Saves 1 FTE at Senior Management level (B Gamboni)
2 Fixes the problem created by Nathan Jenkins extended leave.
3 Fixes the problem of finding a position for Brock Pinner (a very valuable, young & well trained asset which the company can ill afford to lose).
4 Fixes the problem of finding an acceptable replacement to manage a specialized & profitable unit (Property Finance).
5 Gives Dale Myers a job at equivalent seniority to his current position in a job that he has a proven ability to perform.
6 Allows me to exit from a position I am starting not to enjoy due to structural, economic & credit changes brought about by STL’s exit from the market.
7 Takes my ‘orphan’ unit to a position in retail banking which fits more easily within the retail reporting lines & management.
Due to my age I am not readily accepting of change & the changes within our organization that I see are causing me great anguish, it’s time I went for my own sake & the sake of the company as it progresses down a road I do not wish to travel.
I would be happy to expand & discuss any of the above issues & will be flexible in timing to make certain my departure & the changes in my department cause a minimum of disruption to my clients & the company.”
28 Mr Opie gave evidence that Mr Gamboni’s proposal was that the Commercial Property Unit was to be disbanded; part was to be run by Mr B Pinner and the rest to be distributed to other business bankers. Mr Pinner’s role would be to continue as a business banker to generate more banking business and build his portfolio.
29 Mr Gamboni gave evidence that Mr G Penno, then the Head of Operations, People & Performance, told him that in order to qualify for redundancy he had to put a proposal to do away with his position.[8]
[8]30 On 27 March 2009, Mr Opie wrote to Mr Russell Jenkins, the Chief General Manager, Retail and Distribution, of the Bank to whom he reported, regarding the ongoing viability of the Commercial Property Finance Unit presently managed by Mr Gamboni. He stated, inter alia:
“I write to you regarding the ongoing viability of the Commercial Property Finance Unit presently managed by Bernie Gamboni. As you are aware this business unit’s major focus is the funding of commercial property and commercial construction. The customer base includes a number of high-profile members of the Jewish community. They are longstanding and valuable customers of the BBL Group and have to date been primarily funded via STL. Recently STL withdrew from all commercial construction finance and amended their lending policy and appetite for some forms of commercial lending to the extent that the business unit can no longer transact with STL. All future funding opportunities will need to be considered via BBL.”
31 The email then referred to meetings to discuss the Commercial Finance and Business Banking Unit and to the recommendations from those meetings that required Mr Jenkins’ endorsement. These recommendations were:
“● The Commercial Property Finance business unit will be
incorporated back into the Bendigo-based business banking unit.● A portion of the current portfolio will be relocated to other business banking portfolios in the Melbourne region, with the major Jewish relationships being retained by the Bendigo-based team. ● Dale Myers will take over the portfolio vacated by Nathan Jenkins. ● Brock Pinner (currently on leave without pay), will return to full- time employment and manage what remains of the former Property Finance Unit. ● Bernie Gamboni’s position will be made redundant.”
32 The email then detailed positives that would come from these restructures. One was that if Mr Gamboni accepted a redundancy, there would be the saving of one full-time employee. The email concluded:
“This restructure is seen as a very positive move and is supported by all
involved.”
33 Mr Gamboni received a quotation of the amount of money what he would receive if he was made redundant from Ms M Entwistle, the senior payroll officer.
34 In about April 2009, Mr Jenkins told Mr Opie that there would be a restructure, but that there would be no redundancy for Mr Gamboni. Mr Jenkins was not called as a witness.
35 On 8 April 2009 Mr Gamboni emailed Mr Opie with a series of questions and received a reply on 9 April 2009 stating that his reporting line would remain the same until he went on extended annual leave. Mr Gamboni stated in his email:
“I also assume that the breakup of my department along the lines I proposed in my email to you 16/03/09 (Copy attached) is in effect being implemented in all respects except for my retrenchment.”
Mr Opie replied “yes”.
36 At about the same time, Mr Gamboni decided to take accrued long service leave at half pay, giving him twice the normal amount of long service leave, which was an option available to employees, together with accrued annual leave. This leave was originally to commence on 6 July 2009.
37 On 17 April 2009, Mr Jenkins wrote to Mr Opie about the leave:
“As discussed, this plan for Bernie is approved on the understanding that when he returns at the end of April 2010 it will be to a Business Banking position.
I will leave it to you to work out with Phil Whiting what to do with regard to Dale Myers as Bernie has indicated.”
38 On 17 April 2009, Mr Gamboni, having been sent Mr Jenkins’ email, replied to Mr Opie:
“I am not a business banker (& never have been). I would expect that I
would recommence into my same role on my return from leave.
Same as anybody else who returns from annual leave & LSL.”
39 On 22 April 2009, Mr Gamboni sent an email to Mr D Pugh, who was Mr Opie’s assistant and succeeded to his position, which in relevant respects was:
“Further to our discussions this afternoon on ‘what is happening’ I advise
the following:
Below was my last email to Peter on the restructure of my department.
Peter was going to discuss the clarification of Russell’s comments about my position on my return.
As you know, I am not happy about having put together a proposal for the demise of my department & my redundancy & then get told that my proposal as presented is being implemented, however the offer of a redundancy for me has been taken away by Mike Hirst (according to the information supplied to me by Peter ??)
I find this very confusing, not to mention disappointing as I believe that I Business banking is in the hands of Phil Whiting as Peter & I both agreed that if Phil was taking over my unit that he would be managing both Brock & Dale as they would become his assets, long with my department.
have been treated very poorly over this issue.
This transition needs to be managed much more proactively as I don’t think that either Brock or Dale have a clue what is going on & neither do I for that matter.
Robert Fixler is also concerned that he & his customers will not be serviced & he may lose customers if this is not handled better.
As you know, Robert is only happy for me to go if Brock is taking over.
I look forward to seeing some progress & some enlightened discussion with all the stake holders in this matter before this entire issue unravels.
….”
40 Mr Hirst was Chief Operating Officer and became Managing Director of the Bank in June 2009.
41 On 24 April 2009, Mr Whiting, the Regional Manager for Region 340 which included the Bendigo and surrounding areas, emailed Mr Opie stating:
“I will be looking to issue a letter of offer to Dale Myers for the BBM position to replace Nathan Jenkins and also need to look at what salary to offer Dale and Brock once Bernie Gamboni’s extended leave position is finalised.
Given this unit will be transferring to Region 340 from 1-Jul-09 could you please authorise HR to provide myself with current salary details for unit 864 (ie. Bernie Gamboni .., Dale Myers …, & Nathan Cail…).”
42 On 24 April 2009, Mr Whiting emailed Mr Opie in the following terms:
“Clause 9.5 of the Banks Leave Policy includes the following provision for return to work options following use of Special Purpose Leave (i.e. unpaid leave.)
‘…if you are a salaried member, your return to work status will be negotiated on an individual basis and confirmed to you in writing before you commence your leave.’
As discussed I have confirmed with HR that when periods of extended leave up to 12 months are approved the Bank will look to return a staff member to the same substantive position as they held prior to taking leave.
When periods of extended leave greater than 12 months are approved the Bank is not obliged to find a position, as outlined in clause 9.5 of the policy…
Given Bernie is expecting to take less than 12 months unpaid leave, clause 9.5 would indicate that we need to confirm his return to work status in writing.
I am happy to agree to Bernie returning to manage his current portfolio on return from leave, however we do not plan to retain the title Manager Property Finance so the title would be Business Banking Manager however the clients and work would be substantially the same in line with our policy requirements.
This return to work provision for Bernie will complicate our plan for appointing Brock to cover Bernie’s absence, however I believe should Bernie return to manage his existing portfolio the opportunity exists for Brock to continue with our Business Banking team with other responsibilities.’”
43 Mr Gamboni wished to ensure that his clients had someone to look after their interests while he was on leave. He spoke with Mr Brock Pinner, an employee of the Bank, who was on leave without pay. As stated, he had previously worked with Mr Gamboni in the Property Finance Unit, but he had transferred to employment with the Bank in South Melbourne and then taken leave without pay to commence a business in Bendigo. Mr Pinner agreed to return to employment at the Bank. Mr Pinner had experience dealing with the major clients in Mr Gamboni’s portfolio and they were comfortable with him controlling their banking business.
44 Mr Gamboni stayed for a short period of time in July and August “babysitting” the Unit.[9] He provided some handover training and client introductions to Mr Pinner, and then went on long service leave on 9 August 2009. He anticipated was that Mr Pinner would take over the portfolio of clients and that his Unit would wind down over a period of time.
[9]45 From about 1 July 2009, the Property Finance Unit was transferred into the Business Banking section of the Bank. Mr Whiting gave evidence that he had been looking to set up specialist portfolios in the business banking team, including for commercial property customers and that Mr Gamboni’s portfolio became a natural fit.[10] He also stated that Mr Gamboni’s volumes in his portfolio had been dropping in recent times and he thought two people could manage the portfolio.[11]
[10] [11]46 Mr Pinner worked as a Property Finance Manager with the assistance of Mr N Cail, who had previously worked with Mr Gamboni. Occasionally they had administrative assistance on a part-time basis from another employee. They reported to Mr A McGregor, Senior Manager Business Banking.
47 Mr D Myers had moved into Business Banking on 18 May 2009. Mr Gamboni stated that there was no need to replace him because he and Mr Cail, and later Mr Pinner and Mr Cail were capable of performing the work of the Property Finance Team. Mr Gamboni’s evidence was that Mr Pinner took over Mr Myer’s job as well as incorporating control of his client base.[12]
[12]48 Mr Gamboni’s evidence was that when he went on long service leave he was not told the job to which he would return. He had had no experience of business banking. He saw no future for the Commercial Property Unit, because the loans that he was generating were predominantly Sandhurst Trustee loans and it had stopped lending. Existing loans were going to be rolled over into his portfolio. He was not aware of when he could start lending again. His Department had been totally restructured and had done away with his job in accordance with his proposal but he had not been made redundant.
49 Mr Gamboni gave the following evidence under cross-examination:
Q: “You’re not suggesting are you, Mr Gamboni, that you’d spoken to
Mr Pinner about taking over only part of your job?---A:
Yes, absolutely. I made it as plain as day that Brock’s job was not my job. Brock’s job was Dale Myer’s job and because there was not going to be any growth in the department, and I considered it to be a sit and wait proposition until the loan book ran down and people got refinanced elsewhere, or wherever they could get finance, that my sole concern was for the client base and to be certain that Brock was going to look after the client base which was a portion of my job. Because the rest of my job had been restructured away into business banking …
Well …? … which I assume, which was my proposal of 16
March.”[13][13]
50 Mr B Pinner gave evidence that after he returned and Mr Gamboni was on leave, the core or the majority of the customers, who had been there for quite a period of time, remained. He was able to negotiate some further facilities for existing borrowers. The portfolio of customers remained very similar. None of the portfolio was re-allocated to other business banking portfolios. He reported to Mr McGregor the Senior Manager Business Banking.[14] No person was made the Senior Manager Property Finance.[15]
[14] [15]51 Mr Rodda stated that the portfolio of customers that Mr Pinner had was pretty much the exact same portfolio of customers as Mr Gamboni had. Mr Pinner’s role was “no different whatsoever” to Mr Gamboni’s role.[16] The person performing that at the time of the trial was carrying out exactly the same role as Mr Gamboni performed.[17]
[16] [17]52 Mr Pinner continued to describe his role to customers as Manager Commercial Property Finance and they were not told of positional or any reporting line changes. This provided a continuity of relationship and management.[18]
[18]
Events in 2010
53 On 6 August 2010, while Mr Gamboni was still on leave, Mr G Penno, emailed Mr Pugh and Mr Rodda, stating:
“Following our respective discussions I have checked and there is nothing on P& P files in relation to any special provisions for Bernie in relation to his Long Service Leave.
Unless you guys have anything on your files or systems to say otherwise Bernie is due to return on 18 October 2010 to the Bank. My understanding is that Bernie is employed as a Business Banking Manager and as such is entitled to return to a comparable position on his return. Any decision in regards to the portfolio that he returns to is at the discretion of the Bank as long as his salary and other entitlements are similar to those he had when he proceeded on long service leave.
At the end of the day the approval for Bernie to take Long Service Leave was given by the Bank due to a request from him and as he has been gone for some time the Bank is entitled to put in place any necessary structure changes to ensure we run our business appropriately.”
54 It appears that Mr Penno did not know that Mr Gamboni was Senior Manager Property Finance.[19]
[19]55 On 9 August 2010, Mr Gamboni met with Mr T Rodda, the Area Manager, Regional Victoria, who enquired whether he was returning to work. Mr Gamboni told him he did not want to come back. Mr Gamboni complained that despite the restructure being put in place, he had not received a redundancy payment. At Mr Rodda’s request, he forwarded him relevant documentation about the restructures he had proposed in March 2009.
56 After considering that material, on 12 September 2010, Mr Rodda recommended to Mr D Bice, Head of Retail Banking, and Mr G Penno, that Mr Gamboni be paid a goodwill payment of between $80,000 and $100,000. In his recommendation, he stated:
“Brief History
Bernie is due back from extended leave in October and is very reluctant to come back. Bernie would prefer the bank to give him a redundancy package which we all have agreed is not going to happen. Bernie is extremely bitter towards the bank and has threatened legal action due to events prior to his departure on extended leave. Bernie is adamant that Peter Opie had agreed to give him a redundancy and states that he has written evidence to support a legal case. The region are also not going to see Bernie back as he was very negative towards management and caused quite a deal of concern amongst the Business Banking Team.
Recommendation
I would support a good will payment to Bernie of approximately $80k o $100k that would not be considered a redundancy. Bernie would need to sign an agreement to state this is the end of the matter. If Bernie returns then Brock Pinner would be out of a role and I believe he is much more valuable to the bank than Bernie due to Bernie’s state of mind. We have a full salary budget for Bernie and will not replace that role so to pay this figure will be within the budgeted salary.
I would like to get back to Bernie ASAP as Brock is on contract and getting quite anxious about his position at the bank. In addition, Bernie has been in contact with Robert Fixler and I would like to make the offer so as to ensure the customer base that Brock looks after also has a clear indication of who their banker is going forward.”
57 Mr Rodda and Mr S Atkinson, the acting Regional Manager, met with Mr Gamboni again on 17 September 2010. Later that day, Mr Rodda rang Mr Gamboni and offered the sum of $75,000 “all up”. Mr Gamboni told him that he was not able to accept that payment and would return to work on 18 October 2010.
58 On 17 September 2009, Mr Gamboni emailed Mr Rodda, stating:
“Thank you for meeting me this afternoon.
I write this email to confirm our discussion points:
You have confirmed with me that (in the company’s view) I am not entitled to the redundancy as previously discussed prior to me taking my long service & annual leave.
You advised that Peter Opie (my line manager) was not authorised by the company to make me that redundancy offer.
You were authorised to request me to ‘name a figure’ that I would be happy with to terminate my employment with the Bank & that the Bank would consider my requested ‘figure’, however, this payout would not be a redundancy payout.
I advised that I would not ‘name a figure’ as I believe I am entitled to a full redundancy package, however, if the company wished to make me an offer I would consider it.
You have since telephoned me & advised that Dennis Bice has agreed to offer me ‘$75,000 all up’ to terminate my employment.
You will appreciate that this figure is way short of my redundancy figure which I calculate to be circa $197,000 (76 weeks salary + 15% of my accrued sick leave based on the bank’s redundancy policy when I left to commence my leave).
I advised that I would not & could not afford to accept such a low offer & therefore I would be returning to my old position as of 18/10/10.
Again, I advise that I have no ill feeling towards you or any of the above mentioned staff members as I don’t believe they had any involvement in the company’s decision to renege on the original redundancy offer prior to me taking long service leave.”
59 On 30 September 2010, Mr Rodda emailed Mr Gamboni, setting out the history of the discussions and disputing that he was entitled to a redundancy payment. The email confirmed that he would return to the bank on 18 October 2010. It stated in part:
“In reply to your email below I confirm that you, I and Steve Atkinson met on Friday 17th September 2010 to discuss your return to the Bank from approved Long Service Leave. I also confirm that you informed myself and Steve that you did not wish to return to the Bank in your pervious role and I advised you that as your role was available to you that your position was not redundant and as such no redundancy payment would be made to you.
While the Bank is aware that you requested and were provided with some redundancy calculations from the Banks Payroll department prior to your departure on long service leave, the Bank has not at any time advised you that your position was or is redundant. The mere fact that you obtained these calculations does not justify your stated position that the Bank has ever advised you that your position was or is redundant. The Bank agreed to a period of Long Service Leave for yourself to allow you time to refresh and recoup with the understanding that you would be returning to the Bank on completion of this long service leave.
Due to your stated unwillingness to return to the Bank in any role, I advised you that the Bank was prepared to discuss a possible payment to assist you if you did not wish to return to your role. This offer is due to your length of service at the Bank and in no way reflects that you or your role are redundant. At our subsequent telephone conversation I advised you that I had spoken to Dennis Bice in regards to this matter and that the bank had agreed to make you an Eligible Termination Payment of $75,000 gross upon receipt of your resignation.
In your email below you have confirmed that you will now be returning to the bank on 18th October 2010. A letter of offer confirming this date, your reporting line and the performance expectations of you in this role will be provided to you.”
60 No letter was provided. Mr Rodda stated that that part of the email was a mistake.
61 On 4 October 2010, Mr Gamboni wrote to the Bank’s company secretary Mr Oataway about his situation. Mr Oataway replied that he could not assist him
62 Mr Gamboni obtained legal advice shortly before 18 October 2010 concerning his right to a redundancy payment. He made up his mind not to return to work shortly before 18 October 2010. Mr Gamboni’s solicitor wrote letters about his entitlement. In a letter to the Bank of 14 October 2010 he stated:
“My client requires that he be advised in advance of Monday of the proposal which is contemplated for his ‘return’ to work and the legal footing upon which it is said to be based.”
63 On 15 October 2010, Mr Penno replied to Mr Gamboni’s solicitor stating that the Bank did not consider that he had been made redundant, that he was required at work on 18 October 2010 and that if he did not attend the Bank would consider that he had abandoned his position. Further correspondence occurred. On 20 October 2010 Mr Penno wrote to Mr Gamboni’s solicitor stating that if he did not present to work by 22 October 2010 the Bank would consider that he had abandoned his employment from that day. On 26 October 2010, Mr Penno wrote to Mr Gamboni’s solicitors stating that the Bank considered that Mr Gamboni had abandoned his position and had paid out his accrued but unused entitlements effective that day.
64 Mr G True, the Payroll Manager of the Bank, gave evidence. In the Bank’s employment history, Mr Gamboni was recorded as a Business Banking Manager from 3 August 2009 to 11 October 2009 and from 12 October 2009 to 31 October 2010. Prior to that he had been described as Senior Manager Property Finance. Mr Pinner was recorded as being Business Banking Manager from 3 August 2009 until 22 August 2010. Mr True stated that he would have had an instruction when Mr Pinner was to move into that role to make a change to the title of that position number. He did not know who had instructed him to describe Mr Gamboni as a Business Banking Manager.
65 Mr Gamboni was also described as Business Banking Manager in his Position Title on his Exit Pay statement. It recorded him as reporting to Mr McGregor, the Senior Manger Business Banking. This information had been taken from the payroll system.
66 Mr Rodda gave evidence in effect that Mr Gamboni’s role as Senior Manager was a step on a career path; it was a very senior position in the Bank. He maintained that there was no difference between Senior Manager Property Finance and Senior Business Banking Manager, each was responsible for a client base and budget responsibilities.
67 Mr Whiting gave evidence that if Mr Gamboni had not gone on leave he would have continued to manage his portfolio. However, he would have come into the region as part of Business Banking. He would probably have been a Senior Manager, Business Banking.[20]
[20]68 Mr Whiting’s evidence was that when Mr Gamboni went on extended leave his position was ongoing. The property finance team had been reallocated as a team to the Bendigo region 340, where Mr Gamboni had worked between 1 July 2009 and going on leave in August 2009. If he had not gone on leave he would have continued in his old position. [21] Mr Pinner was brought in on a fixed term contract to replace him while he was on leave.[22]
[21] [22]69 Mr Pinner performed the same role but he did not have the word senior in his title. After his leave ended Mr Gamboni was to be given a role and title of the exact same salary and prestige as he previously had.[23] Mr Rodda described Mr Gamboni’s position as a required position.[24]
[23] [24]
Questions to be Decided
70 The legal question to be decided is whether the work being done or position held by Mr Gamboni, or a major portion of it, was no longer required for one of the prescribed reasons.
71 It is also necessary to consider the last sentence of the Redundancy Policy which states:
“ It is important to understand that a position becomes redundant, not an employee. An employee will not be offered a redundancy package unless their position has become redundant and another suitable alternative position is not available.”
Submissions of the Parties
72 Mr Gamboni’s case was that his position of Senior Manager Property Finance no longer existed because of the restructure. He was not told what position he would return to. His restructure proposal of abolishing his position as Senior Manager Property Finance and abolishing the position of one full time employee was accepted. The reorganization abolished the abolished the Commercial Property Unit and integrated it into the Business Banking Unit .A central part of the restructure was that the job of managing the client base was able to be done by a manager and an assistant, not a senior manger. The redeployment of Mr Myers was a central part of the restructure. Mr Pinner was approached to return to take over the commercial property base so that Mr Gamboni’s position could be abolished. The suggestion that Mr Gamboni could have returned to his old role was raised with the benefit of hindsight. The Sandhurst Trustees’ loans had stopped and the commercial property department was no longer viable. Mr Gamboni and his department could not support their customers with any further loans. He was not a business banker. There had ever only been one Senior Manager in the Business Banking Unit at Region 340. That position in 2010 was occupied by Mr McGregor.
73 Mr Gamboni’s redundancy was an integral part of the restructure. He retained the title of Senior Manager Property Finance until the day he left, he did not go into business banking. If he had returned to a position in business banking, he would have had no capacity to continue to write new loans, to mentor staff and no budgetary obligations. The reporting line would have been different. He received no formal letter of offer of the position to which he was to be appointed.
74 A position was not a suitable alternative position if it involves a drop or perceived drop in status or authority. A transfer to a position which involved an effective or perceived demotion could not be regarded as suitable alternative employment.
75 The Bank’s case was that Mr Gamboni’s work and position were required and were not redundant. If Mr Gamboni had returned to work he would have been doing substantially the same work with the same title as previously but in the Business Banking Unit. Mr Pinner took over that role and when he was subsequently appointed to a different position of Area Sales Lead, Mr Pittock took over that role.
76 No one held the position of Senior Manager Property Finance because Mr Pinner, and later Mr Pittock, were at the career point of Business Banking Managers.
77 In Region 340, into which Property Finance was moved there was only one senior manager, Mr McGregor.[25] However, the Bank argued that Mr Gamboni upon his return would have been a Senior Business Banking Manager. There was no decision made about his reporting line, but that would have been worked out upon his return.
[25]78 Mr Gamboni had sought to manufacture his own redundancy. He had an inflated view of his position when compared with others in the Bank.
79 The Bank relied particularly on the evidence of Mr Rodda and Mr Whiting, that when Mr Gamboni returned, he was going to be a Senior Business Banking Manager, reporting to the head of the region
80 The Bank’s position was put in a letter by Mr Penno to Mr Gamboni’s solicitor on 20 October 2010. It referred to Mr Gamboni’s restructuring proposal of March 2009 and stated:
“The proposal you refer to is not accepted by the bank and your client
was made aware of this at the time you put it forward.
Your client put the ‘restructuring proposal’ forward after he was informed cause of the restructure. The restructure resulted in your client’s reporting line changing from Mr Opie to Phillip Whiting. Your client agreed to this change and, prior to his extended leave, worked under Mr Whiting’s direction. Prior to departing on extended leave your client requested, and received by email dated 24 April 2009, confirmation from Mr Whiting via Mr Opie that his role would be available to him on his return to the bank.
that the manager he reported to, Peter Opie, was leaving the Bank.
Upon your client’s taking of extended leave, his position was filled by Brock Pinner on a contract basis. There was no redistribution of your client’s duties and Mr Pinner currently performs the Business Banking role your client was undertaking before he left, on a contract basis.
Given the above, your client’s position is not redundant.”
81 Mr Gamboni disagreed that this was an accurate statement of what had occurred.
82 The Bank submitted that by failing to attend work on 18 October 2010 and subsequently on 22 October 2010 Mr Gamboni’s repudiated the Employment Agreement. The Bank accepted that repudiation though it remained ready, willing and able to perform its part of the Employment Agreement by employing Mr Gamboni in the position that he was in prior to taking the extended leave.[26]
[26]
Consideration of the Issues
83 It is necessary first to identify, but put to one side six matters which might otherwise obscure the proper deciding of this case.
84 The first is that it is not decisive that Mr Gamboni sought to be made redundant. The parties to workplace negotiations frequently seek to achieve such an outcome.
85 Secondly, it is not determinative that the title of a position changes.
86 Thirdly, it is not determinative that Mr Gamboni was resentful of the Bank, because he had not received a redundancy payment and did not wish to return to work.
87 Fourthly, it is also not determinative that Mr Gamboni went on long service leave.
88 Fifthly, it is not determinative that the Bank was happy with Mr Pinner’s performance of duty and were concerned at the prospect that Mr Gamboni might return with a hostile attitude.
89 Sixthly, the fact that the Bank made an offer to pay Mr Gamboni a termination payment is not decisive. Often settlement payments are made to avoid disputation.
90 It is clear that the restructure that occurred in 2009 is properly described as a reorganisation within paragraph (c) of the definition of redundancy and also a change in business or management practices within paragraph (d). It may also come within paragraph a. as resulting from changes in economic or business conditions.
91 On the evidence, I find that from about the start of July 2009, the Commercial Property Unit was abolished and its activities transferred to the Business Banking stream.
92 I find that Mr Pinner took over the role of managing Mr Gamboni’s clients in his absence. The Bank expected that Mr Gamboni would return to the position, with a new reporting line to reflect the fact the property finance team, or unit was brought within Region 340.
93 I find that Mr Gamboni was able to return to work at the Bank with the pay and conditions of a Senior Manager with the task of looking after his portfolio of commercial borrowers. His job would have been placed in the Business Banking stream, but probably reporting to Mr Rodda. I do not consider that the records to which Mr True referred alter this conclusion. The evidence of Mr Whiting and Mr Rodda is of greater significance.
94 It is probable that he would have one other staff member to mentor. It is probable that funds would have been available to provide loans to his clients. This was Mr Pinner’s experience.
95 I apply these findings to the terms of the Redundancy Policy.
96 Mr Gamboni bears the onus of proof of establishing his claim.
97 The definition of redundancy operates to confer a redundancy benefit under the policy in either of two circumstances, one in relation to work and one in relation to position. The question is whether the work being done by Mr Gamboni, or the position held by him, or a major portion of it, was no longer required. The clause is widely drawn operating both in respect of work and position.
98 It has not been established that the work being done by Mr Gamboni, or a major portion of it, was no longer required.
99 The evidence of the Bank witnesses to which I have referred made it clear that Mr Gamboni could have returned to work in the Business Banking Unit under the title of Senior Manager, looking after his old portfolio with the assistance of Mr Cail. It is clear that some senior managers preferred that not to occur and were happy with Mr Pinner carrying out his duties. However, that does not establish that Mr Gamboni’s work, or a major portion of it, was no longer required.
100 The second question is whether Mr Gamboni has established that his position of Senior Manager, Property Finance, or a major portion of it, was no longer required.
101 The term “position” when used in employment contracts, as has been said, is not a term of art. To understand its meaning requires the paying of particular attention to the functions, duties and responsibilities of the particular position.
102 The position involved was identified in the Position Description as Senior Manager Property Finance. I have set out previously the duties of that position. They were largely associated with the development of the work of the Property Finance Unit, more particularly the interests of the clients. The Position Description stated that the position’s key focus was in essence the development and management of the particular business portfolio.
103 The Unit was abolished because of a restructure and therefore the role of heading that Unit ceased. However the main part of the duties associated with looking after the customers was to continue. The number of employees was reduced to two. Loan funds from Sandhurst Trustees, but the evidence of Mr Pinner suggests that funds became available from other sources.
104 Consideration is required of the duties of the two positions: the position of Senior Manager Property Finance, when it operated in a separate Unit and what is known of the position that would have been available to Mr Gamboni if he returned.
105 I am not persuaded that a major portion of Mr Gamboni’s position no longer existed because of the abolition of the Commercial Property Unit. The Unit, in essence, had been three employees under the leadership of Mr Gamboni looking after and developing the client base of the portfolio. Although the number of employees was reduced by one, the customers remained and the mentoring of the other employee would still have been required.
106 While it is true that the details of the position to which Mr Gamboni had not been all worked out the evidence establishes that he would have returned to a Senior Manager’s position looking after much the same portfolio of clients and with the assistance of, and responsibility of one other employee.
107 No job description existed of the new role of a second Senior Banking Manager in the Business Banking Section. This was in part because Mr Gamboni had gone on leave. Mr Pinner’s evidence gives some detail of the work that was available. It seems clear that the work involved providing services to the existing customers.
108 Mr Gamboni has not established that his work or position, or a major part of it, was no longer required.
109 Little attention was paid in submissions to the last two sentences of the definition of redundancy and the question whether the position of Senior Manger in the Business Banking Unit was a suitable alternative position for Mr Gamboni. I will therefore not address that issue.
Conclusion
110 On the evidence presented, Mr Gamboni has not established that he is entitled to the redundancy payment that he seeks. Mr Gamboni did not argue that if his claim for a redundancy payment was unsuccessful, that he had any other basis for claiming damages because of breach of the notice provisions.
111 In any event, I find that Mr Gamboni’s failure to return to work was a repudiation of his employment contract, which the Bank accepted, thereby terminating the contract on 26 October 2010. In those circumstances, Mr Gamboni cannot recover damages for not receiving the notice required to terminate his contract.
112 The proceeding is dismissed.
- - -
| Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311 cf International Flavours & Fragrances (Australia) Pty Ltd v Hoff [2008] VSC 56. |
| (1995) 60 IR 304 |
| (1995) 60 IR 304 at 308 |
| (supra) at pp 249 -250 |
| T 79 |
| T 91-92 |
| T 317 |
| T 311 |
| T 141 |
| T 160 |
| T 356-358 |
| T 367 |
| T 258 |
| T290 |
| T 372 |
| T 243 |
| T 315, 318 |
| T 318 |
| T 314, 329 |
| T 282 |
| T 254, 266 |
| T 270 |
| The Bank relied on Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 at [44]-[45], Whittaker v Uniys Australia Pty Ltd at [32]-[44] and Visscher v Giudice (2009) 229 CLR 361 at [53]-[56]. |
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