Paul Heath v National Australia Bank Ltd t/as National Australia Bank (NAB)

[2014] FWC 3944

[2014] FWC 3944

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 739 - Application to deal with a dispute

Paul Heath
v
National Australia Bank Ltd t/as National Australia Bank (NAB)
(C2013/5625)

DEPUTY PRESIDENT SAMS SYDNEY, 17 JUNE 2014

Dispute arising under the terms of an enterprise agreement - senior banking executive - bank restructure and reorganisation - redundancy, deployment, retrenchment - jurisdiction - interpretation of enterprise agreement - whether the employee’s former role of CEO JBWere truly redundant - meaning of 'comparable position' - whether the employee’s new role ‘comparable position’ to CEO JBWere - offer of alternative role at Executive General Manager (EGM) level - whether alternative role a ‘comparable position’ - components of the role - leadership functions and accountabilities - Hay point assessment - expert witness - employee claims to be redundant - hasty process of consultation - unwilling to consider 'comparable position' - jurisdiction doubtful - employee’s position not redundant - unreasonable to refuse 'comparable position' of EGM - ‘major part’ of restructured CEO JBWere remained the same - no entitlement to retrenchment pay - no orders made - application dismissed.

[1] Mr Paul Heath (the ‘applicant’) was employed by the National Australia Bank Ltd t/as National Australia Bank (‘NAB’ or the ‘Bank’) as the Chief Executive and Managing Director of JBWere (‘CEO JBWere’), a company with 450 employees that arose from a takeover of the Company by the NAB in July 2009. There is no dispute that the applicant was a very senior executive of the Bank, who has considerable experience, knowledge and expertise in the provision of high level financial services.

[2] In 2013, the Bank underwent a significant management restructure, although the position of CEO JBWere was not abolished. However, aspects of the position’s duties and reporting lines were changed. In April 2013, it was proposed that the applicant could retain his present position or accept the position of Executive General Manager, Wealth Advice (‘EGM Wealth Advice’). The duties, functions and responsibilities of both positions were the subject of considerable debate in the proceedings and I will come back to this later.

[3] Shortly stated, the applicant has maintained that his position as CEO JBWere was, in fact, truly redundant and he has consistently sought to be retrenched and paid redundancy benefits according to the terms of the NAB Enterprise Agreement 2011 (the ‘Agreement’). The Bank contends that the applicant’s existing position was not redundant and, in fact, the alternative offer of EGM Wealth Advice was a promotion. The Bank also contends that the Commission has no jurisdiction to deal with this matter.

[4] For two months after the restructure, the applicant continued to work as CEO JBWere under the same contract until he tendered his written resignation on 24 June 2013. The terms of the letter are significant and I repeat it in full below:

‘Dear John,

I hereby tender my resignation, effective immediately.

I have had time to reflect on the events of the last few months and have decided that, whilst I do understand the need for change, I cannot support aspects of the current agenda for change, the manner with which change is now being executed throughout the organisation nor my ongoing role with the firm.

I have made a number of attempts to engage with the firm about how I could work to support change at JBWere - including reaching an agreement with you that was subsequently retracted - however these attempts have ultimately proved unsuccessful. In this context, I believe the right thing to do is step aside.

Regards,

Paul Heath’

[5] On 19 August 2013, the applicant filed a dispute under the terms of an enterprise agreement, pursuant to s 739 of the Fair Work Act 2009 (the ‘Act’) and specifically, Part B - Definitions and Part E, Clauses 57-61 - Organisational Change.

[6] Curiously, both the 2011 Agreement and the National Australia Bank Group Award 2002 are expressed to cover all of the employees of the Bank, including those at the senior management levels. However, as might be expected, persons at these levels are also covered by individual contracts of employment. The applicant’s contract as CEO JBWere dated 15 January 2013 is annexed to this decision as Appendix A.

[7] The dispute was listed for conciliation on 9 September 2013, with the applicant represented with permission by Mr M Harmer, Solicitor and the Bank represented by Ms Kerrie Murphy, Legal Counsel for the Bank, Mr John O’Brien, Mr John Flavell and Mr Andrew Haggar. The matter did not resolve at conciliation and was listed for arbitration. Notices to produce various documents were exchanged and disputes over production of certain documents were determined by the Commission up to the commencement of the arbitration on 2 December 2013, which continued on eight days until closing submissions on 26 March 2014.

[8] On the final day of hearing, Mr Harmer tendered amended draft findings, determinations and orders, which are expressed as follows:

‘AMENDED DRAFT FINDINGS, DETERMINATIONS AND ORDERS

The Commission hereby makes:

1. Findings that the Respondent failed to comply with clauses 58, 59, 60 and 61 of the 2011 NAB Enterprise Agreement in respect of the Applicant (“Enterprise Agreement”) [sic].

2. Findings that the Respondent failed to comply with clause 3 of the Enterprise Agreement and clause 19 of the National Australia Bank Award 2002 as at 24 March 2006 in respect of the Applicant.

3. A determination that the Applicant should have been retrenched by the Respondent as at 5 July 2013 in accordance with the Enterprise Agreement.

4. An order that the Respondent make a redundancy payment to the Applicant pursuant to the terms of the Enterprise Agreement to 5 July 2013 in the amount of $377,268.

5. An order that the Respondent pay interest on the redundancy payment from 5 July 2013 to the present.’

THE EVIDENCE

[9] The following persons provided statement evidence and/or oral evidence in the proceeding:

For Mr Heath

• Mr Paul Heath;



• Mr Stephen Tucker, the Group Executive MLC and NAB Wealth until 2013;



• Mr Scott Hartley, previously the EGM, Corporate and Institutional Wealth, until he was made redundant in April 2013;



• Mr Duncan West, previously the EGM Retail Wealth Products until he resigned in December 2013;



• Mr Steve Rheinberger, previously the Head of People and Culture, JBWere, until being made redundant in August 2013; and



• Professor John Egan, Chairman, Egan Associates Pty Ltd and Adjunct Professor in the School of Business, University of Sydney.

For the Bank

• Ms Lynda Dean, General Manager, Workplace;



• Ms Angela Mentis, Executive General Manager, NAB Private Wealth;



• Ms Katherine Bowman, Manager, Transition Support;



• Mr Mark Joiner, previously the Executive Director, Finance, now retired;



• Mr John O’Brien, Manager, Industrial Relations;



• Mr John Flavell, EGM Wealth Advice;



• Mr Andrew Hagger, Group Executive, Wealth.

Mr Heath

[10] In his written statement, Mr Heath said that when he was appointed CEO and MD of JBWere in August 2009, he was positioned in the Bank’s structure as Executive General Manager (EGM) reporting to the CEO of NAB Wealth, Mr Steven Tucker (later Mr Hagger). He referred to this role as ‘Role 1’. Relevantly, his letter of appointment, provided for a gross salary of $350,000 pa. and discretionary bonuses and mutual termination on three months notice. C1 4 relating to his duties, stated:

‘Your specific duties have already been explained to you, however you also have general duties as an employee. From time to time, we may require you to undertake other duties within your skills and experience. This means your position and/or reporting line may vary from time to time.’

[11] Mr Heath deposed that 50% of his time was involved in managing JBWere as a ‘stand alone’ business. For the remaining 50%, he was involved in leadership functions as a member of the NAB Wealth Leadership Team (WL Team). He denied that he had spent 100% of his time managing JBWere prior to it being brought into the Bank, as he had served on the management committee of Goldman Sachs JBWere. Additionally, the regime of the Wealth Leadership Team under Mr Hagger was different to that under Mr Tucker in that Mr Hagger demanded a higher focus by each member on their ‘day jobs’. In contrast, Mr Tucker expected them to delegate more of their duties and focus on their Leadership Team activities.

[12] He broadly described these two functions as follows:

[13] CEO JBWere:

‘(a) responsibility and accountability of seven divisions of JBWere, being Operations, Advisors, Legal Human Resources, Finance, Investment and New Zealand. The heads of each division directly reported to me. On a monthly basis, for approximately three hours, I would meet with each direct report to discuss the business;

(b) having high levels of autonomy in JBWere for:

(i) profit and loss, including spending a limit of approximately $500,000 and allocating resources. During my time in Role 1, I managed a revenue of approximately $150 million and costs of approximately $140 million;

(ii) strategy, including allocating teams of people for strategic initiatives;

(iii) managing approximately 450 employees, including responsibility for hiring and firing;

(iv) market risk, including making underwriting decisions;

(v) engaging in a high level of contract with:

(A) ultra high net worth (“UHNW”) individual clients, including meeting on a regular basis with sophisticated clients who were prepared to invest anywhere between $20 million to billions of dollars; and

(B) the media, including regularly meeting with press and having responsibility for media communications on behalf of JBWere. Although JBWere is a small part of the NAB Wealth business, it has a big reputation in financial markets for taking care of significant number of very high profile clients;

(vi) representing JBWere at client functions on a weekly basis and industry functions on a bi-monthly basis;

(vii) being a member of, and reporting to, the board of directors of JBWere (“JBWere Board”). The JBWere Board met six times per year and I attended each meeting. I also met members of the JBWere Board outside of JBWere Board meetings on an ad hoc basis. I was also responsible for preparing the CEO of JBWere reports for each JBWere Board meeting; and

(viii) being a member of committees of JBWere, including the JBWere Executive Committee and Commitments committee.

[14] NAB Wealth Leadership Management Team (WL Team)

‘(a) responsibility and accountability of strategic and operational matters for the NAB Wealth business

(b) responsibility and accountability of profit and loss for the NAB Wealth business. There was no limit on these amounts and I was involved in assisting to make decisions for revenue, costs and setting priorities various tasks, including for a $100 million IT investment budget;

(c) responsibility and accountability for risk and resource allocation for the NAB Wealth business (including allocating resources between all of the different business units, which were asset management, private wealth, JBWere, advice and marketing, platforms, insurance and operation). The resources allocated including spending for technology and head count;

(d) assessing performance for approximately 100 to 150 senior executives, including their ranking for half yearly and end of yearly performance. However, no employees of NAB Wealth directly reported to me;

(e) presenting strategy to the Board of Directors of NAB Wealth (“NAB Wealth Board”)

(f) interacting with members of the NAB Wealth Board, which included dinners where I interacted with non-executive directors who are very valuable as contacts and who provided me with support;

(g) being a member of the Executive Risk Audit & Client Compliance Committee (“Committee”), which went through each of the business units of NAB Wealth (which were, asset management, private wealth, JBWere, advice and marketing, platforms, insurance and operations). As a member of this Committee, we discussed and governed the reputational, operational and compliance risks of NAB Wealth. The Committee met for half a day once every three months. There were at least 30 people in attendance at these committee meetings and included people from audit, legal and risk of NAB Wealth;

(h) assisting in staff briefings or forums which were run by Mr Tucker and other members of the WL Team. One such staff briefing was Imagine, which involved four briefings per year for a few hours to all staff of NAB Wealth. My role at Imagine staff briefings or forums included talking to staff about specific topic, interviewing Cameron Clyne (CEO of NAB) and interviewing an external guest and drawings parallels back to NAB’s cultural change program. My involvement in Imagine required me to attend the staff briefings in Sydney, Melbourne and Brisbane

[15] Mr Heath described his role in a number of change programs implemented by the WL Team in 2011 and 2012. These included programs such:

(a) High Performance Organisation (HPO)
(b) K-WoW (a culture of continuous improvement and modelled on the Japanese concept of Kaizen).

[16] In addition, Mr Heath participated in, or led various top level executive workshops and forums. This involved exposure to a wider NAB Wealth Group and required a significant amount of his time. It enhanced his status as a leader within the broader business. While he did not have ultimate responsibility for Strategic and Operational Matters or Profit and Loss of NAB Wealth, he was involved in a team that had carriage of these matters.

[17] Mr Heath said that in late 2012, he and Ms Angela Mentis (EGM, NAB Wealth) worked on a proposal to combine JBWere and NAB Private Wealth known as ‘NewCo.’ He was instructed by Mr Tucker in early March 2013 to cease working on ‘NewCo’. On 15 January 2013, Mr Heath was offered and accepted employment with NAB by continuing as the CEO JBWere, but now employed by NAB in a Role 1 position.

[18] On 12 March 2013, NAB announced that:

(a) Mr Tucker would be retiring and replaced by Mr Hagger;
(b) structural changes were to occur, such as centralising product and operation functions;
(c) NAB Private Wealth would become part of Business Bank; and
(d) JBWere would remain in NAB Wealth.

[19] Mr Heath said that in a conversation with Mr Hagger two days later, he expressed satisfaction with his present role after Mr Hagger asked him if there were other roles he may be interested in.

[20] On 27 March 2013, Mr Heath received a briefing pack in relation to the re-structure which highlighted the following:

• In order to ensure a fair process, the Group Executive Team was to participate in a People Day on 10 April to determine all appointments

...

• Following the People Day, the Group Executive team was to directly appoint individuals to new roles in the new structure.

• For those individual not appointed to roles, the Organisational Change provisions of the NAB Enterprise Agreement 2011 were to apply as existing roles will cease to exist.

• The new structures were to take effect from April 19, 2013.

[21] The same day, Mr Heath participated in a teleconference of all EGMs. He believed that NAB was engaging in a ‘spill and fill’ process. From March 2013, the WL Team met about twice a week to discuss the structural changes and the proposed restructure. A four tier structure was proposed with the EGM layer being at Tier 3 and the GM layer at Tier 4. There were fewer Layer 3 leadership roles in the new structure. The core focus at this Level was on enterprise strategy and leadership, not individual business management and all roles in the structure were new.

[22] The existing structure of NAB Wealth is set out in Figure 1:

Figure 1.

[23] The proposed structure for NAB Wealth is set out in Figure 2:

Figure 2.

[24] A timeline of actions assocated with the restructure was as follows:

6. Timeline
Date	Action
27 March, 2013	Group Executive - Senior Leaders call (teleconference)
27 March	FSU briefed on proposed organisational change
28 March - 2 April	Group Executive members to speak to their direct reports
27 March - 8 April	Feedback and input to new structure directed to the Group Executive
9 April	Final Structure confirmed
10 April	Group Executive People Day
11 April - 12 April	Outcome conversations with impacted individuals (1:1)
15 April	Broader internal communication of appointment decisions
19 April	New structure commences

[25] Mr Heath said that he understood from what he was told in the briefing that there would be little in the way of consultation in relation to the restructure and he was simply going to be told what his new job was on 11 or 12 April. If he was not offered a job, then his current job would cease to exist.

[26] Mr Heath conceded that he had had a conversation with Mr Hagger on the proposed restructure in which it was indicated that the CEO JBWere would no longer be an EGM role, but would instead report to the Head of Advice. He had told Mr Hagger that the structure made sense, given the size of the JBWere business in the NAB context. However, he denied that Mr Hagger had told him that the CEO JBWere would no longer be a member of the Wealth Leadership Team after the restructure. He admitted that he may have said that the CEO JBWere role ‘did not deserve a seat at the NAB Wealth Table’.

[27] Mr Heath stressed that this comment was not intended to convey his acceptance of the CEO JBWere in the new structure. He did not know, at that time, where he was going to end up. He understood that the restructure involved change, but was trying to make clear to Mr Hagger that he did not particularly want to change his role. He believed he would either be:

(i) offered an acceptable role; or
(ii) if he was appointed to the significantly reduced CEO JBWere role, compared to a Role 1, he would therefore be made redundant.

[28] Mr Heath accepted that a comment that Mr Hagger had made in relation to there being too many ‘Head of’ roles in the Bank was made in an informal and lighthearted context, but it had still given him an impression in relation to the nature of his role in the context of other roles on the Wealth Leadership Team. He denied that his own use of the word ‘emotional contract’ implied that he was tired or worn-out. Mr Heath stressed that he had not set out that he wanted a new role in a follow-up email the next day. He may have demonstrated some interest in the EGM Wealth Advice role, but this was just due to his eagerness to assist Mr Hagger.

[29] Mr Heath stressed that he had notified Mr Hagger, Mr Joiner and others on the JBWere Board that there were problems with Project Blaze (a project Mr Heath had responsibility for) in an email on 21 March 2013. Mr Hagger had not raised problems with his involvement with Project Blaze during the meeting on 27 March 2013.

[30] Mr Heath said that late in March 2013 he had lunch with Mr Gary Mulcahey, Head of Asset Management where they discussed the EGM Wealth Advice role (‘Role 2’) in comparison to Role 1. Mr Heath outlined what he described as the ‘significant differences’ in the duties and responsibilities between his Role 1 and Role 2 duties as follows:

(a) the average client in JBWere had about $3 million of investable assets, was highly financially literate, market savvy and would engage sophisticated investment techniques. Whereas, in Wealth Advice, the average client would have about $350,000 of investable assets, would generally be unsophisticated from an investment perspective and they will largely use a model portfolio approach and a managed fund approach to investing money. As such there is a significant difference in the nature of the clients services by JBWere and the rest of the Wealth Advice businesses;

(b) Role 2 was a less complex role than Role 1, which Mr Heath did not find challenging or rewarding, because it did not have an end to end business and it did not have the same profile that allowed him to work with the investment community and the media;

(c) whilst JBWere was a small business in the context of the broader NAB Wealth business, Role 1 carried the complexity of a stand alone business with its own JBWere Board and external shareholders, whereas, Role 2 was a subject of a larger organisation. In Mr Heath’s view, Role 2 was a narrower role in its focus of expertise, complexity and diversity, and;

(d) Role 1 involved regular meetings with clients, both inside and outside the office. Whereas, Role 2 would have involved industry functions and so was a completely different relationship in which Mr Heath would not have attended individual meetings. He would not make assessments on demand for underwrite, for markets and for investment itself (sic) for individual clients, all of which had significant consequences. This type of work would not have existed in Role 2.

[31] On 11 April 2013, Mr Heath was offered Role 2 (EGM Wealth Advice) by Mr Hagger. When he declined the offer he said:

Mr Heath:	What happens if I say no?
Mr Hagger:	I don’t know because we hadn’t thought anybody would say that.
Mr Heath:	Well I am going to say no for a bunch of different reasons. Some of them relate to the process, some of them relate to not wanting to work with some of the people on that team and some of them are personal but at the end of the day I am just saying no. I now expect to be made redundant.

Mr Heath denied using the phrase, ‘I will make this easy for you’ before rejecting the offer. He felt pressured by the timeline of offer and acceptance.

[32] Mr Hagger had not contemplated Mr Heath rejecting the offer and advised him to speak to Lynda Dean, Head of Human Resources. Mr Heath elaborated on the reasons he declined the role as follows:

‘The reasons why I chose not to accept Role 2 included the following:

(a) I relied on the statements in the Brief to form the view that I would have been made redundant if I was not appointed into a role;

(b) I considered that the “spill and fill” restructure process that NAB adopted to not be the appropriate way to treat managerial staff. The idea that the top executives are “spilled and filled” according to a structure, with no discussion or consultation with each executive was frustrating. Any discussion about a significant role change was, at best, superficial and caveated with the knowledge that you may not even get offered the particular role that was being discussed. The timeline between offer and acceptance was also insufficient for such an important decision;

(c) as set out above, the NAB Group EXCO team were to appoint the EGMs and GMs. I did not want to take an EGM role where I was accountable for delivering outcomes but I did not get to choose the team (GMs) that was going to work with me. In this regard, this position was far different from Role 1 as I had complete autonomy on hiring and firing people in JBWere. Putting together the team that is going to run the business is, in my view, very much a critical decision a senior person needs to make - who is on the team, who am I going to trust to have around me to execute this job etc. And I did not feel comfortable about not having autonomy for those decisions;

(d) in preparation for the People Day, I was required to complete a template form on the internet of my CV in order for the NAB Group EXCO team to make a judgement about any role I was going to be offered. Given the efforts I had made for the firm over the years, this did not set well with me at all. As a senior executive with extensive experience, I found it alarming that I was required to fill out a form to determine the next step in my career; and

(e) there were key differences in Roles 1 and 2, as explained above.’

[33] In addition, Mr Heath noticed that the EGM Wealth Advice contract offer had a 3 month probationary period and that he was to be subject to probity checks. If this had been issued in error, he would have expected this to have been corrected. His existing contract had 5 weeks annual leave, but this was not reflected in the new contract. He believed that given the short time he had to accept the new role (by 15 April), the process was one of ‘standardisation and expediency’, rather than genuine career development. He denied that it had been put to him that he could make recommendations as to the team that he would be managing. He had spoken to Mr Joiner that day and expressed his dissatisfaction as to the process.

[34] In a conversation on 12 April 2013, Mr Heath told Ms Dean that because of the substantial changes in his CEO JBWere role, his expectation was that he would be made redundant, as were other EGMs. Ms Dean replied that his role had not changed, except for the reporting lines. This was permitted under his contract. She told him he was not redundant and if he resigned, he would lose an entitlement to defined STI and LTI payments.

[35] Mr Heath took annual leave from 15-25 April 2013. On 15 April, the NAB announced the appointments to various roles in the restructure and the persons appointed. These were publically announced on 19 April 2013.

[36] Upon returning from annual leave, Mr Heath no longer performed Role 1. Though continuing as CEO JBWere it was now a GM role with diminished duties and responsibilities over:

(i) profit and loss;

(ii) strategy. By way of example, he had previously participated in the development of strategy for NAB Wealth and JBWere. However, now he was given targets which were determined at the NAB Wealth level and he was directed to implement them as opposed to develop the strategy to come up with the targets;

(iii) project governance. By way of example, Project Blaze (discussed further below). Previously, he was the sponsor or this project and had the ultimate authority for it. However, he was no longer the project sponsor; and

(iv) previously, he would prepare the JBWere board papers and send them to the JBWere Board directly. However, now, the papers required the approval of an EGM before they were sent to the board.

[37] As he was no longer a member of the WL Team he believed his KPI objectives in Role 1 would be significantly affected as each of his previous FY scorecard was connected to the NAB Wealth business. He believed that the perception of his role in the eyes of his colleagues, clients and the market would change. A number of his colleagues made comments to this effect.

[38] Mr Heath met Mr Flavell on 2 May 2013 and reiterated his dissatisfaction with not being made redundant. He said that he would stay to work out a ‘way that works for us both.’ Mr Flavell asked him to stay and complete Project Blaze and ensure an orderly handover to the new CEO team. Mr Heath agreed, but wanted his deferred bonuses to be paid up. He denied that Mr Flavell had put that LTI and STI was to be determined on the basis of conditions and performance hurdles being achieved. When Mr Flavell had suggested he remain until December 2013, he replied that he hoped it would be sooner. Mr Heath said he left this meeting with ‘an alignment of intent’ with Mr Flavell, though nothing was ever put in writing. He had never spoken to Mr Hagger about this arrangement as he thought that Mr Flavell would have told him. Nor did he want to go over Mr Flavell’s head.

[39] As a result of a number of events in May 2013 and Mr Heath’s concern that the arrangement discussed with Mr Flavell was undocumented, he met him again on 5 June 2013. Mr Heath proposed an ‘exit’ strategy, but Mr Flavell replied that there was anger within management about the delays and costs of Project Blaze. As a result, he told Mr Heath he was not getting any bonus for 2013. Mr Heath described Project Blaze as arising from a requirement to ‘migrate’ JBWere off Goldman Sachs’ product and technology systems to NAB, costing many millions of dollars and taking 18 months. In March 2013, as a result of increased costs and time delays, an independent review of the Project was undertaken. Mr Heath believed he was ‘sidelined’ in the process and that he was also disempowered from decision making in a critical part of JBWere’s business in relation to advisor remuneration. The review had extended the timelines and budgets and found no fault on Mr Heath’s behalf. The project’s cost became $85 million and was to take until August 2013. The Wealth Leadership Team later decided that Mr Flavell should take carriage of Project Blaze and Mr Heath said that if he had still been on that leadership team, he would have fought to remain the sponsor. He asserted that the Project Blaze role was an inherent component of his role as CEO JBWere. Mr Heath said he was very confused and distressed that there were people suggesting he was responsible for the delays and costs blowout. Nevertheless, Mr Flavell again told him, he was not going to get his 2013 bonus.

[40] Mr Heath had two meetings with Mr Hagger, Mr Flavell and Mr Joiner. Mr Joiner had told him that what he was being asked to do was unreasonable. Mr Heath had said that Mr Flavell had told him that he would not get his STI that year, to which he got no response. When asked by Mr Hagger what he wanted from his career with the Bank, Mr Heath replied:

‘I’m frustrated that I’m being held accountable for Blaze and no one has told me yet what I’ve done wrong. I am more than happy to take responsibility if it was my fault. If I have screwed this up someone tell me, but as far as I am concerned there haven’t been any issues around governance. This whole independent review was done without reference to me. I’m angry about that. The risk settings for the whole project were changed - I had no input into that - and that is what is driving the cost and timelines increases. I’m happy to be held accountable for things I should be held accountable for, but no one has yet told me what I have done wrong here with Project Blaze.’

[41] After further discussion about the profitability of JBWere and the interaction with Project Blaze, Mr Heath explained that he wanted to go, he didn’t want to be part of this. He wanted to be treated fairly and made redundant. Mr Flavell and Mr Hagger had both made sympathetic comments to him, though Mr Flavell had made it clear that he would not receive an STI for that year. He could not recall Mr Hagger saying that he should perform his duties in the CEO JBWere role ‘as usual’.

[42] Mr Heath attended an Advice Leadership meeting on 17 & 18 June. He said he was distressed about proposed head count numbers and his own future. He wrote to Mr Flavell on 21 June 2013, stating that he did not agree to the changes made to his position and wanted clarity as to moving forward. Mr Heath resigned on 24 June 2013 (see para[4]) and said his reasons included:

‘There were a number of issues that led to the timing of my decision to resign. These included, but were not limited to:

(a) I had arranged a series of meetings for Mr Hagger upon his appointment to his new role, one of whom was with Simon Rothery, CEO of Goldman Sachs in Australia. Goldman Sachs own 19.9% of JBWere. Mr Rothery contacted me after this meeting and informed me that Mr Hagger said “it feels that JBWere exists for the sole purpose of enrichment of its advisors”. I found this to be a very derogatory statement about the business for which I was responsible;

(b) I had a meeting with Sarah Brennan, who runs a firm called Comparator, which does financial comparisons of Wealth Management firms. Following a briefing with Mr Flavell, Ms Brennan said to me words to the following effect: “he doesn’t like your business does he?”

(c) During this time, JBWere were negotiating with Macquarie Bank to buy their Private Wealth Management business in New Zealand. This transaction was called Project Purple. It was a very good deal for the JBWere business. When Mr Hagger has been appointed to his new role, I has reaffirmed with him his approval to continue with the negotiations. Mr Hagger, Mr Tucker and Mr Joiner had all approved proceeding with the negotiations. I had teams lined up on this transaction, and the final approval had been sitting with Mr Flavell for three weeks. Macquarie Bank were getting agitated with the delay and I had given my assurances to the head of Macquarie Private Wealth, Eric Schimpf, that we were still very keen to proceed with the transction. On the afternoon of 21 June 2013, Mr Flavell’s Executive Assistant sent me a message to say you don’t have approval to proceed with Project Purple. There was no explanation given and when I sought one from Mr Flavell, I was given the response “we will revisit this later.” This was a clear indication to me that my authority to make strategic decisions, as CEO of JBWere, had changed.

As a result of these issues, I reached the conclusion that I was part of the problem for the new management team at NAB. I made a decision to leave the business - while that decision was not irreversible, the ongoing conduct of NAB failed to retain my services and drove the timing of my decision to resign. Whilst I did not agree with many of the changes being implemented, I was concerned that if I stayed and tried to resist any further change, it would not be judged as me trying to do the right thing by the business and its people, but simply reflect a preconceived negative notion about JBWere. I was hearing from the external market that there was a negative view about JBWere - and that Mr Flavell has already told me there was a view from within NAB Wealth that I am simply making a grab for money.

On 2 May 2013, I had reached a sensible agreement with Mr Flavell around my future, which was subsequently retracted. Authority, autonomy and empowerment has been taken away from me, but accountability had not. I felt very concerned that my work environment was becoming difficult and hostile for me. At this point I felt I had no choice but to resign.’

[43] It was Mr Heath’s evidence that if he had been offered a Role 2 position, and he knew that it was a demotion, that he would not have been consulted about changes in the role and that the provisions of the 2011 Agreement would not be applied to him, he would have accepted it. Mr Heath named four other senior NAB employees who were made redundant and received a redundancy payment, in addition to their STI payments.

[44] In a reply statement to Ms Dean’s evidence, Mr Heath said that, at no time, did any person at the Bank, including in discussion with Ms Dean on 12 April 2013, say that his CEO JBWere role was a GM role. He had never been referred to as a GM and always understood he was at an EGM level. Ms Dean had not even raised this in her first statement. Mr Heath noted that when he had expressed interest in the two Group Executive roles, these were above EGM level. He was not told that he was aiming too high.

[45] Mr Heath said that the first time the GM issue was raised was in Ms Dean’s second statement. This demonstrated a failure to provide complete and correct information at the time and highlighted the speed with which the process required an answer without appropriate consultation.

[46] Mr Heath had instructed his lawyer to contact Hay Group in order to identify an expert to respond to Ms Dean’s Hay Point analysis. Hay declined to assist because the Bank was a client and it would have been a conflict of interest, unless the Bank agreed. Agreement was not sought, because Mr Heath believed Hay would naturally be biased. Efforts to obtain information from other companies which use the Hay methodology proved unsuccessful because these companies declined to provide a statement.

[47] In oral evidence, Mr Heath agreed he was offered the EGM Wealth Advice role by Mr Hagger, but he didn’t necessarily see it as a promotion. Nevertheless, he acknowledged that (a) the offer was genuinely made; (b) he rejected it before looking at the letter of offer; and (c) Mr Hagger had urged him to reconsider. When he declined the role, Mr Hagger told him that the NAB wanted him to continue in the CEO JBWere role with no change in remuneration. He agreed that other than his lesser involvement in the leadership team, there was no other change to the role. He ultimately continued in that role and its different leadership team, although he didn’t agree with it until his resignation. Mr Heath said that while he reported to the Board of JBWere he also reported to senior officers of the Bank - firstly Mr Tucker then Mr Hagger, then Mr Flavell. He had entered into a fresh contract of employment in February 2013 and he understood that because of his seniority, his contract could be and was amended, as in the case of an entitlement to an additional week’s annual leave.

[48] Mr Heath acknowledged that his duties would change from time to time consistent with his skills and experience and that reporting lines could also change (Cl. 1.3). Mr Heath agreed there was a potential for a change to what he might be expected to do when personalities in leadership changed or as projects came and went. Tasks during a project might also change. He also agreed that the balance of work for the leadership team would vary depending on the level of activity involved, but in terms of ‘visibility’ and status that would not change. Mr Heath accepted that his work as part of the leadership team increased in 2011 and 2012 in large part because of the HPO project. He also worked separately on the NewCo project.

[49] Mr Heath said that he was treated like an EGM at all times, despite the Bank’s reliance on the Hay system’s assessment of his role at a GM level. He agreed that both the EGM and GM roles were on Mr Tucker’s leadership team and Mr Tucker could change the way the team operated. He later became a member of Mr Flavell’s leadership team which was substantially less of a role than previously. He accepted Mr Flavell’s team was focused on wealth advice. It had members who had a larger number of staff and higher turnover than his CEO JBWere role. They dealt with the same proportion of high net wealth individuals as he did as CEO of JBWere.

[50] Mr Heath agreed that post April 2013 he was a member of Mr Clyne’s Australian Enterprise Leaders forum. He concluded that there was no change in remuneration, location or communication to the Board. Mr Heath accepted that Mr Flavell did not have to vet anything he wished to put to the Board. Mr Heath was questioned about Project Blaze and its delay and cost overrun problems. It was fundamental to NAB’s acquisition of JBWere, but it was no different to how other issues were handled, except that that there was a requirement for EGM approval because Mr Heath had lost that authority.

[51] Mr Heath claimed that Project Blaze was not his responsibility until late 2012. For the majority of the time, he was not the sponsor or deliverer of the project, but he was certainly aware of it as CEO. Mr Heath said that while he was never told he was removed as the sponsor, he understood that was the effect. He was having discussions with Mr Flavell and Mr Hagger in May and June 2013 about costs associated with developments in the project. He agreed it was entirely appropriate for them to be concerned and to take action, including taking him off sponsorship of the project. This was consistent with his contract and independent of the restructure. He believed that he was removed from responsibility and sponsorship for Project Blaze sometime between April - June 2013.

[52] Mr Heath acknowledged that nowhere in his contract was he referred to as being an EGM. It referred only to his role as CEO JBWere. In this role he had no GMs reporting to him. Mr Heath agreed that from 2009 he was expected to take a leadership role in integrating JBWere with NAB. This process was independent of whose leadership team he was in. Mr Heath agreed that the remuneration he received was broadly within the band of remuneration for GMs. Mr Heath confirmed that when he was offered the EGM role by Mr Hagger, he was not interested in it and had told Mr Hagger he wanted to be made redundant. The Bank had hoped he would be staying. He didn’t need time to consider his responses, irrespective of what Mr Hagger said to him about it. He said:

“That was certainly irrespective of what happened to be in the letter of offer that you received as part of being offered the role?-- At that point in time my mind could have been swayed but it’s fair to say that I’d largerly made up my mind.

If Mr Hagger had have perhaps said, “I’ll add another million dollars to the remuneration,” you might have reconsidered but - - -?--- I think most of us would.

Yes, but something like that to one side, you’ve gone into the meeting expecting that you would, (a), be offered the role and, (b), of the view that you would reject the role?--- So to be clear around that, one, it was not clear to me at that stage that I would be offered the role. I had an explanation but it certainly wasn’t clear and, (b), prima facie I had made my mind not to take it.

You were of the view that if you didn’t take the role then that would entitle you to a redundancy payment?---That’s correct.

[53] Mr Heath then had a discussion with Ms Dean. She made it clear that it was her view he was not entitled to redundancy. He also had a discussion with Mr Joiner. He encouraged him to reconsider his rejection of the EGM Wealth Advice role. Nothing they had said addressed his concerns with the job offer or the process. Mr Heath conceded that from 11 April 2013 to his ultimate rejection of the EGM Wealth Advice role, he had not asked for more information about the role from anyone. He accepted it was a bigger role, as it involved more people, but it was absent job satisfaction and motivation and reduced his proximity to markets and significant clients. He conceded that these features remained in his role as CEO JBWere, but his status had changed. Mr Heath acknowledged that he had not asked if the new role was a promotion. However, he felt it was a ‘sideways’ move.

[54] Mr Heath agreed that Mr Nunn’s role was different to his CEO JBWere role, as he would still retain an influence in JBWere, without being CEO. He accepted that at no stage was he told he had no role in the Bank. NAB’s preferred option for him was the EGM Wealth Advice role. However, if didn’t want it, he could remain in his CEO JBWere role.

[55] He accepted the this discussion with Ms Dean was about redundancy, not the merits of the offer of the EGM Wealth Advice role.

[56] Mr Heath agreed that despite the information in the ‘briefing pack’ that ‘existing roles will cease to exist’ he knew from 12 April 2013 that his CEO role was to continue. The briefing invited feedback and participation in the process, but he did not take up this offer. Mr Heath accepted that no one had told him who would be reporting to him at Level 4, nor had he complained about it. Mr Heath believed that the process was so prescriptive and rushed, it had not encouraged him to put feedback. He was asked to make a decision the day after meeting Mr Hagger and in circumstances in which he was going on leave to New Guinea. Nevertheless, he conceded that he had not asked Mr Hagger for more time, even though Mr Hagger was an approachable manager.

[57] Mr Heath was asked about his participation in the NAB Enterprise Leadership Program in 2011/2012 at which senior managers were asked about expectations of where they might move to later in their careers with the Bank. Mr Heath had identified the Group Executive Risk position and Group Executive Wholesale Banking position, both of which were very senior roles, with significantly more staff than he had at JBWere. Mr Heath did not agree that Mr Hagger’s offer of the EGM Wealth Advice would be a good step in the right direction to eventually achieving either of these roles.

[58] In re-examination, Mr Heath explained the different remuneration structures for the two positions. Under his existing position his base salary was $400,000 with an STI (Short Term Incentive at risk) of 200% which meant he could earn a further $800,000. Under the proposed EGMs role, while the base is higher ($550,000), the STI was reduced to 100% meaning he could be ‘worse off’ in actual monetary compensation by thousands of dollars. Mr Heath noted that it was common in banking practice to have a low base with very high incentives. In addition, the new contract had one week less annual leave and contained provisions for probation and probity checks.

[59] Mr Heath believed he was redundant when he saw the statement that all existing roles were to cease to exist and the role offered to him was significantly changed and was unsuitable for him. Mr Heath claimed that there had been no specific information provided as to options available to him. He had 24 hours to make up his mind. No one had explained the offer to him or what it entailed. He understood his existing role would be reduced to one layer down.

[60] Mr Heath explained how his job satisfaction was achieved in servicing a particular client segment and being close to markets and market information. It involved High Net Worth (HNW) and Ultra High Net Worth (UHNW) clients, who demanded very personalised services. By contrast, the EGM role tended to deal with planners, rather than the clients. It also tended to be less about investment markets and more about investment products.

[61] It was Mr Heath’s evidence that no one had told him that he was really at a GM level and the EGM role was a promotion. Mr Heath described his role in appointing people to his team when he was CEO as almost absolute, whereas in the EGM role, decisions on appointments would be made by the Group Executive.

Mr Stephen Tucker

[62] Mr Tucker was employed by the Bank for 25 years - the last 4 years as Group Executive MLC and NAB Wealth reporting directly to the CEO of the Bank. He also ran a Wealth Leadership Team (WL Team) of which Mr Heath was a member. The WL Team comprised the EGMs responsible for the various business units in the Wealth Division. It was Mr Tucker’s evidence that Mr Heath was referred to as the CEO JBWere at an EGM level. Mr Tucker said each EGM had two responsibilities; their individual business unit and overall wealth management results. The later responsibilities would take up about one-third of the team member’s time. This might involve making sacrifices in their own business unit for the benefit of the enterprise as a whole. In terms of the team, members would discuss investments, allocations and make trade offers between business units in order to deliver overall group results.

[63] Mr Tucker was initially involved in the 2012 Win Tomorrow Strategy which was designed to determine strategy and a structure over the next 3 - 4 years and deliver on the group results. Mr Tucker left the Bank early in the process when his role changed.

[64] The strategy group consisted of 12-14 senior executives which was separate to the EGM Group, but reported to the Executive. Mr Tucker was aware of the impact of the changes on Mr Heath in that he lost his WL Team responsibilities. In addition, his role, duties and reporting lines changed. Mr Tucker believed the loss of 30% of Mr Heath’s Wealth Leadership role was ‘significant’. Mr Tucker also believed Mr Heath’s CEO JBWere role changed as he went down a layer in the restructure.

[65] Mr Tucker was familiar with Mr Heath’s CEO JBWere FY 13 score card as he had a role in putting it together. He believed that Mr Heath’s proper position was EGM JBWere. A significant proportion of the incentives available to Mr Heath involved a focus on the WL Team, as well as the individual business unit results. Mr Tucker believed that Mr Heath’s restructured CEO JBWere role would have impacted on his ability to deliver on these objectives, because of his lack of involvement in the strategic agenda. As a result, the FY 13 scorecard would no longer be appropriate, although he would still have some involvement in the overall division. He described Mr Heath’s new lower level role as having a ‘line of sight issue’. He would have no ability to contribute, influence and be part of the overall group outcomes.

[66] In cross examination, Mr Tucker claimed he understood the role played by Ms Dean and her team in undertaking Hay point assessments, but he had a limited understanding of how the system worked. He agreed Mr Dean would have a definitive role in classifying EGMs and GMs. However, Mr Tucker accepted that the CEO JBWere was a specific role with a stronger title from the client’s point of view. He further agreed, this title was generally the manner in which Mr Heath was referred. Mr Tucker accepted that the layers in the structure really just determined who a person reported to in the hierarchy.

[67] Mr Tucker was asked if he agreed with Mr Hartley that there was a significant change in workload during the times he (Mr Tucker) had managed the Team from 2005 to 2009 and July 2012 to April 2013. Mr Tucker believed the extent of change would depend on the role of each Team member. However, there was an expectation that more time would be spent on a new culture of greater involvement in the Team. However, he acknowledged that different people adopted different approaches to these matters.

[68] Mr Tucker agreed that generally there had been no change to the leadership until Mr Hagger took over from him (March 2013) and the major changes were introduced in April 2013. Nevertheless, Mr Tucker said that throughout the Project, people worked to their strengths, depending on the tasks required, the intensity of the work at a particular time and from individual to individual. However, he believed this averaged out to around one third of their time. One of Mr Heath’s tasks was to bring the strengths of the private bank and JBWere closer together.

[69] Mr Tucker acknowledged that the CEO JBWere reported both to the Board and to him as the direct line manager. He accepted the Board Chairman’s assessment that Mr Heath should report to him (Mr Tucker), rather than to Mr Joiner in the traditional Chairman’s role. Mr Heath also had access to other support in the broader NAB organisation such as human resources and legal advice. Mr Tucker agreed that, in a very real sense, Mr Heath was responsible for the broader NAB organisation.

[70] It was Mr Tucker’s evidence that he had not conducted his own Hay point analysis of whether or not Mr Heath was appropriately classified at an EGM or a GM level. He conceded that it was not discussed more widely as it was accepted that he had a special role as CEO JBWere.

[71] Mr Tucker acknowleded that Mr Heath’s Layer 4 role would still have a team component, albeit that it would be quite different. One of the differences was the reporting line. Mr Tucker was aware that Mr Heath was offered, but rejected the EGM Wealth Advice role, which ultimately reported to Mr Flavell. Mr Tucker conceded Mr Heath would be expected to meet targets in any of the roles at Layer 3 or 4.

[72] In further evidence, Mr Tucker said that the differences in the two CEO JBWere roles held by Mr Heath assumed different roles and responsibilities at the different levels. Ultimately, Mr Heath was at a lower level. Specifically, the lower level change was quite significant in terms of access to and exposure to Boards, Board strategy, target setting and leadership obligations. It wasn’t possible to set precise proportions of time at the leadership ‘visibility’ level. However, Mr Tucker claimed it was a demotion when an EGM was put down to a GM role. Mr Tucker described Mr Heath’s move as a significant demotion. Mr Tucker was unaware of anyone who had speculated about Mr Heath being anything other than an EGM.

[73] In a later statement, Mr Tucker repeated his view that Mr Heath’s CEO JBWere role changed significantly and, in this sense, he disagreed with Ms Dean’s evidence. It was irrelevant whether the role was titled EGM or otherwise, given the change in duties was real and significant. During Mr Heath’s time working for Mr Tucker, he was operating at the same high level as other EGMs and was one of the strongest performers.

[74] In cross examination, Mr Tucker conceded he was not a technical expert on the Hay system and was therefore not in a position to conclude that Ms Dean’s application of Hay was not proper and appropriate. He also accepted that at the time of the restructure he had already left the Bank. He had no involvement in how the redundancy terms of the enterprise agreement applied. He agreed that his views were an opinion or impression of when Mr Heath worked for him and not later when Mr Hagger was running the leadership team. Mr Tucker accepted that there were some people on his team who were EGMs and others who were GMs. All were expected to give their best.

[75] Mr Tucker also accepted that Mr Heath was generally not referred to as either EGM or GM, but rather as the CEO of JBWere. It was Mr Tucker’s evidence that he was a friend of Mr Heath and they had been exploring going into business together since these proceedings had been on foot. However, nothing had eventuated. In re-examination, Mr Tucker explained that certain GMs were in support services, whereas all operational business units were managed at the EGM level who were direct reports to him.

Mr Scott Hartley

[76] Mr Hartley commenced employment with the Bank in January 1999. In April 2013, he ceased employment with the Bank when his then position of EGM, Corporate and Institutional Wealth was made redundant. Mr Hartley was a member of the WL Team in two periods of his employment. When he was GM Strategic Marketing 2005 to March 2009 and then when he was EGM from July 2012 to his redundancy. In the intervening period Mr Hartley, as GM Corporate and Institutional Wealth was a member of the Investment Platform Leadership Team. This involvement required about 15-20% of his time.

[77] In his first period as a member of the WL Team he said it operated as less of a team and more of a management committee of 6 people who ran functions or part of the NAB’s Group Wealth Business. In his EGM roles, he worked across all other functions and was well positioned to see how the Team operated.

[78] Mr Hartley described his second period on the WL Team and listed its members. He said the Team met once a fortnight for around four hours or an entire day. They would discuss how the business was performing, the financials, operational issues and strategies. In addition to attending meetings, Mr Hartley said each Team member was expected to focus on particular work streams for the HPO programme, spend time on enterprise issues and attend enterprise forums and workshops. Mr Hartley said that his involvement in the broader NAB Wealth business, required time to be spent on issues not directly relevant to his Marketing Team duties. Each WL Team member was also expected to rotate as the Chair of meetings.

[79] Mr Hartley believed WL Team members were ‘far more visible’ to senior and other NAB staff. He considered it a ‘huge deal’ to be appointed to the role and it led to a significant increase in status and remuneration.

[80] It was Mr Hartley’s further evidence that when he rejoined the WL Team in July 2012, he noticed a significant shift towards a more shared responsibility for running the enterprise. This required a greater amount of time dedicated to the Team responsibilities; initially 25-30% then 40%. Mr Hartley said he struggled with juggling these responsibilities while still being responsible for his own area of the business. While he received help and coaching from other Team members about expectations of being a Team member, he didn’t believe he had signed up for, or was told about this high level of involvement.

[81] Sometimes, Mr Hartley was late for meetings or did not attend WL Team meetings at all. Other Team members had explained to him that there was an expectation that he attend meetings. On one occasion, he questioned how he would find time to run his own business. He was told he needed to reprioritise his schedule and free up time to function as a member of the Team.

[82] Mr Hartley was told by Mr Hagger in April 2013 that his role was redundant and he had the option of taking a redundancy package or consider roles at the next level down from EGM to GM. He opted for redundancy.

[83] In oral evidence, while Mr Hartley said the change process was conducted quite quickly, he agreed it was ‘probably the right way to do it’.

[84] In cross examination, Mr Hartley said that when Mr Tucker’s leadership of the WL Team straddled both periods, he was part of it. However, there was a ‘vast difference’ between the way it had operated earlier to when he rejoined it in 2012. Mr Hartley could not recall when Mr Hagger took over in February 2013 if he took over the Chairmanship of the meeting or reduced the preparatory work for the meetings.

[85] Mr Hartley explained that there was a number of initiatives involved in the HPO project and different individuals would have carriage of issues from time to time. This was in addition to a base level of activities expected of the Team. When chairing meetings, it required 10 hours of preparation time.

[86] Mr Hartley did not have a view on whether Mr Heath’s formal title was EGM, rather than CEO JBWere. However, from his perspective Mr Heath was an EGM on the Team. However, he accepted that there were others on the Team who were not EGMs. Mr Hartley was questioned about his own redundancy with the Bank. He agreed there had been discussion about the restructure and that feedback was sought from the WL Team. He had had two discussions personally with Mr Hagger.

Mr Duncan West

[87] Mr West resigned from his position with the Bank as EGM Retail Wealth Products in December 2013. He had joined NAB in March 2011 having been previously the CEO of CGU Insurance and Vero Insurance.

[88] Mr West claimed that the EGM level is different in scope and duties to the GM level and in the number of people who report to it. He understood the various levels in the 2011 Agreement in which EGMs are Layer 3 and GMs are Layer 4.

[89] Mr West described his involvement in the Win Tomorrow Project and how it impacted on him. The project was worked up over a few months from November 2012. Senior leaders developed the new strategy structure which effectively deemed all layer 3 roles as new roles. Around 11 April 2013, Mr Hagger offered him the EGM Retail Wealth Product Role and he had 24 hours to consider whether to accept - which he did. Each layer was moved through and appointments made. He said the ultimate decision as to who would report to him was made by the Group Executive. Mr West said he had been given a letter by Mr Hagger and told to provide a response as quickly as possible. He agreed to do so the next day. He sought advice about a number of matters and was told probation and probity checks did not apply to him.

[90] Mr West offered three reasons for his decision to resign from the Bank:

(1) He had found it difficult to implement NAB’s strategies;

(2) He did not feel his leadership was valued or fitted with the organisation; and

(3) Work/Family life balance issues - working extremely long hours with a young family

[91] Specifically in respect to Win Tomorrow, Mr West said he had significant authority withdrawn in areas for which he had been previously responsible. He also believed there was insufficient funding to support the implementation of the Project. Mr West was critical of the speed of the process and lack of opportunity for people to properly consider their wishes in open dialogue with them. He described it as the worst change making process he had experienced in his 30 years career in the finance industry. Nevertheless, Mr West conceded that different people had differing views on the process, depending on how the outcome affected them personally. Some employees were very happy to have no role to go to, while others were very unhappy with no role or new roles.

[92] Mr West described his role in the WL Team and the HPO Project. He spent 40-50% of his time in working with the WL Team on issues applying across the business, rather than on his direct responsibilities for insurance. It involved writing and reading papers, attending Team and subcommittee meetings, communication and organising and assessing leadership development activities. He regarded this as the most important part of his EGM role, although it engaged roughly half his time.

[93] In cross examination, Mr West acknowledged that he retained his title of EGM and continued to have GMs reporting to him in the new role he accepted in the restructure. He agreed Mr Heath’s title was CEO JBWere, but his contribution to the WL Team was ‘full and complete’. Mr West conceded he had not been made redundant and he had timed his resignation to protect his STI bonus. However, he had not received any long term incentives.

[94] Mr West agreed that the work in the WL Team could fluctuate depending on the nature of the current projects, the strength of individuals who were running it and how they wanted to run the Team. He agreed the underlying principle of the layers were to identify who reported to whom. He accepted that some of the members of the WL Team were GMs. Mr West conceded that he had been involved in the recommendations to the Group Executive concerning appointment of persons who would be reporting to him. Overall, the people he wanted, he got.

Mr Steve Rheinberger

[95] Mr Rheinberger had worked for NAB as both a contractor and permanent employee. In November 2009 he was appointed Head of People and Culture, JBWere reporting to the NAB GM People and Culture, who reported in turn to Mr Tucker, CEO NAB Wealth. He held this position until he was made redundant in August 2013.

[96] Mr Rheinberger was involved in negotiations with the Finance Sector Union (the ‘Union’ or FSU) in respect to the various enterprise agreements applying at the Bank. He was part of an Implementation Project Team which dealt specifically with promotion, higher duties, redundancy and redeployment and the classification structure. Mr Rheinberger was not involved in negotiations for the 2011 Agreement, but in his role he had frequent recourse to the application of the Agreement. He said that the approach to redundancy and redeployment was well understood by the parties and continued an approach from the 2006 Agreement.

[97] Mr Rheinberger annexed to his statement a number of documents concerning the Hay point evaluation method which is based on problem solving, know-how and accountability required for a position. Mr Rheinberger described the classification system applying to the Bank’s employees under the enterprise agreement prior to 2009. Employees were graded from A to O, with A being the most senior. Each grading would include equivalent problem solving, knowhow and accountability and would have defined Hay points attached to it. A role was a term to refer to a group of like positions. A role no longer required at a particular grade would be considered redundant and a role at a lower grade would not be a comparable position. He added that a role could still be considered redundant if it meant an unreasonable change to duties, hours of work, start or finish times and location. Mr Rheinberger opined that the ‘rule of thumb’ applied for years, was that if a role changed by about 25% it would be considered ‘unreasonable’.

[98] Mr Rheinberger was intimately involved in the decision made in or around 2009 to replace the alphabetical grades with just 4 levels. He believed the broader structure made it less clear as to higher grade jobs, promotion, redundancy and comparable roles. He said that as a solution it was agreed with the Union to continue a ‘shadow’ Hay point break system, not made known to the employees. It was kept confidential to avoid the employees manufacturing roles, to push up their points and their pay. Comparisons were still able to be made by employees to their role and grading in the old system compared to the new and where a role or position had not been graded, the NAB’s performance and reward team would assess and grade the job against Hay points. Mr Rheinberger said the Promotional Tool referred to in Clause 60.9(c) of the 2011 Agreement was not applicable to senior employees and was not relevant to whether an individual’s position was redundant.

[99] Mr Rheinberger identified and explained the concepts of deployment, redundancy and ‘directly comparable’ role under the 2011 Agreement. In respect to deployment, he said that individuals would be given a reasonable time to locate an acceptable position in the Bank before facing retrenchment. Reasonable time depended on a number of factors and circumstances, but generally a period of six weeks was applied. Mr Rheinberger said that the 2002, 2006 and 2011 Agreements continued the same concepts as to redundancy and ‘comparable positions’.

[100] Mr Rheinberger described his role in the 2013 restructure in which he provided HR support. He said the early discussions involved theory and strategy involving the restructure and not specific roles or specific individuals. When the new structure was announced, implementation was through a phased process involving the following:

‘Mr Clyne was layer 1 and would appoint the NAB Group Executive (his direct reports). The new Group Executive were layer 2 and would appoint the next layer, being the Executive General Managers (“EGMs”), who reported to the Group Executive. The EGMs were Layer 3 and would appoint the General Managers (“GMs”), who reported to the EGMs and were Layer 4.’

[101] Mr Rheinberger understood that all existing reports to the Group Executive level were told their roles were ‘spilled’ and they would receive confirmation of new roles or otherwise after 10 April. He further understood all existing EGM reports were redundant and that appointments would be made to the new Layer 3 roles.

[102] On 11 April 2013, Mr Rheinberger and Mr Howard were involved in assisting Mr Hagger before and after with his one on one meetings with his direct reports, including Mr Heath. After meeting Mr Heath, Mr Hagger told Mr Rheinberger and Mr Howard, that Mr Heath had rejected the EGM Wealth Advice role. Mr Hagger asked what the process was in these circumstances. When Mr Hagger left the room, Mr Rheinberger said he said to Mr Howard:

‘If we appoint Paul back into his JBWere CEO role, it means that he is no longer on the NAB Wealth executive team. Also, the JBWere CEO role is now a GM and Layer 4 role. In my view, that is a potentially a different role than what he was previously performing. Also, we have already told Paul that he is spilled from his role, effectively making it redundant. This means the role does not actually exist at this point in time so it might not be as simple as putting him back in his old role. Layer 4 positions were to be defined in a couple of week’s time by the new EGMs.’

[103] Mr Rheinberger believed Mr Howard agreed with him, that Mr Heath’s situation was unclear. After further discussion, Mr Rheinberger formed the view that Mr Heath’s CEO role no longer existed in its previous form. Mr Howard spoke to Ms Dean about the matter. He told Mr Rheinberger that Ms Dean agreed that there maybe a case that Mr Heath’s former role had been made redundant.

[104] Between 11 April 2013 and mid June 2013, Mr Rheinberger said he had a number of conversations with Mr Flavell in which he told him that Mr Heath felt he was being treated unreasonably and that he agreed with him. While Mr Rheinberger believed that the Bank was heading for a poor outcome, Mr Flavell did not want individual deals. Mr Rheinberger said there was a perception that Mr Heath was driven by a decision to leave the Bank with a payout. Mr Rheinberger believed there should have been a sensible conversation with Mr Heath to negotiate an outcome to meet the needs of the individual and the Bank. This did not happen.

[105] In April 2013, Ms Susan Carran replaced Mr Howard. Mr Rheinberger said he had a number of conversations with her about Mr Heath. She had said he should accept his GM role or resign. However, it was Mr Rheinberger’s view, although he could not be specific, that there would be a significant difference in the Hay points for the EGM and GM roles such as to render the EGM role redundant. He formed this view because:

‘(a) the accountability, know-how and problem solving would be less in the GM position than the EGM position;

(b) the EGM position reported to the CEO of the NAB Wealth business, it was a member of the executive team of the NAB Wealth business and there was an expectation of that team that they spend a significant portion of the time working on the NAB Wealth business. Whereas, the GM position no longer reported to the CEO of the NAB Wealth business and it did not have a seat on the executive team;

(c) a big part of the EGM position was to work on the broader NAB Wealth business as opposed to just JBWere. Whereas, the GM position did not afford the same opportunity to work in the broader business than the EGM position;

(d) the decision making authority and accountability of the CEO of JBWere from the EGM position to the GM position changed dramatically because JBWere moved structurally down a layer of the organisation following the restructure; and

(e) Mr Heath in the EGM position had a very autonomous role and was accountable for the strategy, direction, P&L and operational decision making within JBWere. Following the restructure, although the strategy, direction, P&L and operations responsibilities of JBWere still managed by the GM position, another layer was in place above the GM position which provided input, oversight to the strategy and direction etc of that business. As such, the autonomy of the GM position was much less in my view in the new structure.’

[106] Mr Rheinberger criticised the statements of the NAB witnesses as to the meaning of ‘redundancy’ and ‘deployment’ in the 2011 Agreement and the historical context of the meaning. Mr Rheinberger also downplayed the importance of titles such as CEO JBWere (although this specific title needed to be retained for market purposes). He said that titles play no role in understanding the role, its duties and responsibilities. Nor does it play any role in deployment or redundancy issues under the Agreement.

[107] In a further response, Mr Rheinberger denied that he had argued that Mr Heath was redundant or that he was ‘pushing the barrier’ for him. He believed there was a commercial risk for the Bank if Mr Heath was treated differently and the case ended up being litigated. He believed the NAB could justify labelling Mr Heath as redundant, even if he was not technically so. There was also a risk to the JBWere brand and from the market, if there was a weak succession plan.

[108] Mr Rheinberger maintained the view that the April 2013 restructure was hurried and there was little opportunity or time for employees to understand, question and discuss the changes. Mr Rheinberger believed that part of the rationale for the short time frames was that employees were to be exited before 30 September to avoid paying Short Term Incentives (STIs) for the full year (October to September). He also noted that sometime in 2012 the ST1 scheme was changed so as to no longer make it payable in the event of redundancy.

[109] Mr Rheinberger felt that the treatment of Mr Heath was inconsistent with that of other of his colleagues who were made redundant (Mr Scott Hartley and Mr Richard Nunn). Mr Rheinberger responded to Ms Bowman’s statement:

(a) by disagreeing it was common for the coding of a role to change several times before a final view was agreed;

(b) his view was that ‘repointing’ the CEO JBWere role amounted to a redundancy. He believed there were sufficient grounds to call Mr Heath’s position redundant;

(c) there was never any reassessment of remuneration for the role;

(d) he had told her that Mr Heath’s role was ‘impacted’; and

(e) he was involved in the final decision regarding the CEO JBWere role.

[110] Mr Rheinberger responded to Ms Dean’s statement as follows:

(a) Whenever there was a restructure, the business leader would talk directly to their HR partner.

(b) He understood that at no time was Mr Heath’s role anything other than an EGM level role. He was listed as an EGM on his 2012 Scorecard and he sat on the WL Team, where his peers were also EGMs. If it was not an EGM role, this should have been raised with him.

(c) He disagreed that there were no changes to the core functions, responsibilities or accountabilities of the CEO JBWere. His post restructure role sat at a lower level in the organisation. He was expected to be a ‘visible’ leader of the NAB Wealth Business as a member of the WL Team.

(d) It was not Mr Rheinberger’s responsibility to determine a Hay evaluation of the CEO JBWere role. However, he understood if the total Hay points were lower for his post restructure then this would mean his pre restructure role was redundant because it was a lower grade.

(e) He disagreed that membership of the WL Team was not an essential or core aspect of the CEO JBWere role.

(f) While he agreed each situation was analysed on a ‘case by case’ basis, certain parameters were understood and applied across the Bank. An ‘unreasonable’ impact on the role would be a change of 25% and there would be a 6 week deployment period.

(g) He understood the ‘shadow’ Hay points system was open to be applied to the senior levels at the Bank.

[111] Mr Rheinberger responded to Mr O’Brien’s statement as follows:

(a) In negotiations with the Union, it was never discussed or agreed that the ‘shadow’ Hay point system would not apply to Level 4 employees.

(b) He had been involved in negotiations for the 2006 enterprise agreement.

(c) He denied it was a ‘myth’ that a 25% change was a guide to redundancy and that there was generally a 6 week redeployment period.

[112] In cross examination, Mr Rheinberger agreed he had prepared a proposed structure for the JBWere business in which he recommended the replacement of the position of Head of People (his position) with a People Partner.

[113] Mr Rheinberger did not believe that the JBWere business was autonomous in the NAB business. He agreed the CEO JBWere was required to transition the business and required a high level of leadership skills. Mr Rheinberger could provide no other example where the Bank told to a senior manager to stay under the same role, title, work for the same remuneration and at the same location and then be permitted to be made redundant. He agreed Mr Heath’s position was unusual because the Bank had said his role had not substantially changed, other than that he would be reporting to a different leadership team. Mr Rheinberger agreed that senior management roles could have their duties dramatically altered, from time to time, simply because of the nature of their role or who they might report to.

[114] Mr Rheinberger accepted that not all EGMs have an EM assistant; but no GM would have an EM assistant. Mr Rheinberger agreed that Mr Heath’s contract did not refer to him as a EGM or a GM. He was aware that Ms Dean believed the CEO JBWere was at all times properly classified as a GM. Mr Rheinberger noted that while Mr Heath did not have his remuneration reduced as a result of the 2013 restructure, the remuneration for the top end of the GM band was 50% less than that which Mr Heath was receiving.

[115] Mr Rheinberger agreed that he had never raised any concerns with the speed of the process with Ms Dean, although he almost certainly would have with Mr Hagger. He could not recall if he had used words such as the process was too quick. When Mr Hagger had asked as to what should happen if someone refused a role, the speed of the process meant there was no plan B.

[116] Mr Rheinberger conceded that not all short term incentives for employees crystallise on the same day. However, he said that this was the effect of what happened as a result of the restructure. Mr Rheinberger accepted that the effect of the STI on Mr Heath was as a consequence of the date he chose to resign, not on any deliberative decision of the Bank. Mr Rheinberger agreed that Mr Hagger would have had a far better understanding of what Mr Hartley and Mr Carter, were doing prior to and after the restructure. He further agreed that there were differences in their roles before and after the restructure. He accepted Mr Nunn remained with the Bank after April 2013, but in a different role. Mr Rheinberger conceded that Mr Hartley’s and Mr Nunn’s circumstances were different to those of Mr Heath and that the Bank believed Mr Heath could do either the EGM Wealth Advice role or remain CEO JBWere.

[117] Mr Rheinberger identified two major changes to Mr Heath’s role as the restructured CEO JBWere being the removal of his WL Team role and a change in reporting lines. However, Mr Rheinberger conceded it was not uncommon for reporting lines and different layers of management to change for senior managers. He agreed that ordinarily, such a change would not constitute a redundancy.

[118] It was Mr Rheinberger’s evidence that he was not necessarily concerned about whether Mr Heath was redundant or not; but of two risks for the Bank. Firstly, that Mr Heath might pursue a legal challenge because of his dissatisfaction with the way he was treated and secondly, a hurried exit of the CEO JBWere might put the commercial interests of JBWere at risk.

[119] Mr Rheinberger agreed that the value of a role is not determined by its title. However, he recognised that the CEO JBWere had a high level status and prestige both within and outside the Bank and that situation did not really change after the restructure. Mr Rheinberger accepted that not everyone who is at Layer 3 is an EGM, nor is it the case that everyone at Layer 4 is a GM. Mr Rheinberger was aware that the Enterprise Leaders Forum, of which Mr Heath remained a part, was a prestigious and select group of the real ‘movers’ and ‘shakers’ in the Bank.

[120] Mr Rheinberger was asked about Mr Heath’s autonomy within the business. Before and after the restructure Mr Heath reported to the JBWere Board and to a line manager (Mr Hagger, Mr Tucker and Mr Flavell respectively). Mr Heath would still have to meet targets and be responsible for specific projects. Mr Rheinberger now accepted that the reporting layers were not as clear cut as he had expressed in his statement.

[121] Mr Rheinberger believed that after the meeting in which Mr Heath rejected the EGM Wealth Advice role, no one was clear as to what would happen next. Ms Dean needed to be consulted. Mr Rheinberger had not made notes of the post interview discussions.

[122] Mr Rheinberger said that there had been occasions where an employee might not have a strict legal right to an entitlement, but the Bank made a commercial decision to resolve differences by making an offer. He believed his role was to protect the commercial interests of the Bank while Ms Dean’s role was more technical - to interpret policy. In this situation, the decision was weighted towards a technical outcome, rather than a sensible commercial outcome. Mr Rheinberger agreed that this was a balancing exercise and that someone might feel aggrieved if they had been treated differently to someone who had been paid a commercial settlement. Mr Rheinberger was asked about his suggestion that Mr Heath had earned about a million dollars a year, while the records show it was $720,000 for 2012 and $640,000 for 2011.

[123] Mr Rheinberger said his participation in the enterprise agreement negotiations was to be involved in a project over two years to change the multi grade structure (A-O) to 4 groups. In respect to the promotion tool to apply to group 4 employees, he accepted there was no reference to it in the Agreement, but it was not carved out of the Agreement either. He acknowledged the Union’s concerns were focussed in Groups 1 and 2 and potentially 3 and that Group 4 was never discussed.

[124] Mr Rheinberger agreed that the Hay point methodology would be a different task when applied to Level 1 and 2 employees, to the more complex roles at Level 3 and 4. However, Mr Rheinberger was not sufficiently familiar with the Hay point system to determine whether or not the system was sensitive enough to pick up the nuances and complicated tasks in Mr Heath’s leadership role.

(2) Prof Egan conceded that his assessment was based on the evidence and views of Mr Tucker and Mr Heath. He accepted he had not taken Mr Hagger’s views into account, notwithstanding it was Mr Hagger who had assumed Mr Tucker’s role at the relevant time. Given Mr Hagger replaced Mr Tucker and had a different focus on accountabilities, this represented a serious flaw in Prof Egan’s conclusions. Prof Egan also agreed that he lacked sufficient information to undertake a thorough analysis.

(3) In my view, there was misplaced emphasis on the roles of Layers 3 and 4 in the organisational structure, in the context of the unique position of CEO JBWere. It is obvious that salary levels were not a relevant distinction between Layers 3 and 4. I agree with the proposition that while the roles at Layer 3 ceased to exist, the role of CEO JBWere did not disappear. I note that Mr Tucker agreed that the four layers in the structure really only determined who a person reported to in the hierarchy. I agree.

(4) Mr Heath believed that he had been demoted from an EGM to a GM in the restructure. I consider this argument was a distraction which confused the reality of Mr Heath’s unique position within the Bank. The Bank’s evidence was that no one identified Mr Heath as an EGM, because he held a particular and unique title of CEO JBWere. Moreover, it is difficult to reconcile Mr Heath’s criticism in this regard when the Wealth Leadership Team duties Mr Heath said he had lost, included both GMs and EGMs.

(5) After the April 2013 restructure, Mr Heath continued to be part of the Australian Enterprise Leader’s Forum. This forum included persons at both EGM and GM levels.

(6) There was some reliance on Mr Heath’s 2013 scorecard to demonstrate his role was at an EGM level. This did not reflect the reality, as Ms Dean’s Hay assessment demonstrated. The work value of the position was the same both before and after the restructure. I accept the explanation that it was a mistake to record Mr Heath as an EGM on his scorecard.

Whether Mr Heath’s refusal to be deployed to the EGM Wealth Advice role and his subsequent rejection of the CEO JBWere role, were ‘unreasonable’.

[443] It seems clear enough from the disjunction of the two circumstances - Deployment to a Comparable Position (60.9) and Deployment to an Acceptable Position (60.10) - that the ‘comparable position’ is offered at the discretion of the Bank and a refusal to accept such deployment will disentitle the employee to retrenchment payments. This disentitlement is expressly stated at Clause 60.9(b). Thus, one of the main issues in this case, assuming Mr Heath’s position was redundant, is whether the offer of the EGM Wealth role was a ‘comparable position’ and Mr Heath’s rejection of the offer meant that he would not be paid any retrenchment payments. The initial reactions of those who made the offer, Mr Hagger in particular, was to ask the question, ‘What do we do now?’ Seemingly, this situation had not arisen before and the Bank’s senior officers were scrambling to find out what to do in response to Mr Heath’s rejection of the EGM Wealth Advice role.

[444] The definition of ‘comparable position’ is found in Clause 5 and for present purposes sub clause (c) is the key issue. It was common ground that the other criteria were satisfied.

‘Comparable Position means a position which:

(a) is above or at the same TEC as the position the employee held which was made redundant;

(b) fills the same number of hours per four week cycle;

(c) does not entail a change in duties significant enough to be unreasonable in the circumstances of the employee’s skills, ability, previous work experience and training required to fulfil the role;

(d) does not involve an unreasonable change in daily start and finishing times (to be determined by such factors including the employee’s duties and responsibilities, family responsibilities and historical use of private and public transport;

A version of the promotion tool will be used by the Transition Support Team (TST) to confirm Comparable Position in relation to the duties of the position.

NAB will continue to apply the test that was previously used to identify a “Directly Comparable Position” in order to determine a “Comparable Position” under this Agreement.

...

As will be readily apparent, the above definition imports the notion of ‘unreasonableness’ and it is here where the meaning of that term must be examined firstly, in its general industrial context, and secondly, in respect to the factual circumstances of this case.

[445] Both parties relied on Hawkins to answer the propositions as to whether the EGM Wealth Advice role was a ‘comparable position’ and whether it was reasonable or unreasonable for Mr Heath to have rejected it.

[446] In Hawkins, Moore J considered a similar provision, in another banking agreement, but notably the term referred to was a ‘directly comparable position’ and not the wider expression in the 2011 Agreement which deliberately deleted the word ‘directly’. Nevertheless, the comments in Hawkins are opposite. At pp 348-350, His Honour said:

‘Of critical importance in determining whether the new position was a directly comparable one, is the meaning of the word ‘‘unreasonable’’. Any judgment as to whether the change of duties are significant enough as to be unreasonable would, in my opinion, need to be objective and would involve questions of degree. The language of the definition does not suggest that the unreasonableness of the change in duties turns on the opinion of the employee or the Bank. The word ‘‘unreasonable’’ is found in an adjectival phrase, ‘‘significant enough as to be unreasonable’’, qualifying the nominal phrase ‘‘change of duties’’. The adjectival phrase identifies the extent or magnitude of the change of duties which, if exceeded, renders the new position not directly comparable. Whatever is comprehended by ‘‘unreasonable’’, it requires, as a measure of reasonableness, reference to the existing skills, or future skills after training, and abilities of the officer concerned. It is plain that if the new position requires the performance of a range of new duties and the employee does not possess the skills to discharge those duties, or is unlikely to acquire them after training, then the change of duties is significant enough as to be unreasonable. That is because it is unreasonable to call upon an employee to do work they are unlikely to be able to do with any measure of success. I should add that I do not see any material difference between ‘‘skills’’ and ‘‘abilities’’. Those words appear to be repetitive unless ‘‘skills’’ is intended to describe capacity to do a task that depends on some form of training and ‘‘abilities’’ is intended to describe a more ethereal aspect of a person’s capacity to do particular work. However nothing, in my view, turns on any difference in meaning between those words.

In the present case the relevant question is how the definition is intended to operate if the change in duties is such that the employee plainly has the skills and ability to perform them as Hawkins conceded in relation to the new position, but the skills required reflect only some of the employee’s skills. Two points can be made. First, it is likely that it was contemplated by the parties to the Agreement that the directly comparable position would be at a similar level of responsibility within the Bank and of broadly similar significance to the Bank in terms of the Bank’s operations. This may be inferred from the express requirement that the position be at the same classification. The second is that the three elements in the definition, which are classification, change of duties and location, are, in my opinion, designed to establish minimum standards for the benefit of the employee. This may be inferred not only from the subject matter of the elements but the effect of cl (e)(iii) which has been discussed earlier. The employee is deprived of certain benefits under the Agreement if he or she is offered and rejects a directly comparable position. The definition is framed so as to ensure that the loss of those benefits occurs only if the employee is offered a position that he or she might be reasonably expected to accept because it satisfies those standards.

Given that the definition serves this purpose, it is probable that the parties intended the word ‘‘unreasonable’’ to comprehend not only situations where the changed duties or a significant number of them could not be performed by the employee either immediately or after training, but also any other unreasonable effect on the employee arising directly from and relating directly to the employee’s skills and abilities. It would thus operate in situations where the performance of the changed duties would require the use of only a limited range of the employee’s skills with the potential that the skills would be lost by the employee over time. That is, the range of his or her skills would diminish over time in the offered position because he or she was no longer called upon to exercise them. The loss of those skills may indirectly bear upon the employee’s prospects of promotion in the Bank. There may be other consequences flowing from the offered position requiring the use of a limited range of the employee’s skills which are comprehended by the expression ‘‘significant enough to be unreasonable’’ but they are not readily apparent.

However given that the offered position needs to be at the same classification to satisfy the definition, I do not consider it is likely that the parties intended unreasonableness to be measured by reference to loss of status arising from the use of only some of the employee’s skills. The case advanced by the applicants was that the position offered to Hawkins was, in essence, that of a salesman. The gravamen of the applicants’ case on this issue was that the broad managerial role Hawkins performed, and thus the skills he used, would no longer form part of his duties. There was no suggestion that those skills would be lost to him while performing the duties of a relationship executive. Rather the limited skills he would use as a salesman had a bearing on his own perception of the status of the position, the possible perception of its status by others within the Bank and how that might affect his prospects of promotion to the position he aspired to occupy within the Bank. It could also have a bearing on the perception of those with whom he might deal outside the Bank. Each of these matters really concerns the status of the offered position and they are not, in my opinion, matters to which the relevant part of the definition was directed. Accordingly, the position of relationship executive graded at the SE level was a directly comparable position.’

[447] Madgwick J in Westen v Union des Assurances des Paris (1996) 88 IR 259 said at p 261:

‘The applicant perceived, and in my view correctly perceived, that there was a considerable change in the nature of the new position he was being offered. He was, in effect, to become a senior, specialist claims clerk, whose considerable experience and expertise might be available to other people, outside his team, dealing with claims, but it would be at the option of those other people to consult him or not. Continuing to call him a Claims Manager did not make him one.

He was thus offered new and different employment from what he had contracted for. He declined it, as was his contractual right. The respondent by its officers made clear that it would not continue to employ him to do his previously-contracted work. He was entitled to, and did, treat the contract of employment as breached in a fundamental way by the respondent and to regard it as terminated at the instance of the employer.

I agree, subject to a gloss, with the learned authors of The Law of Employment (3rd ed, Law Book Company, 1990), Macken, McCarry and Sappideen (at p 188):

“In the absence of a contract allowing it, the employer cannot force changes [of job or regrading] on an employee. An attempt to do so will involve the employer in breach of contract if the [employee] presses her or his requirements . . .”

The gloss is that this must not be taken to propound undesirable inflexibility: there must be some reasonable give and take. In a rapidly changing world, it would be uncommon for the parties to a contract of employment to envisage no change in aspects of the job. But employers’ perceptions as to what are the important aspects of jobs they have promised employees and later wish to change may not coincide with the perceptions of the employees, nor of independent observers, such as courts to which the employees might, in due course repair. Serious, non-consensual intrusions upon the status or responsibilities, as well as upon the remuneration, attaching to a job may well be held to amount to a repudiation of the contract of employment, and their actuality will not be denied merely by the retention of the job’s title. That is the drift and the tenor of cases such as Beck v Darling Downs Institute of Advanced Education (unreported, Supreme Court of Queensland, No 3865 of 1988, Dowsett J, 20 April 1990) and Quinn v Jack Chia (Australia) Ltd (1991) 43 IR

So it is here. Mr Westen’s employment was terminated by the respondent’s having indicated that it would not continue to be bound by the contract it had with him as to his employment.’

[448] Mr Harmer argued that while the title of CEO JBWere remained after the restructure, it was a different and less significant role. In other words, titles did not matter. At this point, I interpose to agree with Madgwick J that describing an employee by a specific title does not necessarily mean their role is what the title is intended to convey about the nature, duties or responsibilities of the role. For example, I have seen a classification named ‘Talent Manager’, when in truth the employees were Bar Attendants. Sometimes employers give inflated titles to employees to promote self satisfaction and worth, far in excess of what role they actually perform in the business. In other circumstances, employees give themselves their own titles and even print business cards, to imply a senior position or role far superior to that which the employee actually performs within the business. For example, a person may describe him or herself as an Executive Vice President of company that is a registered business name only, with no assets, no staff and no premises!

[449] At this point, I would point out an obvious inconsistency in Mr Heath’s case as to his title. It was said that the title of CEO JBWere did not matter too much, but whether he was an EGM or GM was very significant. In reality, he was neither an EGM or GM as I observed elsewhere in this decision.

[450] Richards SDP in Von Bibra Robina Autovillage Pty Ltd [2007] AIRC 397 said at paragraph 26:

‘...the objective test of acceptability appears to be that the alternative work bears a sufficient comparability to the original work and is not unreasonably removed from the employee’s original duties, skills set, qualifications, experience and other terms and conditions of employment. The test is not whether or not the employee is capable of carrying out the new employment as such, it is whether there is sufficient correlation between the relevant indicia of the current work and the alternative employment as proposed.’

[451] In summary, Lawler VP in HWEMining described the term ‘unreasonable’ with his usual clarity of expression, as a decision will not be unreasonable if a reasonable person in the position of making the decision would have made the decision in question.

[452] In adopting this principle, and those identified in the authorities cited above, a number of relevant considerations arise in this case. A ‘comparable position’ will mean that:

• Mr Heath had a similar level of responsibility and accountabilities within the Bank.
• His location did not change ‘unreasonably’ or at all;
• He would have a similar number or higher number of direct reports;
• Any new duties would be consistent with Mr Heath’s skills, experience, knowledge and expertise;
• His remuneration (meaning TEC) would be the same or higher; and
• A ‘major part’ of the role will be unchanged.

[453] A consideration of whether a position is a ‘comparable position’ will generally not include factors such as:

• feelings of a loss of status within the Bank;
• feelings of a loss of importance to the Bank;
• whether the employee dislikes the new role;
• whether the employee feels uncomfortable about the role; and
• whether the employee is unhappy or dissatisfied with the process of consultation leading to redundancy or deployment.

[454] Overall, the test of what is ‘comparable’ is an objective one, not a subjective one based on personal hypothetical views. The test will be further informed by the terms of the 2011 Agreement and Mr Heath’s contract of employment.

[455] It is particularly relevant that Mr Heath’s contract provided that:

• he was required to perform other duties generally consistent with his skills and experience;
• he was required to perform duties which the Bank determined as appropriate to the position or which were delegated to him from time to time; and
• his position and reporting lines could change from time to time.

[456] In my analysis, at all relevant times, Mr Heath had no intention of negotiating a ‘comparable position’ to his former CEO JBWere role which he believed was not the same position and he should be declared redundant. No ‘comparable position’ would have been acceptable to him. He had made up his mind and would not accept a new role. Given the objective evidence, the terms of the 2011 Agreement and Mr Heath’s contract, I consider that Mr Heath’s position was ‘unreasonable’.

[457] Mr Heath’s disinterest in any other position is demonstrated by the following evidence:

(1) Mr Heath was agitating for redundancy before he was formally offered any alternative positions for his consideration.

(2) In the two conversations with Mr Hagger on 11th April, 2013 and another conversation with Ms Dean on 12 April, Mr Heath’s primary focus and concern was that he believed he was redundant.

(3) Mr Heath didn’t even open the letter of offer as to the EGM Wealth Advice role prior to rejecting it. On his own evidence, he said:

‘...no, for a bunch of different reasons. Some of them relate to the process, some of them relate to not wanting to work with some of the people on that team and some of them are personal but at the end of the day I am just saying no.’

In cross examination, Mr Heath had accepted that he could have asked for more time if he had wished:

‘You told Mr Hagger that you were rejecting the role and you expected to be made redundant?---Words to that effect, yes.

That was something you said immediately upon being offered the role?---If not immediately, it was relatively close, yes.

If one looks at what you’ve said in paragraph 44 of your witness statement, it would appear that it happened upon you being offered the role. You simply said, “Well, look, I’m not interested. I want to be made redundant”?---Yes.

It’s certainly not the case, is it, Mr Heath, that you were asking for some time to consider the role?---No.

It’s not the case, Mr Heath, of you asking for more information about how the role you were being offered compared to your current role?---That’s correct.

Is it the case that prior to going into that meeting you had, in effect, already decided that you would reject the role?---Yes.

That was certainly irrespective of what happened to be in the letter of offer that you received as part of being offered the role?---At that point in time my mind could have been swayed, but it’s fair to say that I’d largely made up my mind.’

Plainly, he was not the least bit interested in exploring the terms of the offer or renegotiating its conditions.

(4) Mr Heath now complains about the process, but he made no attempt to seek further information about the EGM role after 11 April or seek an extension of time to consider his options. I note Mr Heath conceded that if he had asked for more time, it would have been granted.

(5) Viewed in isolation, the time between receiving the offer and being required to give an answer in 48 hours might be said to be ‘unreasonable’. However, what was the Bank to do? Mr Heath had twice emphatically rejected the EGM role and would entertain nothing less than redundancy. Given this reality, a submission now advanced that Mr Heath was not afforded a reasonable opportunity to make up his mind falls a little flat. In my opinion, it was immaterial whether Mr Heath had 2 days or 20 days to consider his position. He had no intention of changing his mind; See: Peart v Allianz. To put it colloquially, ‘You can lead a horse to water, but you can’t make it drink’.

(6) Mr Heath now believes that the EGM Wealth Advice role was not a promotion, but a ‘sideways’ move. However, he sought no clarification from Mr Hagger, Ms Dean or Mr Joiner on whether it was a promotion or not.

(7) Mr Heath outlined the reasons why he rejected the EGM Wealth Advice role in his statement. However, he acknowledged that he raised none of these issues with Mr Hagger, Ms Dean, Mr Joiner and Ms Bowman.

(8) It was Mr Hagger who made arrangements for Mr Heath to meet with Ms Dean. When the meeting occurred, his only preoccupation was his view that his position was redundant.

(9) Mr Heath acknowledged that the Bank’s offer of the EGM Wealth Advice role was not a sham or fabrication or some ploy by the Bank. He accepted Mr Hagger was genuine in offering him the position.

[458] Mr Harmer submitted that if the EGM Wealth advice role was a ‘promotion’, then the Bank had breached cl 19 - Promotions. That clause is as follows:

‘19.1 This clause does not apply to employees employed by NWMS.

19.2 This clause applies to Groups 1 and 2 roles only. It does not apply to employees moving from a Group 2 role to a Group 3 role.

19.3 An employee who is promoted will receive at least a 5% increase in his or her TEC, either by receiving the TEC Low of the market rate for the new role or a 5% increase to TEC, whichever is the greater.

19.4 A promotion is identified by NAB systems which recognise a promotion under the previous grade structure that applied at NAB.

19.5 The promotion tool will be accessible via the career lab in SAP. This tool may be used prior to and during an application for a new role.

19.6 The promotion tool will identify only that the move does or does not trigger the promotion entitlement.’

[459] For the following reasons, I find it difficult to accept that the EGM Wealth Advice was not a promotion:

(a) It was a larger role by reference to the number of reports to the position.

(b) The TEC increased from $400,000 to $550,000.

(c) While I accept that Mr Heath’s STIs were affectively reduced by a half, the reality was that these payments were entirely discretionary and not taken into account for TEC purposes. STIs could be zero. The 200% reflected an upper maximum only. In addition:

(i) the higher TEC provided a more certain regular income without the increased uncertainty of the discretionary payments.

(ii) the difference in STIs reflected the different focuses of the two positions. A higher TEC reflected a more senior position within the Bank with greater emphasis on leadership and multiple accountabilities across the organisation.

(iii) Mr Heath exaggerated his projected loss of income when compared to what he actually earned by STI in the previous years (see para [397]).

[460] It is also curious why Mr Heath rejected the EGM role and its greater leadership component when he had earlier expressed interest in advancing his career by nominating positions he aspired to, such as the Group Executive, Wholesale Banking (responsible for $1.96 billion) and the Group Executive, Risk. Both the positions are plainly leadership/management focused, rather than sales related. I am also left to wonder why, when Mr Heath was first offered the EGM Wealth Advice role, he described it as a ‘logical’ role for him, but soon after rejected it unequivocally?

[461] In my judgement, Mr Heath had a healthy, but rather inflated assessment of his own capabilities, skills and worth to the Bank. He took it upon himself to be the best judge as to the worth of any new role he was offered. While there is nothing inherently wrong in having an exaggerated view of one’s self worth, it is not a reasonable basis to pick and choose what job you are prepared to take and insist on redundancy if none are acceptable, despite the roles being ‘comparable’ and available.

[462] For completeness, I do not accept that Mr Heath was treated any differently to his colleagues at Level 3. Of the eight in Level 3, all the others either accepted a Level 3 or 4 position or if there was no available position at either level, they were made redundant. The fact that Mr Heath consciously decided for himself that he was redundant, does not mean he was treated any differently to the others. Indeed, on one view, his stance was unique when compared to the others at Level 3.

[463] Finally, I would wish to dispel any suggestion that, by offering Mr Heath the EGM Wealth Advice role, the Bank was implicitly acknowledging his CEO JBWere position was redundant. Mr O’Grady described the Bank’s position as ‘it was damned if we did, and damned if we didn’t’. I would agree. In my opinion, the Bank did everything which could be reasonably expected of it, knowing that:

(a) Mr Heath was unhappy with the restructure;
(b) Mr Heath had expressed interest in more senior positions and wanted to advance in the Bank’s hierarchy;
(c) it wanted to retain Mr Heath’s skills, expertise and experience; and
(d) it had never made the position of CEO JBWere redundant.

By resigning his position in June 2013, Mr Heath was the architect of his own future, for which the Bank cannot be held accountable.

[464] After consideration of all the evidence in this case, and for the aforementioned reasons, I would make the following findings:

(1) There are serious doubts as to the Commission’s jurisdiction to deal with this dispute; let alone make the orders and findings sought by Mr Heath.
(2) Notwithstanding any jurisdictional issue, Mr Heath’s position as CEO JBWere was not, at any point, redundant.
(3) Even if Mr Heath’s position was redundant, and the provisions of Part E of the 2011 Agreement were applicable, the positions of EGM Wealth Advice and his restructured CEO JBWere position were ‘comparable positions’ within the meaning of the definition in the 2011 Agreement.
(4) While it was open for Mr Heath to refuse the ‘comparable positions’ of EGM Wealth Advice and his restructured CEO JBWere role, pursuant to Clause 60.9 of the 2011 Agreement, he was not entitled to retrenchment payments by doing so.
(5) No orders, findings or determinations should be made in this matter and the dispute is concluded.

DEPUTY PRESIDENT

Appearances:

Mr M Harmer, Solicitor and Ms S Younis, Solicitor for the applicant.

Mr C O’Grady of Counsel with Ms A Leikin, Solicitor for the respondent.

Hearing details:

2013.

Sydney:

2, 3 December

2014.

Sydney:

17, 28, 19, 20 February

18, 26 March

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