The operation of clause 42 on the seconded employees
65 While there were limited areas of dispute about the facts, the central question raised in these proceedings is whether clause 42 of the Award is enlivened in a situation such as the present and if so, with what effect. I am satisfied that in the months leading up to 10 October 1997, the Bank proposed that the duties of the employees employed in the IS Department would still be undertaken by them if they elected not to take up employment with EDSA. The proposal that EDSA would take over the operations of the IS Department using, as its personnel, the individuals who had been employed by the Bank in that department was conditional on a sufficient number of the employees agreeing to take up employment with EDSA. On the other hand, the proposal contemplated that employees not taking up such employment would continue, at least in form and at law, to be employed by the Bank and perform the duties they had formerly performed at least in the short term. However does this lead to there being a "position redundancy" in relation to the employees who did not take up employment with EDSA?
66 The starting point in considering those questions is what is meant by the definition of "redundancy" in cl 42 to the extent that it has already received judicial consideration. It is to be recalled that a clause in substantially the same terms as cl 42 was considered in proceedings in the Industrial Relations Court of Australia.
67 In Hawkins (No 1) I said of the definition of "redundancy" (at 333-4):
"I should add that the definition speaks of a position redundancy. That is a reference, in my opinion, to a situation where the work done by an occupant of an identified position is no longer done by the occupant of that position and the position is abolished. That might be because the work is not done at all or the work is allocated to a range of other identified positions in which some of the reallocated work is done but is done in conjunction with other work."
68 In the present case the position would appear to be that the work, in the sense of duties, continued to be done though, on at least one view, the position was abolished. I also said in Hawkins (No 1) (at 337):
"A literal reading of the definition might, as the applicants submit, indicate that if this was so (the position of head of institutional banking was abolished), the former position did not exist at all and thus Hawkins was involved in a position redundancy. However the definition operates, not on names or titles, but on the aggregation of duties that constitute the position."
69 These observations were endorsed by the Full Court in Hawkins (No 2) at 226. However what these observations leave unanswered is the question of whether the definition is satisfied and there is a "redundancy" if there has been a fundamental and radical change in the organisational context in which the position existed though the duties attaching to the position continue to be performed.
70 Before further considering the terms of cl 42, it is convenient to refer to several judgments and decisions where the notion of redundancy and the payment of severance payments were considered in the context of the outsourcing of a business activity.
71 An appropriate starting point is the decision of the Full Bench of the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case (1984) 8 IR 34 at 74-75 and also (1984) 9 IR 115 at 129. The Full Bench decided, effectively, that redundancy pay should not be payable when there is a transmission of a business. It cannot be doubted, in my opinion, that the decision of the Full Bench in that matter determined the general principles governing the circumstances in which employees employed under Federal awards were to be paid redundancy or severance pay on the grounds of redundancy. It was, at the time, treated as a "test case". While the decision of the Full Bench cannot be viewed as determinative of the meaning and scope of any particular Federal award provision dealing with redundancy and severance pay (particularly if the clause does not follow the form of the standard clause determined by the Full Bench), nonetheless the decision of the Full Bench is likely to have informed any subsequent decision of either the Commission or the parties when adopting a clause dealing with redundancy and severance pay. The approach of the Full Bench that redundancy pay should not be payable when there is a transmission of a business has been affirmed by the Australian Industrial Relations Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v United Milk Tasmania Ltd (2000) 48 AILR 4-315 (Print S7351) and Steppes Pty Ltd t/a The Beaufort Darwin v Australian Liquor, Hospitality and Miscellaneous Workers Union (1998) 86 IR 337. It should be noted, however, that in the Termination, Change and Redundancy Case the Full Bench decided it was appropriate, if not necessary, to include in the standard clause an express provision excluding an entitlement to redundancy pay when there was a transmission of the business. On one view, this was necessary because without the exclusion there might be an entitlement to redundancy pay under the standard clause on the footing that there could be a redundancy situation when work was no longer done for an employer (on transmission of all or part of a business) even though the work was to be done for the transmittee.
72 In the Termination, Change and Redundancy Case the Full Bench referred to a decision of Commissioner Neyland in the Trustee Officers' Award Case (1983) 290 CAR 100 and the decision of the Full Bench on appeal in (1983) 291 CAR 200. In that matter the Commissioner had been asked to make an award providing for retrenchment or redundancy pay for employees of The Trustees Executors and Agency Company Ltd ("the Trustee company") which was in liquidation. The Commissioner viewed employment with that company as employment in a "career industry" and varied the applicable award to create an entitlement to severance pay upon termination on account of redundancy. At least historically, the banking industry has also been treated as a "career industry": see In re Bank Officers (State) Board (1921) 20 AR(NSW) 303. By the time the appeal from the Commissioner's determination was heard by a Full Bench, the circumstances had altered in some respects. The Victorian Parliament had passed legislation facilitating the acquisition of the business of the Trustee company by a second company with the result that employees of the Trustee company were offered employment with the second company. The majority of the Full Bench noted in their decision that the parties had agreed that the benefit of the Commissioner's order would not extend to employees who were transferred to the second company.
73 In the decision of the Full Bench in the Termination, Change and Redundancy Case, it was noted (8 IR at 74-75) that the Commissioner's decision in the Trustee Officers Award Case and the decision of the Full Bench on appeal, did not provide severance pay for employees whose employment was transferred to another trustee company. It was noted in a context in which the first mentioned Full Bench was discussing, apparently with approval, various decisions in which some limitation had been placed on the circumstances in which severance payments would be paid. The apparent approval of the Full Bench was consistent with its approach of saying severance payments were not payable when a business had been transmitted. However it is probable that the Full Bench had in contemplation a situation where the transmitted business would be taken over by the transmittee on the footing that the employees would remain employed in essentially the same business and on the terms on which they had formerly been employed by the transmittor.
74 Also it must be remembered that the decision of the Full Bench was made against a statutory background whereby an award in which a clause dealing with redundancy might be included, would continue to operate, in terms, on the transmittee of a business: see s 61(d) of the Conciliation and Arbitration Act 1904 (Cth). At that time an award was likely to contain a comprehensive set of terms and conditions regulating the employment of the employees to whom it applied and often dealing with matters such as seniority and accrued entitlements. Accordingly, a transmittee of a business might well assume, by operation of law, the pre-existing obligations of the transmittor. In my opinion, the views of the Full Bench about the appropriateness of providing for redundancy or severance pay to employees when a business was transmitted must be considered with these matters in mind.
75 The issue of whether there is a redundancy situation entitling an employee to severance payments when an undertaking outsources some of its activities arose in Re Government Cleaning Service (Privatisation) Award (No 2) (1994) 55 IR 199. In 1994 the Government Cleaning Services of New South Wales ("GCS") was privatised. One issue in proceedings in the Industrial Relations Commission of New South Wales was whether employees in the GCS were made redundant when their employment was terminated even though they could take up employment with the successful tenderers providing the cleaning services formerly provided by GCS. Schmidt J concluded (at 217-219) the employees dismissed as a result of the privatisation had been made redundant and dealt with various applications before the Commission on that footing. Her Honour said:
"One question which fell to be decided was whether the former GCS staff dismissed as a result of the decision to privatise the GCS were thereby made redundant. I have come to the conclusion that they were. That conclusion has ramifications both for the s 246 applications and the award applications, but of itself is not conclusive of any of them.
Whether an employee has been made redundant or not is a different question to whether the decision to dismiss was harsh, unreasonable or unjust or to the question of whether an award providing for redundancy pay should be made.
One feature of redundancy is that termination of employment must result from a decision of the employer and not the employee. Even in the case of 'voluntary' redundancies it is the employer which decides that a number of employees must be dismissed and then accepts volunteers - often reserving the right to reject any such volunteer and if there are insufficient volunteers, selecting those to be made redundant from amongst those employees who have not put themselves forward. Here dismissal was certainly not sought by the employees, it was strenuously resisted.
The employer's reason for dismissal is also relevant to the conclusion that redundancy has arisen. That reason must be unrelated to the work performance of the individual employee. A well known explanation is that stated by Bray CJ in R v The Industrial Commission of South Australia; Ex parte Adelaide Milk Supply Co-operative Ltd (1977) 16 SASR 6 at 8:
'…the concept of redundancy in the context we are discussing seems to be simply this, that a job becomes redundant when the employer no longer desires to have it performed by anyone. A dismissal for redundancy seems to be a dismissal, not on account of any personal act or default of the employee dismissed or any consideration peculiar to him, but because the employer no longer wishes the job the employee has been doing to be done by anyone.'
As Mr Menzies pointed out, Chief Justice Bray's statement was made in the context of dismissal resulting in unemployment, not dismissal as an inevitable consequence of the sale or transmission of a business - or the privatisation of a governmental undertaking - where employment may be available with a new employer.
When a business is sold, or a governmental undertaking privatised, the original employment comes to an end. Employees do not always obtain work with the new employer. The fact that the old employer assists the employees to obtain work with the new employer, does not alter the consequence, that the termination of the original employment arose as a result of the employer's decision, that it no longer wished any of its employees to perform the jobs they were performing and not through any fault on the employee's part. It seems to me that employees in that situation have been made redundant, whether or not they are assisted in obtaining alternate employment.
Support for this conclusion can be found in authority. For example in Re Clerks (State) Award (Redundancy Case) (Clerks' Redundancy case) [1976] AR 417, it was said by the Industrial Commission in Court Session at 431 that:
'It can be fairly said that in industrial circles the term redundancy payment had come to mean compensation for losses of various kinds suffered by employees who have given substantial service to an employer and whose services are terminated because, for one reason or another, the employer no longer needs them.'
In the TCR case the Australian Conciliation and Arbitration Commission in dealing with the question of redundancy pay held at 75:
'We do not wish to prevent an employer making an application to be exempted from the general prescription pursuant to this decision in cases where an employer obtains acceptable alternative employment for an employee but we would point out that, in our decision, severance payments are not made for the purpose of assisting employees to find alternative employment. Where such an application was made it would be important to consider whether previous service with the previous employer was recognised as service with the new employer. However, we would make it clear that we do not envisage severance payments being made in cases of succession, assignment or transmission of a business. We intend to provide for transmission of employment in terms similar to cl 5(5) of the Metal Industry (Long Service Leave) Award (1976) 183 CAR 67.'
Both these decisions illustrate that loss of employment in circumstances involving the sale or transmission of a business and ongoing employment for the employees with the purchaser, can give rise to redundancy of their former employment for the employees affected. Whether in such circumstances an industrial tribunal should exercise its discretion to make an award of redundancy pay is a different question, the answer to which will depend upon the particular circumstances involved. In the TCR case and under the EP Regs it is clear that no such payments are to be made in cases of succession, assignment or transmission of business. What the outcome in terms of redundancy pay should be in circumstances where a Governmental undertaking is privatised must be decided on the facts and circumstances peculiar to the privatisation."
76 An appeal against this judgment was unsuccessful: see Re Government Cleaning Service (Privatisation) Award (No 3) (1995) 59 IR 348.
77 A broadly similar issue of arose in Australian Municipal, Administrative, Clerical and Services Union v Greater Dandenong City Council (2000) 101 IR 143. In that matter a local council outsourced the provision of home and community care services though its employees were able to take up employment with the successful tenderer. Some did. The applicants in the proceedings alleged contravention of s 298K of the Act. An issue arose about whether that and a related section had legal efficacy having regard to the immunity discussed in Re Australian Education Union; Ex parte Victoria (1995) 184 CLR 188 at 232. That involved a consideration of whether there had been dismissals on the grounds of redundancy. On this question Madgwick J said (at 173):
"Further, in this case, the prohibited reason preceded and caused the supposed redundancy; but for the impugned decision there would have been no such redundancies. The Council cannot be protected against engaging in prohibited conduct merely because it declared "redundancy" to be the reason for dismissal. The real reason for dismissal was the Council's decision (made in part for a proscribed reason) to outsource the [home and community care] services, not because of an absence of work. A declaration of redundancy premised upon a prohibited reason will not attract the immunity. In this case, the Council, by its statutory representative for the purpose, dismissed the employees for reasons including a reason proscribed by s 298L. That reason also partly motivated the decision of the Council which necessitated the dismissals. These actions of the Council do not attract the immunity. The plea that "redundancy" was the real reason for the dismissals is disingenuous. The constitutional immunity does not protect euphemism.
In this regard, the use of the term "redundancy" in the respondent's submissions evinces a degree of confusion. In Australia, the term "redundancy", in the context of employment, has had a settled meaning at least since 1984. Burchett J recorded how this came about in Short v Hercus (1993) 40 FCR 511 at 520 - 522. As explained in that case:
'…a job becomes redundant when the employer no longer desires to have it performed by anyone. A dismissal for redundancy seems to be a dismissal, not on account of any personal act or default of the employee dismissed or any consideration peculiar to him, but because the employer no longer wishes the job the employee has been doing to be done by anyone.
This definition:
(a)refers to a job becoming redundant and not to a worker becoming redundant;
(b)recognizes that redundancy situations may not necessarily involve dismissals; and
(c)emphasizes that the job or work has disappeared through no fault on the part of the employee. A key element in that definition is that the employer no longer requires to have the work done by anyone.'
See also Quality Bakers v Goulding (1995) 60 IR 327, per Beazley J, and Hawkins v Commonwealth Bank of Australia (1996) 70 IR 213. It is inconceivable that in AEU the Justices of the High Court were using the term redundancy in any other sense. No employer may dismiss an employee for a legally proscribed reason and escape liability by citing redundancy as the reason."
78 It appears that Madgwick J adopted a somewhat narrow view, in my respectful opinion, of when a redundancy situation might arise as a step in the reasoning process leading to the conclusion that the constitutional immunity would itself have a limited operation. I also consider, with respect, that his Honour overstated the effect of the judgment of the Full Court in Short v Hercus if his Honour was saying that there could never be a redundancy situation (or the word "redundancy" used to describe it) if the work of the employee continued to be done whatever the circumstances may be.
79 An appeal from that judgment was heard by a Full Court: see Greater Dandenong City Council v Australian Municipal, Administrative, Clerical and Services Union [2001] FCA 349. On the question of whether there had been a redundancy situation, Wilcox J said:
"His Honour noted the description of redundancy given by the Australian Conciliation and Arbitration Commission in the Termination, Change and Redundancy Case (1984) 8 IR 34 (cited by Burchett J in Short v Hercus (1993) 40 FCR 511 at 521). The Commission referred to a definition given by Bray CJ in The Queen v Industrial Commission (SA); Ex parte Adelaide Milk Supply Co-operative Ltd [1977] SAIR 1202 at 1205. A key element of that definition, the Commission said, was "that the employer no longer requires to have the work done by anyone". Madgwick J commented that, having regard to the fact that the word "redundancy" has had a well-settled meaning in Australia since at least 1984, it "is inconceivable that in AEU the Justices of the High Court were using the term redundancy in any other sense". The same observation may be made about Victoria v Commonwealth where, it must be assumed, their Honours used the word "redundancy" to refer to a situation where the employer no longer required the work to be done by anyone. That, of course, was not the situation in the present case.
In relation to government employment, it may be necessary to add a gloss to these remarks. In Konrad North J spoke of recent "fundamental restructuring of the work of the public service", with the result that "State governments no longer require many jobs to be done which had previously been done". He may not necessarily have meant the governments no longer required the work to be done by anyone. A State, or an emanation of a State, may make a policy decision to outsource a function, previously undertaken by its own employees, and then to terminate the employment of those employees. Although the State still wants the work to be done, so in one sense there is not a redundancy situation, as a matter of policy it no longer wants it to be done by its own employees. In such a situation, it seems to me, the AEU principle may apply."
80 It can be seen that Wilcox J did not discount the possibility that there could be a redundancy situation, which would enliven the immunity, even if the work continued to be done for the benefit of the State or an emanation of the State by a third party. It is relatively clear that Wilcox J also thought that the approach of Madgwick J to the question of when a redundancy situation arose was an unduly narrow one. The other members of the Full Court did not address the issue of what was comprehended by redundancy in the context of the immunity.
81 These decisions and judgments concern factual circumstances and legal issues which are not on all fours with those in the present proceedings. However what they serve to illustrate is that the notion of an employee becoming redundant can arise when there is, in prospect, the termination of an employee's employment event though the duties of the employee will still be undertaken (either by that employee or another employee) for the ultimate benefit of the original employer but in employment with another employer and for the immediate benefit of that other employer. The present case is not completely analogous. While in this matter the seconded employees remained employees of the Bank (for the reasons earlier discussed), their employment was, in most practical respects, with EDSA and undertaken for the immediate benefit of EDSA, although for the ultimate benefit of the Bank. The analogy is imperfect because there was no termination of the seconded employees employment with the Bank. That came about because the Bank elected to follow the course of encouraging the IS employees to take up employment with EDSA (rather than terminating employment with the Bank) but on the basis that if they did not, they would then be in a position where their future employment options were limited (unless they later took up employment with EDSA) and also on the basis they could be utilised by EDSA as if they were employees of EDSA. It is to be recalled that part of the case of the applicants is that the Bank was obliged, under the Award, to terminate the employment of the employees who became seconded employees because they were in a redundancy situation. If their employment had been terminated by the Bank, then their duties would have been performed either by them as EDSA employees or other individuals as EDSA employees.
82 I return to consider the question left unanswered by the decisions in Hawkins (No 1) and Hawkins (No 2), namely whether there can be a "redundancy", as defined, if there has been a fundamental and radical change in the organisational context in which the position existed, with the result that the position has effectively been abolished though the duties attaching to the position continue to be performed. The answer lies in the apparent purpose and scope of cl 42 to be gleaned from its terms.
83 At one level, the question can be simply answered, as the applicants submitted. The Bank no longer required the work to be done because it was no longer done for the Bank. It was done for EDSA. That is why the Bank's IS Department ceased to exist after 10 October 1997; why those IS employees who resigned from the Bank and moved to EDSA were not replaced; and why, when EDSA underwent a global restructure and no longer required many of the seconded IS employees, they were ultimately retrenched. On this approach, which I accept at this level of abstraction, there was a redundancy situation. In one sense, this conclusion disposes of the issue raised at this point in the proceedings in favour of the applicants. However, it is nonetheless desirable to consider, in a more detailed way, the language actually used in cl 42 though the ultimate result is, in my opinion, the same in the context of this case. Indeed it is appropriate to consider the language actually used because the approach of the Bank in defending the application was effectively to say that, consistent with the observations in Hawkins (No 1) (set out at [67] above), "work" means "duties" and the duties continued to be performed.
84 The operative part of the definition of "redundancy" contains, for present purposes, two elements. The first is found in the phrase immediately following the word "means", namely "a position redundancy". This phrase fairly clearly implies that a redundancy situation arises when something happens to the position occupied by a person on whom clause 42 might operate. The second element identifies what that something is. It is that the work (or a major portion of it) is no longer required to be performed or is to be performed at a new location requiring a change in residence. It is to be recalled that cl 42 (d) speaks of positions being declared redundant and also speaks of certain consequences for an employee of his or her position being declared redundant. While this paragraph focuses on a particular position and the occupant of it, par (e) appears to contemplate a wider operation of cl 42.
85 That latter paragraph speaks of "a redundancy situation affecting a number of officers" and creates a mechanism which enables the Bank to select particular employees who will be retrenched. The paragraph appears to contemplate that in a work area there may be several positions and in relation to only some of them, the work (or a major portion of it) is no longer required to be performed (or probably more remotely, the work is to be performed at another location requiring a change in residence). If the work area is one in which the employees are engaged in the same work at about the same classification level, the Bank is able to select which employees are to be retrenched. Thus the occupant of a particular position might not be retrenched even though the work (or a major portion of it) of the particular position was no longer required to be performed. That would come about because the Bank decided to retrench another employee in the same work area who might have been in a position that was unaffected by change of the type to which clause 42 is directed. However par (e) appears to be an exception or extension to the general position, namely that the employee who is in a redundancy situation is the employee occupying the position in respect of which the work (or a major portion of it) is no longer required to be performed.
86 Does the word "work", as it appears in the definition of "redundancy", comprehend not only the daily duties of the employee but also the organisational context within which the duties are performed? It may be accepted that the duties of an employee gain colour from the context in which they are performed. For example, an employee might be engaged for the majority of his or her time in typing correspondence that has been dictated onto tape. A person performing those tasks for the managing director of a large corporation such as the Bank could not reasonably be described, in my opinion, as performing the same work as a person undertaking the same tasks but typing correspondence for an employee engaged in routine debt collection for the Bank. However, any such assessment could well depend on the particular facts of the case and the legal context in which the comparison arises, including the language and purpose of the instrument calling for the comparison. This can be illustrated by the decision of the Employment Appeal Tribunal of the United Kingdom in Capper Pass Ltd v Lawton (1977) 1 QB 852. The Tribunal accepted that a cook preparing a small number of meals for the directors of a company was engaged in "like work" for the purposes of the Equal Pay Act 1970 (UK) when compared to an assistant chef preparing meals in a canteen for a large number of employees of the same company: see also Shields v E.Coomes (Holdings) Ltd (1978) ICR 1159.
87 The word "work" can signify the specific duties undertaken: see The King v Foster; Ex parte Crown Crystal Glass Co Pty Ltd (1944) 69 CLR 299 at 308 and 314 as well as the context in which they are undertaken: EPM Concrete Pty Ltd v Building and Construction Industry Long Service Leave Payments Corporation (1985) 23 IR 430 at 437. In the former case Williams J said (at 314) "(t)he word [work] in its ordinary and natural grammatical signification refers to what a person is doing…". In the latter case, Lusher J had to consider the definition of "building and construction work" in s 4 of the Building and Construction Industry Long Service Leave Payments Act 1974 (NSW). In issue was whether the work of employees manufacturing pre-cast concrete products was work of the defined type. His Honour concluded it was not because it was not work in the building and construction industry which was an element in the definition. However an additional issue was whether the work satisfied the definition in another respect, namely whether it was "work of the kind" usually performed by a builders' or construction labourer. In relation to the meaning of the expression "work of the kind", his Honour said:
"Looking at 'work of the kind', I accept that is not be limited to an examination of the mere basic mechanics of the particular tasks being compared whereby the work itself is performed. Considerations of the place where and the conditions and requirement under which the work is performed and the standards and end to be achieved are not altogether irrelevant although in the last analysis, it may be a question of degree."
88 What then is the meaning of the word "work" in the definition of "redundancy" in cl 42? Is it intended to refer only to the duties of the employee or is it intended to comprehend, in addition, the organisational context in which those duties are performed which effectively define or give substance to the position? The word "duties" is used elsewhere in cl 42. The fact that the word "work" and not "duties" was used in the definition of "redundancy" suggests that the word "work" has a wider, or at least different, meaning than "duties". The word "duties" first appears in the definition of "directly comparable position". In that context it is fairly clearly a reference to the tasks undertaken by the employee. It also appears in cl 42 (c)(ix) and has the same meaning. The word "work" is also found in the phrase "work area" in cl 42 (c)(ii) and (e) (ii) though its use in this context says little about its meaning in the definition of "redundancy". On one approach to that definition, the context in which the word "work" appears suggests it may be intended to be a reference to duties only. The word "it" in the expression "a major portion of it … is no longer required to be performed" (emphasis added) in that definition is a reference to "work". The entire expression has a clear meaning if "work" is intended to mean only duties. That is, a redundancy arises when a major portion of an employee's duties is no longer required to be performed. However the definition is no less comprehensible if "work" means not only duties but the organisational context in which they are performed and the terms and conditions under which they are performed which effectively define and create the position to which the duties attach. A change, particularly if it was a significant one, in the organisational context in which an employee performed his or her duties where the duties remained the same but the position was abolished, could aptly be described as a situation where a major portion of the work was no longer required to be done.
89 Ultimately, however, the meaning of the word "work" and what is intended by the definition of "redundancy" is to be gleaned from the apparent purpose of the entire clause informed by established notions of what is redundancy. The clause is intended to have effect where changes may occur impacting upon "working arrangements" which precipitate a process of consultation which involves the Bank revealing to the FSU the effect of change on staffing structures. The focus of that process of consultation is not simply potential changes in duties but changes to the organisational structures in which duties are and will be performed. It can be seen from sub-par (2) of the definition of "redundancy" that the clause is intended to comprehend a situation where it is proposed the employee's work is to be performed at a different location requiring a change of residence. This suggests that the entire clause is directed to situations where there is a significant and material change in the context in which the work reflected in the pre-existing position is to be performed as well as circumstances where the work is not done at all. It is tolerably clear, in my opinion, that the word "work" is not intended to be a reference simply to "duties".
90 That is not to say, however, that a substantial change in duties would not constitute a redundancy situation. It would because either all of the duties or most of them were no longer required to be done. Such situations would mean that the work or a substantial part of it was no longer required to be done as well.
91 Plainly, however, it is not intended that the Bank would be faced with terminating the employment of any employee subject to such change, that is a change in the organisational context, and paying severance pay because the clause contains a mechanism enabling the Bank to offer a directly comparable position or otherwise redeploy the employee. For a position to be a directly comparable position it must, having regard to the definition, have certain characteristics. That is, the classification must be the same, the duties must be broadly the same and it must be at the same workplace or a workplace to which the employee can readily travel. Thus if an employee was performing certain duties in a particular position but the position was abolished and, in addition, the opportunity existed to continue to perform the duties in another position within the Bank, there would be likely to be a directly comparable position the Bank could offer the employee.
92 If the employee was to be redeployed to a position which was not a directly comparable position then there is a mechanism for the maintenance of benefits and the opportunity for both the Bank and the employee to determine whether alternative employment is suitable. However this scheme fairly clearly contemplates that the alternative employment (whether a directly comparable position or not) is employment within the organisational structure of the Bank. Express reference to this aspect of the scheme is found in paras (iv) and (x) of subcl (d). It would, in my opinion, be inconsistent with the purpose of the clause viewed as a whole to treat an employee as not being in a redundancy situation when, for virtually all practical purposes, the employee ceased working for the Bank within its organisational structure. This would be so even if the employee continued to perform the duties that had attached to the position which had existed within the Bank's organisational structure prior to changes of the type referred to in sub-par (3) of the definition of "redundancy" and changes of the type about which consultation is intended under subcl (c).
93 While it has by no means been an easy issue to resolve, I am satisfied that each member of the representative group on whose behalf these proceedings are brought was, at 10 October 1997, in a redundancy situation. The Bank proposed that each group member would continue to perform generally the duties they had, to that point, been doing. However the context in which those duties were performed was to be changed profoundly. The pre-existing duties continued, in substance, to be performed, but the position in which they had previously been performed had disappeared. They were performed in an entirely different context. While the Bank continued to play a role in the supervision of their employment at a general level, so did EDSA. The changed context was a fundamental one and it was only in a nominal sense that the position each employee occupied continued to exist. In a real and substantial sense each position had been abolished. Each seconded employee no longer worked in the IS Department of the Bank but rather each performed their duties at the direction and for the benefit of EDSA. While it might be said that the positions they held continued, such an approach gives pre-eminence to form over substance. In my opinion, the positions they occupied before 10 October 1997 were, in substance, abolished as soon as EDSA took over the activities formerly undertaken by the IS Department of the Bank. At that time the Bank no longer required the work they had formerly done to be done in the future. Each of the group members was at that time, in a redundancy situation. It follows from what I have just said that the continuation of the performance of the duties by the seconded employees did not constitute, as the Bank submitted as a subsidiary or alternative submission, redeployment either to a directly comparable position or another alternative position as contemplated by subcl (d). That is because the continued employment of the seconded employees by the Bank was not employment "within" the Bank as contemplated by cl 42.
94 In its final submissions the Bank relied on the many statements it made at the time (both before and after 10 October 1997) that it was not a redundancy situation and no employee would be made redundant. There can be no doubt that this was the constant and oft repeated position of the Bank at the time. However the statements made by the Bank may have been simply a manifestation of its understanding at that time of how clause 42 might operate. However, I cannot discount entirely the possibility that the statements were made in circumstances where the Bank was not entirely sure how cl 42 might operate and in order to minimise the expectations of the IS employees and facilitate their transition into employment with EDSA. But the operation of cl 42 does not depend on whether the Bank believes there is or is not a redundancy situation, but rather operates when the Bank no longer requires work (or major portion of it) to be performed. That latter question is to be answered by reference to the facts and inferences to be drawn from the facts about what the Bank required.
95 This leads to a consideration of the question of whether cl 42 obliged the Bank to terminate the employment of the seconded employees. It was not an issue I had to consider in Hawkins (No 1). It was, however, an issue considered by the Full Court. While I am, sitting as a judge of the Federal Court, probably not bound (as a strict matter of precedent) by the judgment of the Full Court of the Industrial Relations Court of Australia, no submission has been made that I should not follow it. I consider I should follow the decision of the Full Court in Hawkins(No.2) given that it is a judgment of a Full Court of a Commonwealth superior court of record constituted by judges who are also judges of the Federal Court. While the judgment involved the construction of an industrial instrument and not a statute, the approach of the Full Court in Qantas Airways Ltd v Cornwall (1998) 84 FCR 483 at 489-490 seems apposite. Moreover, both the applicants and the Bank relied on the Full Court's judgment in Hawkins (No 2) as if I was bound by it.
96 It is clear that the Full Court in Hawkins (No 2) viewed the clause then under consideration as requiring the Bank to retrench an employee who was in a redundancy situation if no offer of alternative employment was made. The Full Court said (at 219):
"As already stated, cl (e) contemplates that the Bank, in pursuit of its obligation to make reasonable efforts to redeploy an officer in a redundancy situation, may offer alternative employment of two types. However if no offer at all is made, clearly the officer cannot be redeployed and shall be retrenched: cl (f)(i). The consequence of the redundancy is thereupon crystallised."
and later (at 222):
"It follows from the construction that the Agreement permits only one offer of alternative employment, that when redeployment subject to the trial period fails because the officer finds the employment is unsuitable, that upon such a failure the officer 'cannot be redeployed' within the meaning of cl (f)(i). Accordingly the Bank comes under an obligation under that clause to retrench the officer."
97 It appears to follow from these conclusions of the Full Court that the Bank is under an obligation to retrench an employee in a redundancy situation if the employee is not redeployed. It appears to be immaterial whether this results from their being no offer of alternative employment (whether to a directly comparable position or other employment) or results from the employee taking up an offer of alternative employment but the alternative employment proving to be unsuitable as was the case with Mr Hawkins. Accordingly, I accept the submission of the applicants that the Bank was obliged to terminate the employment of the seconded employees because on 10 October 1997 they were in a redundancy situation and no offer had been made of the type contemplated by subcl (d) and, in particular, par (iv). The Bank was also then under an obligation to pay severance pay as contemplated by subcl (g).
98 The Bank submitted that even if the members of the group had been in a redundancy situation and the Bank had been, at the time, obliged to terminate their employment, there had been no terminations. Accordingly the Bank's obligation to pay severance pay did not arise. It only arose if there was, and was conditional upon, termination by the Bank. However in Hawkins (No 2) the Full Court determined that Mr Hawkins was entitled to severance pay even though his employment had not been terminated by the Bank. It is true his employment had been terminated, though by him. However, the Full Court took the view that the provision required the Bank to terminate the employment and pay the severance pay. The Full Court accepted (at 222) that the word "retrenchment" meant termination by the employer. The Full Court concluded (at 224) that when Mr Hawkins could not be redeployed:
"The Bank thereupon came under an obligation to retrench him under cl (f)(i) and to pay retrenchments payments under the Agreement."
The entitlement to payment was not treated as conditional on termination, as a matter of fact, by the Bank. It follows, in my opinion, that the Bank's obligation to pay severance payments did not depend on the Bank terminating the employment of the members of the group.
99 The 70 employees who constitute the representative group were in a redundancy situation on 10 October 1997 but each was not then redeployed as contemplated by cl 42, even though each continued in employment for varying periods after that date. In those circumstances, the Bank would have been, on 10 October 1997, obliged to retrench each of the employees. It failed to do so and was in breach of the Award. To the extent that the Bank failed to pay some of the members of the group severance pay, it also breached the Award. In reaching this conclusion I am conscious that two of the sixteen group members who were not paid severance pay appear to have taken up employment after 10 October 1997 with the Bank in other areas of its operations (that is, outside the information technology area taken over by EDSA). However having regard to the conclusion of the Full Court in Hawkins (No 2) the obligation of the Bank to retrench and pay severance pay arose when the redundancy situation arose, namely 10 October 1997.
100 These reasons and the order I will make do not conclude these proceedings. Accordingly I propose to adjourn them for further directions. It may well be, however, that the appropriate course is for the Bank and the applicants to agree on amounts payable to the sixteen employees and orders made in relation to them, subject, of course, to the right the Bank has to appeal.
I certify that the preceding one hundred (100) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.