Finance Sector Union of Australia v Commonwealth Bank of Australia

REASONS FOR JUDGMENT 1 In issue in this matter is how the trial of a separate question should proceed. Both the applicants, the Finance Sector Union of Australia ("the Union") and Joseph Adams, and the respondent, the Commonwealth Bank of Australia ("the Bank"), seek the trial of a separate question as provided by O 29 r 2 of the Federal Court Rules. However there is a difference between them about how the question should be formulated. Before discussing the competing formulations and the arguments supporting them, I should briefly set out the nature of the proceeding. I do so by repeating a summary in an earlier judgment in this proceeding: [2003] FCA 51 ("the February judgment"). 2 These are a representative proceeding brought by the applicants on behalf of former employees of the Bank who resigned from their employment when the information technology services of the Bank were outsourced and provided to the Bank by a third party. The group members are said to number approximately 572. Amongst other things, it is alleged that the Bank breached the Commonwealth Bank Officers Award 1990 ("the Award") by failing to pay the group members severance payments on the basis that they had been made redundant. 3 The proceeding was commenced on 5 October 2000. It was in the docket of another Judge and the matter was fixed for hearing in July 2001. However the hearing did not proceed. The matter was transferred to my docket. This was because another matter ("the Macey matter"), raising broadly similar issues, was already in my docket and due to be heard by me. It was agreed that the further prosecution of this matter would await judgment in the Macey matter. Judgment was given in the Macey matter 16 November 2001: see [2001] FCA 1613 and judgment given in an appeal on 18 June 2002: see [2002] FCAFC 193 ("the Macey Full Court judgment"). The judgment of the Full Court determined the meaning of relevant provisions of the Award as they applied in the Macey matter. One material factual difference (on the facts as I presently understand them) between the circumstances raised in the Macey matter and those raised in this matter is that the employees said to have been entitled to severance pay under the Award in the Macey matter did not resign their employment with the Bank when the information technology services were outsourced, but the employees in this matter did tender their resignation. 4 The separate question formulated by the Bank (in a notice of motion filed on 26 September 2002) was: 1. Pursuant to Order 29 Rule 2, the following question be tried separately from any other question arising in the proceedings: whether the Bank was obliged to treat the employees identified in annexure K to the affidavit of Peter Kevin Presdee sworn 27 September 2000 as being in a redundancy situation for the purposes of clause 42(d)(i) of the Commonwealth Bank of Australia Officers Award 1990. 5 The separate question formulated by the applicants (in a notice of motion filed on 13 March 2003) was: 1. Pursuant to Order 29 Rule 2, the following question be tried separately from any other question arising in the proceedings: Whether on a true construction of Clause 42 of the Commonwealth Bank of Australia Officers Award 1990, an award of the Australian Industrial Relations Commission, employees listed in annexure K to the Affidavit of Peter Kevin Presdee sworn 27 September 2000 are entitled to severance payments in accordance with sub-paragraph (g) thereof. 6 There is, of course, a threshold issue of whether any question should be tried separately. Neither the Bank nor the applicants submitted there was any impediment in adopting the course each proposed. The point in issue was the terms of the question which, in effect, reflects a difference between the parties concerning how many of the issues which might arise in the proceedings should be addressed (or might possibly be addressed) as part of answering the question. A Court should be particularly cautious in trying a separate question unless it will or might finalise the proceeding or will finally resolve an issue between the parties: see Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334. However in a representative proceeding under Pt IVA of the Federal Court of Australia Act 1976 (Cth) it will often be appropriate to undertake the trial of a separate question or questions as part of resolving common issues on which the representative proceeding is based. I am satisfied it is appropriate to do so in this matter on the basis I now discuss. 7 The way the Award operates is as follows (this description is a broad summary intended only to illuminate what the competing formulations of the question might comprehend both as to legal issues and procedural implications). The Bank must pay an employee severance payments in particular circumstances. There must be a termination through retrenchment. Retrenchment occurs where the termination is as a result of redundancy. Redundancy arises where there is a position redundancy where work (or a major portion of that work) firstly, is no longer required to be performed or secondly, is to be performed at a new location which requires a change in residence of the employee concerned. There can be redundancy resulting from reorganisation; changed business practice; technological change; downturn in business; a decision to reduce the number of employees; or a general reduction in classification levels or positions. When an employee is in a redundancy position, the Bank should take steps to redeploy the employee, which can involve offering the employee a directly comparable position or another position. If the employee cannot be redeployed, retrenchment follows. If an employee declines to take up a directly comparable position and the employment is terminated, the Bank is not obliged to pay the employee severance pay. It might be obliged to do so, in other circumstances, if the redeployment is unsuccessful. 8 It can be seen that in relation to a particular employee (and arguably groups of employees) various paths can be followed if there is a position redundancy concerning the employee. Some might lead to continuing employment and some might lead to termination of employment. If the latter, some might lead to payment of severance pay and some might not. The question formulated by the Bank invites determination of the question of whether there is a redundancy situation but not the determination of residual issues if that question is not answered in the Bank's favour. It is, in a sense, a threshold question, the answer to which determines whether other questions arise and need to be answered. The question formulated by the applicants requires consideration of not only that threshold question but, if the threshold question is answered in a particular way, other questions. Those other questions, when answered, would determine whether the members of the representative group follow a path leading to an entitlement to severance pay. The controversy between the parties is ultimately whether there was such an entitlement. 9 It might be expected that to answer the question proposed by the applicants, many issues of fact would have to be resolved and findings of facts made which were peculiar to each employee as well as detailed findings of fact made concerning the circumstances more generally leading up to the employees tendering their resignation. Indeed this prospect was one of the matters relied on by the Bank supporting adoption of its question and rejection of the question proposed by the applicants. It is a prospect which I accept might have warranted the adoption of the Bank's formulation of the question. However the applicants have now indicated that the evidence they will rely on is limited in its compass. In a letter from their solicitors dated 9 May 2003, they indicated the following evidence would be relied on (whether the question is formulated as they proposed or as the Bank proposed):