Federal Court: Slams CBA contracts

The Commonwealth Bank has broken the law by inducing employees to resign and sign individual contracts offering substandard conditions, the Federal Court has ruled. In a victory for all union members, the Finance Sector Union has won its case against a decision to transfer CBA employees to CommSec as a condition of working in its Premium Financial Services Division.

The CommSec contracts scheme they used to do it has also been exposed as invalid. The Federal Court said the move was like a tax avoidance scheme and was designed help the Bank escape its legal responsibilities to employees.

The Judge found that:

• CBA discriminated against its employees, disadvantaging them financially and legally because it wanted to avoid its obligations under the Union negotiated CBA enterprise agreements;

• The CommSec non union enterprise agreement is invalid and the individual contracts arising from it do not have the protection of the Workplace Relations Act;

• CommSec misled the Industrial Commission; and

• CBA committed a serious breach of CBA enterprise agreements when it failed to consult with FSU about its plans and the impact on employees.

The public interest

In declaring the CommSec Clause 12 agreement procedure invalid the Judge said "While it is unclear as to whether the procedure is being adopted by other employers, I have little doubt that, given the quest by a number of other major employers for unregulated individual contracts, it is in the public interest that the Court makes it clear the procedure adopted by CBA is not lawful."

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