In Barker v Commonwealth Bank of Australia [2012] FCA 942 the Federal Court gave judgment for a former employee who was made redundant against the Bank in the sum of $317,500 . The damages were awarded for breach by the Bank for not complying with its own policy with respect to the redeployment of a person in his position. The employee argued he thereby lost the opportunity to be redeployed to another position within the Bank.
UPDATE 8 August 2013: CBA’s appeal dismissed
Since leaving the Bank in April 2009, Mr Barker not obtained full-time employment with any other organisation. He claimed past economic loss of $110,000 plus an amount for pre-judgment interest, future economic loss of $1,160,000, general damages of $200,000 and aggravated damages of $100,000.
Barker had been employed by the Bank for 27 years and was an executive manager for Corporate Banking, Adelaide when in April 2009 he was made made redundant following implementation of a new business model by the Bank.
Whilst Judge Besanko rejected a number of breach of contract claims he decided that there was an implied term of mutual trust and confidence in the contract of employment between Mr Barker and the Bank and that that term had been breached by a serious breach of the Bank’s Redeployment Policy after Barker had been made redundant.
In explaining his decision to award Barker 25% of his claim Judge Besanko said:
“The first time the Bank contacted Mr Barker and raised with him the possibility of an alternative role within the Bank was on 26 March 2009. That was over three weeks after he had been asked to clear out his desk, and less than a week before the exit date proposed by Mr Davis in his email dated 20 March 2009 and not received by Mr Barker before 23 March 2009 (that is, 30 March 2009). That was also in a context where, on 2 March 2009, Mr Barker had been told that if he could not be redeployed then his termination date would be 30 March or 2 April 2009. The failure to contact Mr Barker earlier appears to have been because of a breakdown in communication between two sections or units of the Bank (Human Resources and Career Support) about where Mr Barker could be contacted. Whatever the reason, it is the lack of communication with Mr Barker which is significant. When Mr Barker was contacted on 26 March 2009, the particular position drawn to his attention was one which, in Adelaide at least, he was unlikely to secure. Having regard to the earlier meeting between Ms Taylor, Mr Formichella and Mr van Lierop, and Mr Formichella’s view, it was very unlikely that the Bank was going to give the position to Mr Barker. I am not prepared to say that the Bank’s conduct was a sham, but on any view, Mr Barker was very unlikely to secure the position. As far as the provision of a Career Circular is concerned that falls well short of engaging in any meaningful way in the redeployment process. ….
In terms of particular matters in the Redeployment Policy, there was no consultation with Mr Barker, the possibility of retraining was not raised or discussed with Mr Barker, advice about redeployment options and process was not sought by Mr Formichella and there was no redeployment plan developed or implemented.
On the other hand, Mr Barker himself did very little in terms of taking what the Bank’s letter of 2 March 2009 referred to as, “proactive steps in seeking redeployment”. It is necessary to consider whether his lack of activity affected the Bank’s obligations in some way. In his evidence, he sought to explain his inactivity in various ways. I think all of his explanations came back to a view on his part that the Bank was not genuine in stating that it wished to redeploy him. He referred to Mr Formichella’s statement on 2 March 2009 that he was not seen as part of the business going forward, the fact that he had been asked to leave the Bank on 2 March 2009 and felt that he had been dismissed, and the fact that he considered that the Career Support section would contact him. He said that he did not apply for the service excellence position once he heard from Ms Adlem that on 31 March 2009 Ms Breccia had referred him back to the business, that is to say, to Mr Formichella.
In other circumstances, inactivity by an employee might excuse the Bank from taking any steps, or any further steps after a certain point, under its Redeployment Policy. However, I think that the significant circumstances in this case are that Mr Barker, an employee of the Bank for approximately 27 years, was advised that his position was redundant and asked to leave the Bank and return items associated with his employment on the very day he was given such advice. Furthermore, his access to the Bank’s intranet and email facilities were immediately withdrawn. In that context, although it was not incumbent on the Bank to redeploy Mr Barker, it was incumbent on it to take timely and meaningful steps to comply with its own policy. It did not do that. It did not contact Mr Barker because of an internal error. When it did contact him, it was very late in the piece. I accept that by 31 March 2009, it was reasonable for Mr Barker to consider that there were no reasonable prospects of redeployment.
The Bank’s almost total inactivity within a reasonable period means that its breach of its Redeployment Policy was a serious breach and that it was in breach of the implied term of mutual trust and confidence.
The Bank was not obliged to redeploy Mr Barker. The Bank was not obliged to keep Mr Barker on for an indefinite period in order to see if he could be redeployed. Nor was it required to exclude from its decision-making broader commercial considerations. There were a limited number of positions and many of them were interstate. For these reasons, I am not satisfied on the balance of probabilities that had the Bank followed its Redeployment Policy Mr Barker would have been redeployed.
At the same time I am not satisfied that Mr Barker’s chances of redeployment were so insubstantial that they should be ignored ..
It is difficult to assess Mr Barker’s chances of redeployment. Doing the best I can and having regard to the evidence I have identified and the matters in paragraph 368, I assess the chance of redeployment at 25 per cent. “
