‘A bank in crisis’: Union to lodge dispute with Fair Work against ANZ

The Finance Sector Union (FSU) has said it will lodge a dispute with Australia’s workplace relations tribunal, following news of a near-quarter-billion-dollar penalty to be paid by banking giant ANZ over “widespread misconduct”, as it plans to cut 3,500 jobs in the next year.

Editor’s note: This story has been updated to include ANZ’s response to FSU’s action, which was received following initial publication.

In recent weeks, HR Leader has reported on banking giant ANZ’s plans to slash 3,500 jobs in the coming 12 months, as well as an email blunder which resulted in staff learning about their apparent departures ahead of official redundancy notices. Now – in the wake of a “record” fine being brought against it by the corporate regulator – ANZ is being taken to the Fair Work Commission by the FSU.

ASIC settlement

Earlier today (Monday, 15 September), the Australian Securities and Investments Commission (ASIC) announced that ANZ had admitted to engaging in unconscionable conduct in services it provided to the Australian government, incorrectly reporting its bond trading data to the government by overstating the volumes by tens of billions of dollars, and for “widespread misconduct” across products and services, impacting nearly 65,000 customers.

The corporate regulator, together with the banking giant, will ask the Federal Court to impose penalties of $240 million, in relation to four separate proceedings spanning misconduct across ANZ’s institutional and retail divisions.

Under the planned agreement, ANZ will be subject to penalties, including $125 million for the institutional and markets matters, including a record $80 million penalty for unconscionable conduct, and $115 million in total penalties for the three retail matters.

Speaking about the fine, ASIC chair Joe Longo said: “Time and time again, ANZ betrayed the trust of Australians.

“The total penalties across these matters are the largest announced by ASIC against one entity and reflect the seriousness and number of breaches of law, the vulnerable position that ANZ put its customers in and the repeated failures to rectify crucial issues.

“Banks must have the trust of customers and government. This outcome shows an unacceptable disregard for that trust that is critical to the banking system.”

He added: “When public funds are put at risk, every Australian pays the price.”

ASIC deputy chair Sarah Court said: “The issues we have seen reflect serious inadequacies across multiple levels and multiple divisions of ANZ and a clear failure to manage non-financial risk. As one of Australia’s biggest banks, customers trusted ANZ to do the right thing but, even on the basics like paying the correct interest rate, it fell short.

“If these penalties are imposed by the court, it will be a clear message to ANZ and all other banks that the cost of breaking the law is not an acceptable cost of doing business.”

She added: “ANZ needs to prioritise the management of non-financial risk so it can step up and do better by its customers.”

In a statement, the bank said that, in its view, no loss was caused to the Commonwealth from its trading as duration manager.

“However, given ANZ could have executed its role as duration manager with better communication, ANZ has offered to pay the AOFM the revenue it earned as duration manager as a goodwill gesture,” the bank said.

ANZ chairman Paul O’Sullivan said: “While we have worked hard to get regulatory certainty on these matters, the reality is we made mistakes that have had a significant impact on customers. On behalf of ANZ, I apologise and assure our customers we have taken the necessary action, including holding relevant executives accountable.”

“While ASIC has not alleged that ANZ engaged in market manipulation, it’s clear we have not met the standards expected of us. We have apologised to the AOFM for the inadequate communication on this transaction and offered to pay the AOFM the revenue ANZ earned as duration manager.”

ANZ chief executive Nuno Matos said: “The failings outlined are simply not good enough, and they reinforce the case for change. It is my expectation that we see measurable improvements across the bank to better protect and care for our customers and to create a more sustainable business.”

The bank also said it will submit its Root Cause Remediation Plan (RCRP) to the Australian Prudential Regulation Authority (APRA) later this month, as required by the court-enforceable undertaking, and confirmed it expects to spend approximately $150 million on implementing the plan required under the RCRP in this financial year.

Including this instance, ASIC has now brought 11 civil penalty proceedings against ANZ since 2016, the regulator noted, with proposed and ordered penalties totalling more than $310 million.

The Federal Court is now set to determine whether the penalties are appropriate and to make other orders.

FSU action

On Monday afternoon, the FSU said it will lodge a dispute with the Fair Work Commission against the banking giant, referencing its aforementioned fine, its “bungling” of the thousands of job cuts, which the union said is “leaving thousands of workers in limbo”.

“Thousands of workers had a weekend of uncertainty, not knowing if they still had a job, with many facing questions from family and friends and not having answers. Today, the FSU is lodging a dispute with the Fair Work Commission, calling for urgent intervention, so workers can get the clarity they deserve after it found ANZ’s response to consultation requirements under the enterprise agreement woeful,” the union said in a statement.

The FSU will be meeting with workers this week, it said, to support them through the consultation process.

According to FSU national secretary Julia Angrisano, ANZ is “a bank in crisis – fined $240 million by ASIC for its misconduct, and now betraying 3,500 workers with bungled job cuts and secrecy. Thousands of families are left in the dark while executives protect their bonuses.

“ANZ has learned nothing from its record fine. Workers are once again paying the price. Loyal staff are being thrown on the scrapheap without clarity or respect. That’s why we’ve taken ANZ to the Fair Work Commission, because workers deserve honesty and certainty about their future,” she said.

“ANZ calls this a restructure, but to workers, it feels like chaos. Families are left in limbo, staff are blindsided, and whole communities will feel the impact when thousands of secure jobs disappear.

“ANZ can find $240 million to pay for unconscionable conduct, yet it’s cutting 3,500 staff. It shows a bank that is completely unhinged; workers and customers are the ones paying the price for executive failure.

“This record penalty makes clear ANZ’s leadership failed in its duty to customers, but instead of executives taking responsibility, it’s frontline staff whose jobs are being sacrificed.”

In a statement provided to HR Leader, a spokesperson for ANZ said the bank “has consistently engaged with our staff and the union on our proposed organisational changes”.

“We are confident we have met all of our consultation obligations. We are yet to be informed by the FSU of any application,” the spokesperson said.