FSU brings Fair Work action against “in-crisis” ANZ

On the same day as admitting to having “engaged in unconscionable conduct” regarding the reporting of bond trading data to the Australian Government and further misconduct as detailed by the Australian Securities and Investments Commission (ASIC), ANZ Bank has also become the target of action lodged by the Finance Sector Union (FSU) with the Fair Work Commission over its handling of 3,500 job cuts.

The FSU said it was lodging a dispute with the commission due to the bank’s “woeful” consideration of the consultation requirements under its enterprise agreement, with employees notified of ANZ’s job cut announcement last week via the media and are yet to receive any further clarification.

This comes as ANZ and ASIC have come to a mutual agreement that the Federal Court should enforce a $240 million fine regarding four separate misconduct proceedings across the bank’s institutional and retail arms. According to a statement from the corporate watchdog, the “misconduct occurred over many years and was marked by ANZ’s significant failure to manage non-financial risk across the bank”.

The four matters ASIC has filed against ANZ include:

• Acting unconscionably in its dealings with the Australian Government whilst managing a $14 billion bond deal and incorrectly reported its bond trading data to the Australian Government by overstating the volumes by tens of billions of dollars over almost two years;
• Failing to respond to hundreds of customer hardship notices, in some cases for over two years, and failing to have proper hardship processes in place;
• Making false and misleading statements about its savings interest rates and failing to pay the promised interest rate to tens of thousands of customers; and
• Failing to refund fees charged to thousands of dead customers and not responding to loved ones trying to deal with deceased estates within the required timeframe.

“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,” FSU National Secretary, Julia Angrisano, said.

“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.

“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. Three banks have slashed jobs in less than a week and now ANZ has been hit with the largest penalty in Australian banking history. It paints a picture of an industry that’s out of control and desperately needs stronger regulation.

“Workers are already reeling from ANZ’s cuts. This penalty underlines the need for Federal intervention — banks cannot be allowed to treat customers with contempt and gut their workforce at the same time.”

The FSU confirmed it will meet with affected workers to offer support throughout the Fair Work action’s consultation process.

ASIC Chair, Joe Longo, said the bank has not only denied thousands of workers the clarity they deserve but also betrayed the trust of 65,000 customers.

“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,” he said.

“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.

“There are fundamental issues with ANZ’s risk and compliance culture that require the Board’s and executives’ urgent attention.

“In the bond trading case, ANZ was in a trusted position and its conduct had the potential to reduce the amount of funding available to the government. This funding is used to support critical services including Australia’s health and education systems, affecting all Australians.

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

The penalties levied at ANZ consist of $125 million for the institutional and markets matters – including a record $80 million penalty for unconscionable conduct – and $115 million in total for the three retail matters. This brings the ANZ’s total penalty tally to over $310 million across eleven civil penalty proceedings brought by ASIC since 2016.

“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,” ASIC Deputy Chair, Sarah Court, said.

“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.”

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