Managing Employee Relationship in Commonwealth Bank Australia

This essay discusses the impact of employee bargaining on the workplace and the entire business industry. It also highlights the ethical issues faced by Commonwealth Bank Australia and the role of employee bargain in establishing a better relationship between the employees and the management. The legal framework for employee bargain in Australia is also discussed.

Running Head: MANAGING EMPLOYEE RELATIONSHIP
MANAGING EMPLOYEE RELATIONSHIP
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Employee bargain is considered to be an important aspect to maintain the transparency
and benefits for both the employees and the employers in terms of the company. In this context,
as per the definition set by the Fair Work Commission (FWC) it can be argued that the
bargaining process is a negotiating terms between the employers or the company and an
individual employee or a group of employees (fwc.gov.au., 2018). It is covered as an agreement
between the two parties in order to establish transparency in the relationship between the
company and the employees. As a matter of fact, this negotiating terms has to be mentioned
during the recruitment process. In this context, the essay is trying to discuss the employee
bargaining practice in Commonwealth Bank Australiain the light of understanding the
relationship between the employees and the bank authority. In course of the discussion, both the
alternative perspectives of both the employees and the bank authorities were discussed in order
to perceive a clear idea regarding the employment relationship. In this context, the legal
considerations were also taken into the discussion with addressing the recommendations.
Furthermore, it can be stated that the report puts emphasis on the overall impact of the employee
bargain on the workplace as well as the entire business industry.
It can be argued that the Commonwealth Bank had faced a series of ethical issues in
recent times that were related to the organisational culture or the relationship with the staffs and
customers. In this context, the incident of fraudulence in 2014 was very important that shook the
firm market capitalisation of Commonwealth Bank Australia(CBA) and damaged its future
possibilities of becoming the best in Australia. According to Kruger (2018) it was stated that
CBA had lost its permanence and solidity in the Australian market due to lack of understanding
and mismanagement within the workplace culture. It was true that the company was very
intended to maximise its market through exploiting the customers to some extent. It raised

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question against the corporate sustainability that was supposed to be followed by the
organisation. On the contrary, Kruger (2018) showed that CBA was failed to develop such
measures that were very important in recent times in order to establish customer base
strategically. Furthermore, the bad management process hampered the relationship between the
employees and the management authority. In the previous year Commonwealth Bank
Australiabecame a news due to terminate 7000 employees. However, that was not the end of the
employee related issues in CBA. The company recently came to the limelight again because of
imposing huge burden of financial scandal remunerations on the employees.
The report of Sydney Morning Herald ventilated a report stated that the bank was
proposed to impose a huge burden worth of $100 million on the employees that had be waged
due to financial scandals over the past two years. In other words, it can be argued that the
organisation deliberately condemned its employees for those financial breaches and scandals and
as a consequence levied huge remuneration amount on them. The news also highlighted that the
downward profit margin of CBA in 2018 with a rate of 53.0 was very threatening as the other
peer banking organisations scored 63.5 in the reputation score (Kruger, 2018). It pushed CBA to
implement drastic decisions of imposing remuneration burden on the employees. It was also
mentioned in the annual report of Commonwealth Bank Australiathat they felt sorry for those
scandals and taking series of firm measures as a remedy. In this context, the incentives of the
management authorities will remain the same. The report also discusses the existing incentive
structures of the company management in order to perceive an idea regarding the discrimination
that was still exists in CBA. During the period of Ian Narev, he took a huge incentive in terms of
more than $3.3 million that exceeded his salary of 2.9 million. Besides this, the recent CEO of
CBA Matt Comyn is also a subject of further investigation because as per the report his

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remuneration is worth of nearly 3 million. Therefore, it is also not a small amount that the
company has to pay off to Comyn. Moreover, the former head of Operation Kelly Bayer
Rosmarin got a remuneration worth of $5.15 billion (Kruger, 2018). As a matter of fact, during
an interview with a news correspondent Comyn was asked the share his perceptions regarding
the continuous breaching of confidentiality of the company and in a reply Comyn indirectly
alleged the employees for those scandals. At that time the report asked him about the failure of
the top authority and Comyn strategically undermined it. However, the normal employees were
not familiar with their payments but still they had to pay the debts. This was against the
employee bargain measures and at the same time the Fair work ombudsmen set by the Australian
government is also breached because the charges CBA is intended to put on the employees are
unjustified and unequal. Therefore, there should be interference from the Australian government
and the legal bodies to prevent the process of further exploitation of the employees.
In this context, the Commonwealth Bank Australiastated a different version by
highlighting the imposing the remuneration on the higher authority only. As a result of that the
Sydney Herald covered the story that the CBA executives were decided to cut down their
incentives due to the scandals and atoned for those crimes. In this respect, the incentives of Matt
Comyn was also cut down to a half in compare to former executives of Commonwealth Bank
Australia. However, the company also published its annual report by stating that the senior
executives had to forfeit their incentives due to the fraudulent activities in the organisation. In
this context, the report encompasses the cut off in the incentives of the executives like former
wealth boss of CBA Annabel Spring who received just $4 million including the termination
payment of $1.37 million. In addition to this, the IT head of Commonwealth Bank Australia,
David Whitening also faced a deduction in remuneration with a total payment of $4.7 million

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including the termination payment.However, it can be stated that it never proved that the
company did not take any harsh step towards the employees. The news of terminating 7000
employees was identified as a consequence of those terms. It meant senior executives were not
cope with the situation rightly as there were several loops in their actions. At the same time, it
can also be stated that treating the employees by the senior management was illegal and
unjustified as it violated the Fair Work negotiations and the employee bargain agreements. The
scandal was purely driven by the lack of monitoring and decision making abilities by the
executives rather than have any relation with the inability of the normal employees. Therefore,
there is still some issues that are not addressed properly in terms of treating the employees
effectively and make a better workplace environment. From that point of view, it can be stated
that the role of the senior executives of Commonwealth Bank Australiawas unjust and
unprofessional enough to deal with the situation rightly. Putting a huge expense on the
employees or reducing the incentives of the senior management could not be an effective
solution that would mitigate the scandalous trend of Commonwealth Bank Australia.
In this context, it is pertinent to discuss the efficacy and importance of the employee
bargain process. For example, it can be stated that the role of the employee bargain is to create an
understanding related to disclosing the relevant information in a proper manner. It is the
responsibility of the management to illustrate the employees about the policies and terms and
conditions set for the employees (Beck & Paton, 2018). During the time of employment, the
staffs are informed about the agreements of their job and it must be followed both by the
organisation as well as the employees (Bott & Milkau, 2014). Therefore, it will help to build a
better relationship and transparency between the employees and the management. Besides this, in
Australia the Fair Work Act 2009 tries to set some measures for the organisations in order to

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establish a better operational framework and environment as well. Therefore, the Fair Work
Commission puts more emphasis on the employees and the majority support determinants. It
means employees with a majority decision have to be taken into consideration and the
organisation has to set its agreements on the basis of the benefits for most of the employees
(Chan, Watson & Woodliff, 2014). Therefore, from that point of view the employee bargain is
highly significant and fosters a healthy business environment.
As far as the legal framework for the employee bargain is concerned there are some legal
constraints and factors that are responsible to establish a better working environment in
Australia. In this regard, the important legal manifestations are Fair Work Act of 2009, National
Labour law in Australia and the Australian National Workplace Relations System.
In this regard, as far as the Fair Work Act 2009 is concerned it can be argued that the act
was enacted in 2009 by the Ludd Labour government in order to meet both the interests of the
organisations and the employees. In this regard, the FWA also enacted some provisions about the
enterprise bargaining that is resembled with the agreement between the employees and the
organisations (fwc.gov.au., 2018). As a matter of fact, the agreement can be made between
individual employee or group of employees in case of installing a fair understanding and
relationship between the employees and the employers (Poole & Jenkins, 2013).
On the other hand, the Employment and Labour Law 2018 was also a part of the FW
Act. However, this law is primarily put focus on the employees and tries to establish a better
understanding related to the privileges and benefits of the employees. In other words, the act
perceive asafeguarding measures for the interests of the employees so that they can get better
contract that can fulfil their interests (fwc.gov.au., 2018). Moreover, the employment law puts

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thrust on the minimum wage of the labourers and enforced some acts so that it can be followed
strictly and the interests of the employees will remain constant (Mailath, Postlewaite &
Samuelson, 2013).
On the other hand, the Australian National Workplace relations System was also
entitled to secure the interests of majority of the private company employees and also facilitate
some framework for making a better relationship and understanding between the employees and
the employers (jobs.gov.au., 2018). In this context, the minimum terms and conditions of
employment are the basic requirements that the employees have to follow and at the same time it
is also important for the employers to set some provisions that facilitates better workplace
environment in Australia as well prohibiting the organisations to practice unfair and unlawful
termination of employment (Pandher & Currie, 2013).
As a matter of fact, the Employee bargain has a deep impact on the workplace scenario. For
an example, in case of the workplace culture it can be articulated that the Employee bargain
tries to maintain a flexible environment inside the organisation so that the employees will
practice creativity and innovation in a great extent (Liu, 2015). Moreover, the role of the
organisations is to encourage the employees to a far extent so that they can feel freer to cherish
their innovative ideas. In addition to this, it can be stated that motivation and transparency is also
considered to be important feature of Employee bargain (Bova, Dou & Hope, 2015). In response
to this, it can be advocated that the role of the Employee bargain is to make the employees
aware of the terms and conditions of their job so that they can get a clear picture of the every
aspects of the job description (Breda, 2015). Furthermore, the process also make a better
understanding between the employees and the employers. This understanding is identified as a
strategic advantage that can facilitate the profits and sustainability of the organisation in one

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hand and satisfy the needs of the employees on the other (Kapoutsis, Volkema & Nikolopoulos,
2013).
The overall impact of the Employee bargain is related to the sustainability of the business
organisation. It is related with the corporate sustainability where the business organisation
primarily focus on its image and brand value that are responsible to maximise the customers and
make a quality service and product (Helveston & Jacobs, 2014). In fact, the Employee bargain
can provide some advantages to the organisational framework in order to deliver a strategic
benefit to the companies. From that point of view it is important to incorporate an Employee
bargain practice (Colvin, 2014). On the other hand, the practice also delivers a better treatment
in terms of the employee relation that usher creativity and innovation for the organisation (Dahl,
Le Maire & Munch, 2013). The organisation can push the employees to generate innovative
ideas so that the service quality of the organisation will be improved a lot. On the other hand, the
employee relation is an important aspect for the nations as well in order to build up the business
environment more attractive and effective (Faleye, Reis & Venkateswaran, 2013). In this regard,
the legislative frameworks have to be strong enough so that it can meet the interests of the
employees and imbibe creativity to a great extent. In case of the Commonwealth Bank it can be
stated that the role of the Employee bargaincan be identified as a very important aspect that can
provide strategic advantage for the company to deal with the ethical issues (John, Knyazeva &
Knyazeva, 2015). As a matter of fact, it can be stated that there are enough number of ethical
breaches in CBA that can be mitigated to a certain extent. At least the company could resolve the
employee issue with the help of the Employee bargain. In response to this, there is a huge
significance of the Employee bargainin order to establish a better framework for the CBA
(Dobre, 2013).

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In this context the role of HR is very crucial because the HR is the responsible person to
communicate with the employees directly. According to Kim and Sung-Choon (2013) the HR is
considered to be a bridge between the individual employees and group of staffs and the senior
management. Moreover, the HR is also responsible to understand the problems of the employees
and tries to safeguard their interests as far as he can. The Employee bargain provides them the
legal opportunity to communicate with the employees and ask them about any work related
problem. Therefore, the success or the result of the Employee bargain process is to a far extent
depended on the Human Resource managers. In his research Bidwell et al. (2013) argued that the
role of the HR is to notify the employees about any changes in the organisational policy.
Moreover, it is the responsibility of the HR to ventilate the interests of the employees to the
senior management. In addition to this, the mechanism of the communication between the HR
and the employee is based on the Employee bargain agreement (Arrowsmith & Parker, 2013). It
is imperative for the HR to procure such measures for the safety of the employees as well usher
more profit for the organisation. During the recruitment process all the details related to the
prospect and opportunities of the job are briefed by the HR so that the newly recruited employee
must acknowledge every aspects of the job. There can also be a negotiation of payments between
the interviewer and interviewee. At that time as per the Employee bargain norms the HR is
designated to discuss with the remunerations of the employees and also mentions the expected
payment that the company can provide (Boxall, 2013). From the above discussion it can be
stated that the HR is the determinant of the whole Employee bargain process that can deliver a
better framework of workplace transparency and effectiveness.
The recommendations for Commonwealth Bank Australiaare as follows,

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An effective HR management process has to be set up in order to conduct a better employee
relation mechanism so that both the employee and employer can get advantage of it. In this
regard, the HR manager has to acknowledge with the entire process of the Employee bargainand
also the legal constraints that can create further issues related to employment relationship. On the
other hand, procure a better mechanism in terms of the communication between the HRM
department and the senior executives so that the employee related issues can be addressed
properly. It is important for the organisation to manage its employment relations effectively
otherwise they can maximise their productivity and services. In case of the CBA it is important
to stabilise the organisational structure and the relationship between the employees and the
management.In addition to this, implementing a better understanding regarding the role of the
legal framework. As a matter of fact, the legal constraints are responsible to control the interests
of both the employees and the employers. It will create a better and healthy business
environment. As a matter of fact, the companies can also avoid any extra charges due to have a
great knowledge in the regulatory acts.
The above discussion is primarily puts emphasis on the Employee bargainand in this
context analyse the relationship between the organisations and the employees. For a better
understanding the essay also incorporates the case study of Commonwealth Bank of Australia
where the bank was alleged to have imposed bulk of money on the employees to mitigate the
reparation of $100 million that was charged due to ethical breaches. In this context, the
discussion rightly portrayed both versions of the allegation in terms of the employees and the
employers. From that point of view the essay derives the idea of the importance of Employee
bargainin an organisation. It can be argued that the employee bargain is a legal term that
connotes the agreement between the company and the employee to facilitate a better workplace

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culture. In addition to this essay also underlines the respective Australian legal aspects that are
contributed heavily on the context of Employee bargain. Therefore, it can be concluded that the
essay clearly defines the importance of the Employee bargain in the light of not only the profit
for the organisation but also the benefit of the employees. Henceforth, the essay is relevant and
rational enough.

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