Managing Employee Relationship in Commonwealth Bank Australia

Running Head: MANAGING EMPLOYEE RELATIONSHIP
MANAGING EMPLOYEE RELATIONSHIP
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1MANAGING EMPLOYEE RELATIONSHIP
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

2MANAGING EMPLOYEE RELATIONSHIP
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