In Yousif v Commonwealth Bank of Australia [2010] FCAFC 8 the Federal Court Full Court rejected an appeal by a CBA mobile lender against the Federal Court’s decision not to grant her relief against the termination of her employment.

Although the Bank won, the case canvasses a range of issues including the way in which CBA dealt initially with an unhappy employee and her subsequent application for an internal transfer and an internal investigation.

The case also considers a breach of privacy by the Bank relating to the employee’s CommSec records and whether the Bank’s internal policy relating to appointments was part of the employment contract.

The case is worth reading as an example of the way things can go wrong.

Here’s the Agenda for our next meeting on 24 February:

1.    Are you prepared for the new National Consumer Credit regime?

a)    Reviewing Langes NCC Compliance Checklist

b)   ASIC Credit Guidance Registration and Licensing requirements

c)    New form of default notices

2.   Other items for discussion

a)    Personal Property Securities update

b)   Guarantee Scheme for Large Deposits and Wholesale Funding to end.

c)    Financial Claims Scheme– requirement for disclosure in PDS.

d)   Reminder: AUSTRAC 2009 AML/CTF compliance reporting dates –independent reviews?

Members can download slides now from the LCAP website.

The Fair Work Act  now governs employment, with the new Banking, Finance and Insurance Award  replacing the Credit Union and other financial services awards as of 1 January .

With the new National Employment Standards also applying from 1 January there are some important changes now in place .

We recommend a review to identify inconsistencies between the new award and the National Employment Standards in:

1. your letters or offers of employment.

2. employment contracts ( new and existing )

3. existing policies.

There may also be a need to develop new policies and procedures eg letters responding to flexible work requests.

You should also review your existing policies relating to probation, parental leave, work-life balance and performance and misconduct.

Do your employment contracts include the new mandatory terms?

Have you drafted complying termination and redundancy pro forma letters?

Have you reviewed your leave forms, time sheets and pay slips to ensure they comply with new requirements in terms of content and retention periods.

If you need assistance, call Richard Farago.

It is becoming common for financial institutions to assign parcels of loans to each other.

But is the assignment effective?

It will depend on the terms of the loan agreements being assigned, the terms of the transfer and the assignment process.

And any enforcement rights exercised by the transferee will be restricted by the terms of the loan agreements.

In Goodridge v Macquarie Bank Limited [2010] FCA 67 Judge Rares of the Federal Court decided that one borrower’s loan which was part of a complex transfer of about 18,500 margin loans for nearly $1.5 billion from Macquarie Bank to (ultimately) Leveraged Equities Limited (part of the Bendigo and Adelaide Bank) was not validly assigned.

The borrower had sued for return of his investments which were forcibly sold as the result of a margin call.

After examining the specific circumstances Judge Rares decided that:

• the borrower had not in fact been in default,
• the demands were not made in accordance with the loan agreement,
• there was no power to sell the borrower’s investments,
• the sales were in breach of the loan agreement, and
• the investments should be returned to the borrower and he should be compensated for any loss after payment of his liabilities.

As well as deciding there was no valid assignment, the Judge decided that no proper notice of the assignment had been given and that Leveraged Equities had acted unconscionably.

The new threshold is $374,330 (up from $354,530) . The next change will be on 10 March 2010.

Further information is available at Hardship Threshold.

From 1 July 2010 (when the National Credit Law starts) the threshold will be fixed at $500,000.

The Government has announced that the Guarantee Scheme for large deposits over $1M will close to new liabilities from 31 March 2010.

Deposits covered by the Guarantee Scheme on 31 March 2010 (the Final Issuance Date) will continue to be covered for their term (up to five years), and for a period of up to 67 months from the Final Application Date (24 March 2010) in the case of at call deposits.

Depositors will not be able to increase the guaranteed amount above their closing balance on the Final Issuance Date. Any increase (including interest) to the balances of guaranteed accounts above their closing balances on the Final Issuance Date cannot be guaranteed.

Guarantee Scheme fees will continue to apply throughout the period for which the guarantee applies to the respective deposits.

The Financial Claims Scheme will continue to provide a free guarantee of deposits up to and including $1 million.