Bad apple register not a ‘black list’, says ABA

The proposed bank employee registry, which is intended to keep tabs on poor conduct individuals, will include mechanisms for procedural fairness and not be used as a “black list”, the Australian Bankers’ Association has said.

In his fourth report into the progress of the banking sector in implementing these initiatives, Ian McPhee said the Conduct Background Check Protocol continues to be “one of the more difficult measures to implement given the legal issues involved”.

The protocol builds on the principles of the ABA’s Reference Checking and Information Sharing Protocol for financial advisers, which was announced in September 2016.

According to Mr McPhee’s latest report, the protocol is intended to require banks ask a series of fact-based questions during a hiring process about whether an individual is subject to an ongoing investigation or was dismissed or resigned in specific circumstances relating to misconduct.

The ABA has noted, however, that there will be mechanisms included to ensure procedural fairness for employees and protect against “vexatious dealings by employers”.

“The ABA has advised that the protocol is intended to supplement existing processes for reference checking and is not intended to be used as a ‘black list’ or ‘banning register’,” Mr McPhee said. 

The protocol will be published May 2017, with major banks expected to adopt it by 1 July 2017 and the smaller banks by 1 October 2017.

At the same time, the ABA has amended the initiative that would lead to this bad employee register.

Initiative 4, which is ‘removing individuals from the industry for poor conduct’, initially proposed in its objective to “implement an industry register to identify poor conduct”.

However that has been updated to read that the sector will introduce “an industry wide register or mechanism”.

“I have sought and received assurances from the ABA that this amendment is not intended to diminish the original intention of this initiative, and that the industry remains committed to pursuing the establishment of a register, recognising this will require support through some form of statutory underpinning,” Mr McPhee said.

“In the interim, the Conduct Background Check Protocol is intended to provide a solution applicable to bank employees, but not more broadly across the financial services industry.”

Overall however, Mr McPhee said that “participant banks continue to make good progress” implementing the initiatives while remaining alert to changes in the political and regulatory environment, and were aware of the amount of work still to be completed.

“Real progress is evident in the development of the various measures and in the attitudes of individual banks in progressing changes in bank policies and approaches,” he said.

 

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