Contents
Introduction
Part one – Legislative and industrial framework
1.1 Public Service Act and subordinate legislation
1.1.1 Ongoing APS employees
1.1.2 Non-ongoing APS employees
1.1.3 Additional requirements relating to Senior Executive Service employees
1.1.4 Review of termination of employment decisions
1.1.5 Reduction in classification
1.2 Fair Work Act
1.2.1 Unfair dismissal
1.2.2 Notice of termination
1.2.3 Payment of accrued entitlements
1.2.4 Notifying Centrelink and employee associations
1.2.5 General protections
1.3 Other relevant Commonwealth laws
1.4 Industrial instruments
1.5 Superannuation
Part two – Terminating the employment of an ongoing APS employee
2.1 Public Service Actrequirements
2.1.1 Grounds for termination under Public Service Act
2.2 Fair Work Actprovisions
2.3 Specific grounds for termination – excess to requirements (s.29(3)(a))
2.3.1 Management of excess staff situations
2.3.2 Australian Public Service Bargaining Framework
2.3.3 Fair Work Act
2.3.4 Redeployment of an excess employee - movement of an excess employee between agencies
2.3.5 Restrictions on engagement of redundancy benefit recipients
2.3.6 Agency-specific arrangements
2.3.7 Dealing with employees who are not fit for and not at work
2.4 Specific grounds for termination – lack of, or loss, of an essential qualification for performing duties (s.29(3)(b))
2.5 Specific grounds for termination – non-performance, or unsatisfactory performance of duties (s.29(3)(c))
2.5.1 Non-performance of duties
2.5.2 Unsatisfactory performance of duties
2.5.3 Non-performance or underperformance of duties due to injury, illness or disability
2.6 Specific grounds for termination – inability to perform duties because of physical or mental incapacity (s.29(3)(d))
2.6.1 Fair Work Act
2.6.2 Disability Discrimination Act
2.6.3 Superannuation issues
2.7 Specific grounds for termination – failure to satisfactorily complete an entry-level training course (s.29(3)(e))
2.8 Specific grounds for termination – failure to meet a condition of engagement (s.29(3)(f))
2.9 Specific grounds for termination – Breach of the APS Code of Conduct (s.29(3)(g))
Part three - Terminating the employment of a non-ongoing APS employee
3.1 Public Service Act provisions
3.2 Superannuation issues
3.3 Review of termination decisions
3.4 Fair Work Act provisions
3.4.1 Unfair dismissal
3.4.2 General protections
3.4.3 Notice of termination
3.4.4 Application of National Employment Standards redundancy pay provisions to non-ongoing employees
3.4.5 Advising Centrelink and Unions
3.4.6 Compensation for early termination
Appendix A: Fair Work Act provisions – further information
Appendix B: Compensation for early termination of non-ongoing APS employees engaged for a specified term
Appendix C: Amounts to be included in payment in lieu of notice
1
Introduction
1
This guide provides Australian Public Service (APS) agencies with information on issues relating to the termination of employment of APS employees. Termination of employment is a serious matter and the power to terminate employment under the Public Service Act 1999 (PS Act) is subject to a number of checks and balances.It is important that agencies are aware of the framework governing termination of employment and exercise relevant administrative powers consistent with the framework and with the APS Values.
This guide provides advice relating to:
- the different grounds of termination set out in section 29 of the PS Act; and
- the legal requirements governing termination of employment, particularly those applying under both the PS Act and the Fair Work Act 2009 (FW Act).
It also touches on the requirements of administrative law, anti-discrimination laws, superannuation law and industrial instruments.
As the law regulating termination of employment is complex and subject, amongst other things, to the jurisdiction of Fair Work Australia, agencies are encouraged to establish appropriate mechanisms to inform themselves of any legislative changes and developments in case law.
There are other APS publications that should be read in conjunction with this guide, depending on the nature of the termination decision. For example, there are more extensive guides that deal with:
- Senior Executive Service termination decisions – see
- arrangements relating to probation – see
- other conditions of engagement – see and
- handling misconduct – see
Part one – Legislative and industrial framework
This part outlines the legislative and industrial framework relating to terminating the employment of an APS employee under section 29 of the Public Service Act 1999 (PS Act). Under the PS Act, agency heads have all the rights, duties and powers of an employer. Their decisions must, of course, comply with the requirements of the PS Act and the various instruments issued under the Act including the Public Service Regulations 1999 (PS Regulations) and the Public Service Commissioner's Directions (the Directions). Employment decisions must also take account of the requirements of the Fair Work Act 2009, administrative and other Commonwealth law, and the common law of employment.
The PS Act allows an agency head to delegate to another person many of the agency head’s powers or functions under the Act.Any delegation of these powers by the agency head must be in writing. A reference in this guide to the agency head can also mean their delegate.
The PS Act is interpreted and applied by all APS agencies. It is therefore important that the Australian Public Service Commission (the Commission) be kept fully informed of current legal thinking on the interpretation of the Act so that this can inform the advice provided by the Commission to agencies. Agencies are therefore requested to liaise with the Commission when obtaining advice and forward copies of any legal advice that they obtain regarding the PS Act framework to the Commission, in line with Clause 10 of the Legal Services Directions. These should be forwarded to:
Legal Services Unit
Australian Public Service Commission
16 Furzer Street
PHILLIP ACT 2606
Agencies are also asked to ensure that the Commission is notified of any court or Fair Work Australia proceedings that raise interpretation of the PS Act framework. The initial point of contact for such cases is the Group Manager of the Employment Policy Group on (02) 6202 3808.
1.1 Public Service Act and subordinate legislation
Under section 29(1) of the PS Act, an agency head (or delegate) may, by notice in writing, terminate the employment of an APS employee in the agency[1]. Any decision to terminate the employment of an APS employee must be consistent with the requirements of the PS Act, including the requirement to uphold the APS Values (as set out in section 10(1) of the PS Act) and the requirements set out in the Directions.
There are a range of provisions that may apply depending on the employment status of the employee and the particular reason why termination of employment is being considered.
1.1.1 Ongoing APS employees
Subsection 29(2) of the PS Act requires that, for ongoing APS employees, the notice of termination to the employee must specify the ground or grounds for termination, with section 29(3) setting out the only grounds that can be relied on for terminating the employment of an ongoing employee.
These grounds are as follows:
- the employee is excess to the requirements of the agency– see 2.3 of this guide
- the employee lacks, or has lost, an essential qualification for performing his or her duties– see 2.4
- non-performance, or unsatisfactory performance, of duties– see 2.5
- inability to perform duties because of physical or mental incapacity– see 2.6
- failure to satisfactorily complete an entry-level training course– see 2.7
- failure to meet a condition of engagement imposed under section 22(6) of the PS Act– see 2.8
- breach of the Code of Conduct– see 2.9
- any other ground prescribed by the Public Service Regulations – no other grounds have been prescribed as at January 2012.
A decision to terminate the employment of an ongoing APS employee (including the grounds for termination) must be notified in the APS Employment Gazette (PS Regulation 3.12).
Further guidance related to the termination of employment of ongoing APS employees including information on the grounds of termination available under section 29 of the PS Act is provided at Part two of this guide.
1.1.2 Non-ongoing APS employees
Where a person is engaged as a non-ongoing APS employee for a specified term, a specified task, or on an irregular or intermittent basis where there is a specified end date, the employment ceases at the end of the period or completion of the task and the person is not regarded as having their employment terminated at the initiative of the employer for the purposes of the FW Act.
However, where it is proposed to terminate the employment of a non-ongoing APS employee before the normal expiration of the period of engagement, subsection 29(4) of the PS Act makes provision for regulations to prescribe grounds or procedures applicable to the termination of a non-ongoing APS employee, although section 29(5) also makes it clear that this provision does not, by implication, limit the grounds for terminating employment.
Regulation 3.11 of the PS Regulations identifies procedures applicable to the early termination of the engagement of a non-ongoing APS employee, namely that:
- where an industrial or other instrument setting terms and conditions of employment for an APS employee sets out procedures that apply to the termination of employment of a non-ongoing APS employee, then those procedures apply to the termination; and
- where it is proposed to terminate the employment of a non-ongoing APS employee on the ground that the employee has breached the APS Code of Conduct, then the finding of breach of the Code must have been made in accordance with the agency’s procedures established under section 15(3) of the PS Act.
See Part three for further guidance on the termination of employment of a non-ongoing APS employee.
1.1.3 Additional requirements relating to Senior Executive Service employees
For Senior Executive Service (SES) employees, there are certain additional requirements that must be satisfied before employment can be terminated. Clause 6.8 of the Directions requires that an assessment be made, having due regard to procedural fairness, that the termination is justified on the basis of one or more of the grounds mentioned in section 29(3) of the Act; and that the employee be provided with full information about other employment in the agency that the agency head considers could be made available to the employee.
In addition, under section 38 of the PS Act, an agency head cannot issue a notice of termination to an SES employee unless the Public Service Commissioner has issued a certificate stating that all relevant requirements of the Directions have been satisfied in respect of the proposed termination and that the Commissioner is of the opinion that the termination is in the public interest.
There are also specific provisions set out in section 37 of the PS Act and related Directions which give agency heads the power to offer an ongoing SES employee the opportunity to retire with an incentive. Where an SES employee retires with an incentive the employee is taken for all purposes to have been compulsorily retired from the APS.
More detailed information on SES staffing arrangements, including termination and retirement with an incentive payment, is available at
1.1.4 Review of termination of employment decisions
There is no right of appeal or review under the PS Act or the PS Regulations in relation to a decision to terminate the employment of an ongoing or non-ongoing APS employee (apart from a right under PS Regulation 7.2 to request investigation of the former employee's separation entitlements). However, the FW Act has rules and entitlements that apply to termination of employment, including minimum periods of notice,protections against unfair dismissal and dismissal in breach of the General Protections provisions of that Act – see 1.2below.
In addition to the remedies available under the FW Act, APS employees may also be able to apply for judicial review of termination decisions on the ground of failure to comply with the requirements of administrative law.
1.1.5 Reduction in classification
It should be noted that section 23(4) of the PS Act sets out a range of grounds under which an employee’s classification can be reduced without their consent. The list of grounds includes a sanction for a breach of the Code of Conduct; being excess to requirements at the higher classification; lacking, or losing, an essential qualification; non-performance, or unsatisfactory performance, of duties at the higher classification; and inability to perform duties at the higher classification because of physical or mental incapacity. There is considerable overlap between these grounds and those specified in section 29(3) of the PS Act in relation to termination of employment.As part of the decision making process to determine whether an employee’s employment should be terminated, an agency head may wish to consider a range of options, including whether, in the particular circumstances of the case, reduction in classification may provide a more appropriate outcome than termination of employment.[2]
1.2 Fair Work Act
The FW Act contains a number of provisions that are relevant to termination of employment, including in the General Protections and Unfair Dismissal provisions – see below. In addition, the National Employment Standards (NES), which are set out in the FW Act, establish minimum entitlements for notice of termination and redundancy pay which will apply to certain APS termination of employment decisions.
- Further information on the redundancy pay component of the NES as it applies to the termination of employment of an ongoing APS employee is set out in Part 2.3 dealing with termination where an employee is excess to the requirements of the agency, while Part 3.4 contains information on the circumstances where a non-ongoing APS employee may be entitled to an NES redundancy payment on termination of employment.
- Note that the unlawful termination provisions of the FW Act are not relevant to APS employees as all APS employees will be covered by the General Protections provisions in Part 3-1 of the FW Act. Therefore they would not be able to bring an unlawful termination claim (see section 723 of the FW Act).
1.2.1 Unfair dismissal
Part 3-2 of the FW Act sets out when a person may be entitled to a remedy for unfair dismissal. Unfair dismissal is where a person is dismissed from his/her employment and the dismissal is found to be harsh, unjust or unreasonable and is not a case of genuine redundancy.
Further guidance related to the application of the unfair dismissal provisions of the FW Act to termination of employment of APS employees is available at Appendix A.
1.2.2 Notice of termination
Under section 117 of the FW Act, an employer must provide an employee with a minimum period of notice, or payment in lieu of notice, before termination. The minimum notice period is as follows:
Period of continuous service / Notice period*Not more than 1 year / 1 week
More than 1 year, but not more than 3 years / 2 weeks
More than 3 years, but not more than 5 years / 3 weeks
More than 5 years / 4 weeks
* Note that under the FW Act, the relevant notice period increases by 1 week if the employee is over 45 years old and has completed at least 2 years continuous service with the employer.
Where payment in lieu of notice is made, the employee is entitled to receive payment of at least the amount the employer would have been liable to pay to the employee at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice. The payment is separate to any entitlement to redundancy pay that the employee may have.
Section 123 of the FW Act sets out certain exceptions to the requirement to pay notice, including where an employee’s employment is terminated for serious misconduct.
Further guidance related to the application of the notice of termination provisions of the FW Act to the termination of employment of APS employees is available at Appendix Aand advice on the amounts to be included when calculating payment in lieu of notice is at Appendix C.
1.2.3 Payment of accrued entitlements
Under section 90 of the FW Act, where an employee’s period of employment ends and the employee has a period of untaken paid annual leave,the employer must pay theemployee the amount that would have been payable to the employee had the employee taken that period of leave.
In addition, the Long Service Leave (Commonwealth Employees) Act 1976 sets out the circumstances in which employees will be entitled to payment in lieu of long service leave on termination of employment.
1.2.4 Notifying Centrelink and employee associations
The FW Act obliges employers to notify Centrelink and relevant unions where the employer decides to dismiss 15 or more employees for reasons of an economic, technological, structural or similar nature. This obligation will usually only arise in a redundancy situation. Further guidance on the provisions of the FW Act setting out the obligations on employers to notify Centrelink and registered employee associations is set out atPart two (in relation to the termination of an ongoing APS employee), and Part three(in relation to the termination of a non-ongoing APS employee).
1.2.5 General protections
Part 3-1of the FW Act contains the General Protections provisions. Among other things, these provisions protect employees from ‘adverse action’(e.g. dismissal, or injuring the employee in his or her employment) taken by their employer because the employee has or exercises a workplace right or participates in industrial activities.
- Workplace rights are broadly described as employment entitlements and the freedom to exercise and enforce those entitlements. An example of a workplace right is an employee’s right to be absent from work during parental leave.
- Engaging in industrial activities encompasses the freedom to be or not be a member of an industrial association and to participate in lawful industrial activities (e.g. the employee takes part in industrial action).
The General Protections provisions also contain a range of other miscellaneous protections. For example:
- section 351 of the FW Act prohibits an employer from taking adverse action against an employee for a discriminatory reason (e.g. race, sex or disability);
- section 352 of the FW Act prohibits an employer from dismissing an employee because they are temporarily absent from work due to illness or injury of a kind prescribed by the Fair Work Regulations (FW Regulations).
Further guidance related to the application of the General Protections provisions of the FW Act to termination of employment of APS employees is available at Appendix A.
1.3 Other relevant Commonwealth laws
Employment decisions made under the PS Act, including termination decisions, are generally required to be made in accordance with the requirements of administrative law including the Administrative Decisions (Judicial Review) Act 1977.
Each termination decision made under the PS Act must comply with the usual requirements imposed by administrative law, including: