There are arrangements in the Australian Public Service (APS) which limit the subsequent employment of people who have received a redundancy benefit (a ‘redundancy benefit recipient’). The circumstances where the restrictions apply are set out in clauses 4.4 and 4.4A of the Public Service Commissioner’s Directions 1999 (the Directions).

Who is covered by the arrangements?

The arrangements apply to persons who have received a redundancy benefit from:

• an APS agency; or
• the Australian Parliamentary Service;

and their ‘redundancy benefit period’ has not expired.

Each of the following payments is considered to be a ‘redundancy benefit’:

• a severance payment, or similar payment, made to an employee on cessation of the employee’s employment;
• a payment made to an employee as a result of the shortening of a retention period; and
• an incentive payment to retire.

However, the definition of a redundancy benefit as set out in the Directions specifically excludes any payment made to an employee as redundancy pay under the National Employment Standards (NES), as set out in s.119 of the Fair Work Act 2009.

Agency heads have the flexibility to engage persons prior to the expiry of their redundancy benefit period in certain circumstances (see below).

How is the redundancy benefit period calculated?

The ‘redundancy benefit period’ is based on the number of weeks and whole days pay received as a redundancy benefit. The ‘redundancy benefit period’ is calculated by dividing the amount of the person’s redundancy benefit (gross amount in dollars) by the person’s weekly salary that was used to calculate the benefit (see clause 4.4). 

• Where such a calculation results in a part day absence, the redundancy benefit (or restriction) period should be rounded down to the nearest equivalent whole day. 
• In addition, where an employee has both full-time and part-time service and the part-time salary is used for the purpose of calculating the APS redundancy benefit, the redundancy benefit period should be calculated on the basis of the full-time equivalent salary used to calculate the redundancy benefit.

Other amounts that a person might receive on separation, such as payment for accrued entitlements and payment in lieu of notice of termination, are not taken into account when calculating the redundancy benefit period.

Impact of the NES on calculation of the redundancy benefit period

From 1 January 2010, APS or Parliamentary Service employees who had their employment terminated on excess grounds may have an entitlement to a redundancy benefit under the NES. In most cases this will not result in an increased benefit as APS/Parliamentary Service redundancy entitlements are generally more beneficial than those available under the NES. However, as the NES sets a minimum redundancy standard applicable across the community, this component of an individual’s redundancy entitlement is excluded when calculating the redundancy benefit (or restriction) period applying to subsequent employment in the APS. This will effectively result in a reduced redundancy benefit period for most persons terminated on or after 1 January 2010 as compared to persons terminated before that date who may have received the same overall redundancy benefit. 

Persons whose employment is terminated at the end of a retention period and who do not receive any redundancy payment, other than their NES entitlement, on termination are not be subject to a restriction on re-engagement in the APS.

However, where an employee enters into a retention period and his/her employment is terminated prior to the expiration of that period, with the balance of the retention period paid as a lump sum payment, then the person will be subject to the restrictions applying to future engagement in the APS. 

In these cases:

• where an agency agreement provides that this lump sum payment is to be adjusted by the employee’s NES redundancy entitlement, and termination of employment occurs on or after 1 January 2010, the calculation of the restriction period should be based on the actual lump sum payment, excluding the NES component. 
• However, where an agency agreement made prior to 1 January 2010 does not include any reference to NES redundancy payments, the redundancy benefit period in these circumstances should be calculated on the basis of the whole of the lump sum payment, regardless of the date of termination of employment. The reason for this is that transitional regulations made under the Fair Work Act provide that an employee terminated on or after 1 January 2010 has no entitlement to NES redundancy pay in these circumstances, provided the value of the retention period and any lump sum payment is greater that the NES amount that would otherwise be applied to the employee.

Further information on these FW Act transitional regulations is contained in DEEWR’s Workplace Relations Advice 2009/9What needs to be done to engage a redundancy benefit recipient prior to the expiry of their redundancy benefit period?

Agency heads have limited scope to engage a redundancy benefit recipient in circumstances where the redundancy benefit period has not expired (see clause 4.4A).

In most cases, it is necessary to either gain the approval of the Public Service Commissioner (the Commissioner), or consult with the Commissioner, prior to the engagement.

Agencies could consider issuing a pro-forma letter which advised staff of their redundancy benefit period when terminating employment on excess grounds. Individuals could then provide this information to other agencies when applying for future jobs in the APS.

Engagement as an ongoing APS employee or as a non-ongoing SES employee

An agency head is required to seek the approval of the Commissioner before engaging a redundancy benefit recipient as an ongoing employee (at an SES or non SES level) or as a non-ongoing SES employee. An agency head also needs to be satisfied that the engagement is essential to the agency’s operations having regard to the nature of the duties to be performed and the skills, experience and/or qualifications of the person.

Engagement as a non-ongoing (non-SES) employee

An agency head is required to consult with the Commissioner before engaging a redundancy benefit recipient as a non-ongoing (non-SES) employee for a specified term or a specified task, where the term of employment, or the duration of the task, is more than six months. Consultation is also required where a redundancy benefit recipient is initially engaged for a specified term or task of six months or less and the period of employment is extended beyond six months, where the person’s redundancy benefit period has not expired. An agency head also needs to be satisfied that the engagement is essential to the agency’s operations having regard to the nature of the duties to be performed and the skills, experience or qualifications of the person.

It is not necessary for an agency head to consult with the Commissioner prior to engaging a redundancy benefit recipient as a non-ongoing employee for a specified term or a specified task, where the person is to be employed for a period of six months or less (at a non-SES classification). However, for such engagements (and for the engagement of a redundancy benefit recipient as an irregular or intermittent employee), the agency head needs to be satisfied that the engagement is essential for the agency’s operations, having regard to the nature of the duties to be performed and the skills, experience or qualifications of the person.

Engagement as a locally engaged employee

An agency head is able engage a redundancy benefit recipient as a locally engaged employee in circumstances where the agency head considers that the engagement is essential for the agency’s operations having regard to the nature of the duties to be performed and the skills, experience and/or qualifications of the person and consults with the Commissioner prior to the engagement.

These arrangements apply to the engagement as a locally engaged employee of a redundancy benefit recipient who is a former APS employee or a former employee of the Parliamentary Service. They also apply to a former locally engaged employee who is seeking to be engaged again as a locally engaged employee.

A former locally engaged employee who is a redundancy benefit recipient and who seeks employment in the APS as either an ongoing or non-ongoing APS employee is covered by the arrangements set out above in relation to ongoing and non-ongoing engagements.

Submissions to the Commissioner

In seeking the Commissioner’s approval, or when consulting with the Commissioner, prior to engaging a redundancy benefit recipient, an agency head will need to address the following issues:

• the specific skills, experience and/or qualifications required for the performance of the particular duties;
• the steps that the agency has taken to fill the employment opportunity (extent of advertising, etc.);
• whether there are any other suitable candidates for the vacancy;
• the level of benefit received, the organisation it was received from and the time that has elapsed since it was received;
• the agency head’s view of the proposal to engage the person; and
• any other factors considered relevant by the agency.

What pre-engagement procedures should agencies adopt?

Agencies’ pre-engagement documentation should make it clear to applicants that they need to declare whether they have received a redundancy benefit from an APS agency or the Parliamentary Service. In such cases, agencies will also need to establish whether the person’s redundancy benefit period has expired, either through information provided to the individual by their former agency, and/or by contacting the person’s former agency to establish/confirm relevant details.

Legislation

• Public Service Commissioner's Directions 1999 ,clauses 4.4 and 4.4A