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Engagement of people who have received a redundancy benefit

Last update 8 July 2013.

There are arrangements applying in the Australian Public Service (APS) which limit the subsequent employment of people who have received a redundancy benefit. (The circumstances where the restrictions apply are set out in clause 7.1 of the Australian Public Service Commissioner’s Directions 2013 (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’ (or restriction period) has not expired.

Note 1 – A list of APS agencies is available on this website 

Note 2– These arrangements do not apply to persons who have received a redundancy benefit from a non-APS Commonwealth employer or from a State/Territory Government employer (or from the private sector). There are no restrictions on such persons applying for advertised APS vacancies and competing on merit for APS employment.

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 section 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’ (or restriction 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 redundancy benefit (gross amount in dollars) by the person’s weekly salary that was used to calculate the benefit.

  • Where such a calculation results in a part day absence, the redundancy benefit period should be rounded down to the nearest equivalent whole day. 
  • In addition, where an employee has periods of full-time and part-time service, and the period of part-time service falls last (so that the person’s APS redundancy benefit is calculated on the basis of the part-time weekly salary), the weekly salary to be used is the full-time equivalent of that part-time weekly salary. This will ensure that the redundancy benefit period is not overstated by the use of the part-time salary in the calculation..

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.

An indicative table showing an estimate of the likely redundancy benefit period that will apply is at Attachment A.

Impact of the NES on calculation of the redundancy benefit period

From 1 January 2010, APS or Parliamentary Service employees who have their employment terminated on excess grounds may have an entitlement to a redundancy benefit under the NES. The NES sets a minimum redundancy standard applicable across the community. In most cases, APS and Parliamentary Service redundancy entitlements are more beneficial than those available under the NES and the NES will not therefore result in an increased benefit to affected employees. However, the NES component of an individual’s redundancy entitlement is excluded when calculating the redundancy benefit period applying to subsequent employment in the APS.

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, the person will be subject to the restrictions applying to future engagement in the APS. 

In these cases the calculation of the restriction period should be based on the actual lump sum payment, excluding the NES component.

What 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 sub-clauses 7.1 (6) and (7)).

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

When terminating an employee’s employment on excess grounds, agencies are encouraged to consider issuing the employee with advice on the duration of the redundancy benefit period. Individuals could then provide this information to other agencies if they apply for subsequent employment 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 or Parliamentary Service employee. 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

  • Australian Public Service Commissioner's Directions 2013, clause 7.1

Attachment A : Indicative redundancy entitlements and restriction periods

Years of service Standard APS redundancy entitlement NES entitlement Restriction period
Note this is an indicative table only. Each employee’s restriction period should be calculated individually.
<1 4 weeks Nil 4 weeks
1-2 4 weeks 4 weeks 0 weeks
2-3 4 weeks (+ pro rata amount for completed months of service) 6 weeks 0 weeks
3-4 6 weeks (+ pro rata amount for completed months of service) 7 weeks Up to 4 days (depending on completed months of service)
4-5 8 weeks (+ pro rata amount for completed months of service) 8 weeks Up to 1 week & 4 days (depending on completed months of service)
5-6 10 weeks (+ pro rata amount for completed months of service) 10 weeks Up to 1 week & 4 days (depending on completed months of service)
6-7 12 weeks (+ pro rata amount for completed months of service) 11 weeks Up to 2 weeks & 4 days(depending on completed months of service)
7-8 14 weeks (+ pro rata amount for completed months of service) 13 weeks Up to 2 weeks & 4 days(depending on completed months of service)
8-9 16 weeks (+ pro rata amount for completed months of service) 14 weeks Up to 3 weeks & 4 days (depending on completed months of service)
9-10 18 weeks (+ pro rata amount for completed months of service) 16 weeks Up to 3 weeks & 4 days (depending on completed months of service)
10-11 20 weeks (+ pro rata amount for completed months of service) 12 weeks 8 weeks (+ up to 9 days depending on completed months of service)
11-12 22 weeks (+ pro rata amount for completed months of service) 12 weeks 10 weeks (+ up to 9 days depending on completed months of service)
12-13 24 weeks (+ pro rata amount for completed months of service) 12 weeks 12 weeks (+ up to 9 days depending on completed months of service)
13-14 26 weeks (+ pro rata amount for completed months of service) 12 weeks 14 weeks (+ up to 9 days depending on completed months of service)
14-15 28 weeks (+ pro rata amount for completed months of service) 12 weeks 16 weeks (+ up to 9 days depending on completed months of service)
15-16 30 weeks (+ pro rata amount for completed months of service)) 12 weeks 18 weeks (+ up to 9 days depending on completed months of service)
16-17 32 weeks (+ pro rata amount for completed months of service) 12 weeks 20 weeks (+ up to 9 days depending on completed months of service)
17-18 34 weeks (+ pro rata amount for completed months of service) 12 weeks 22 weeks (+ up to 9 days depending on completed months of service)
18-19 36 weeks (+ pro rata amount for completed months of service) 12 weeks 24 weeks (+ up to 9 days depending on completed months of service)
19-20 38 weeks (+ pro rata amount for completed months of service) 12 weeks 26 weeks (+ up to 9 days depending on completed months of service)
20-21 40 weeks (+ pro rata amount for completed months of service) 12 weeks 28 weeks (+ up to 9 days depending on completed months of service)
21-22 42 weeks (+ pro rata amount for completed months of service) 12 weeks 30 weeks (+ up to 9 days depending on completed months of service)
22-23 44 weeks (+ pro rata amount for completed months of service) 12 weeks 32 weeks (+ up to 9 days depending on completed months of service)
23-24 46 weeks (+ pro rata amount for completed months of service) 12 weeks 34 weeks (+ up to 9 days depending on completed months of service)
24+ 48 weeks 12 weeks 36 weeks

 

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