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Last updated: 28 August 2000
Circular No 2000/2 : Australian Industrial Relations Commission decision in respect of a termination of employment
Note: This document has not been updated to reflect changes that may flow from the WorkChoices legislation enacted on 27 March 2006
Purpose
The purpose of this circular is to advise agencies of a recent decision of Senior Deputy President Watson (Watson SDP) of the Australian Industrial Relations Commission (AIRC) concerning an application under s.170CE of the Workplace Relations Act 1996 with respect to a termination of employment.
2. While Watson SDP noted that the matter was to be determined by reference to the specific circumstances of the case and should not be seen to have any broader implications for the Australian Public Service redeployment process, there are issues that agencies should consider as a result of the decision.
Background
3. The case concerns the termination of the employment of an employee (the applicant) by the Department of Employment, Workplace Relations and Small Business (the respondent) on 8 January 1999. The applicant, who had been declared an excess officer and was terminated at the conclusion of a retention period, contended that the termination of her employment was harsh, unjust and unreasonable. The applicant argued that she was not given "a fair go" and that the respondent's failure to redeploy her and her consequential termination was inconsistent with the relevant agreements, awards and statutory provisions, contravened fair practice, and was inconsistent with the practices accorded to other staff.
4. The issue that was central to the proceedings was whether there was a valid reason to terminate the applicant's employment. At the time the decision was made by the respondent not to extend the retention period of the applicant, negotiations were in train that may have led to a work trial in the Department of Immigration and Multicultural Affairs (DIMA). Negotiations were oral and no formal offer had been received by the respondent from DIMA. No extension was granted as no formal offer of a permanent position had been made to the applicant and there was no guarantee that a work trial would lead to a job offer or ongoing permanent employment.
What was decided
5. Watson SDP found that the application by the respondent of a "rigid policy position", adopted as a matter of practice, whereby agreement was not given to the extension of the retention period of the applicant in the absence of an offer of a permanent position, failed to have proper regard to the specific circumstances of the case and failed to afford the applicant the same opportunities afforded other excess employees. He also found that the "rigid" approach was not a proper application of the provisions of s.76W of the Public Service Act 1922 and did not take into account the individual circumstances of the employee, most importantly the fact that, given the assessment of the applicant by the DIMA interview panel, the work trial offered a significant prospect of ongoing employment. Watson SDP expressed the view that it would be possible to extend a retention period for the duration of a two or three month trial period as proposed in this case without detriment to the employer's ability to terminate the employment at the end of the trial.
6. Watson SDP concluded that, in the circumstances, the Department did not have a valid reason for the termination of the applicant, and found that the termination was harsh, unjust and unreasonable. The applicant was reinstated and awarded compensation in respect of lost remuneration. A more detailed summary of the case is provided at Attachment A (see below).
7. An appeal to a Full Bench of the AIRC against this decision was not allowed on the basis that the Tribunal found that the matter did not raise issues of such public importance that an appeal should lie. As the primary decision was not overruled on appeal, the Full Bench decision (Department of Employment, Workplace Relations and Small Business, Dec 656/00 M Print S6916 of 14 June 2000) is not considered in this circular.
8. Subsequent advice suggests that the decision of Watson SDP to order reinstatement on terms and conditions no less favourable than those on which the applicant was employed immediately before the termination of her employment may still leave the applicant as an excess employee on her return to duty, and thus possibly subject to termination in due course.
Issues for agencies to consider as a result of the decision
9. While s.76W no longer applies, this decision raises issues about the policies adopted by agencies and the provisions contained in agency agreements concerning redeployment and retirement of excess staff. In terms of policy, the approach adopted by an Agency towards the extension, if any, of a retention period, should be applied consistently across the Agency. Staff should also be aware of any policy and, in particular, agencies should consider putting in place procedures to ensure that affected staff are fully informed of their rights and obligations at the commencement of any retention period.
10. It is important in developing agreements for agencies to give consideration to articulating, as precisely as possible, the circumstances under which a retention period may be extended, if at all. The situation in which an extension may be considered could include, for example, where a formal offer of an ongoing position has been made; where there is a strong likelihood that a formal offer of an ongoing position will be made; or where an offer of a work trial has been made, and there is a strong likelihood that an ongoing arrangement will eventuate. Consideration should also be given to identifying the maximum extension that would be approved if a trial placement is to be allowed.
Further advice
11. Enquiries about this circular should be directed to the PSMPC's Helpline on (02) 6202 3859.
Jeff Lamond
Team Leader
Staffing, Structures and Performance Team
August 2000
Attachment A : Australian Industrial Relations Commission - s.170CE application for relief in respect of termination of employment - A Solecki (the applicant) and the Department of Employment, Workplace Relations and Small Business (DEWRSB) (U No. 31028 of 1999) - decision and order Prints S4169 and S4170 by Watson SDP on 23 March 2000
The applicant worked for the former Commonwealth Employment Service (CES), Department of Employment, Education, Training and Youth Affairs (DEETYA), from 1992 until the CES ceased to exist in April 1998 as a result of a Government decision to replace it with the Job Network.
2. The applicant was declared excess on 1 March 1998, and elected to utilise a seven month retention period in which to seek alternative employment. At the conclusion of the retention period, extended to 8 January 1999 due to periods of approved sick leave, the applicant was retired by DEWRSB (responsibility for the former CES staff having passed from DEETYA to DEWRSB), with effect from that date. The applicant applied to the AIRC, pursuant to s.170CE of the Workplace Relations Act 1999, for relief in respect of that termination on the grounds that the termination was harsh, unjust or unreasonable.
Background
3. In his examination of whether the applicant's termination was harsh, unjust or unreasonable, Watson SDP first noted the background to the case, including that the applicant had elected to be referred to the APS Labour Market Adjustment Program (APSLMAP) for assistance in redeployment.
4. Watson SDP found that the applicant was advised in a letter dated 8 December 1998 from the DEWRSB Delegate that her retirement would take effect at the expiration of 8 January 1999. The letter included advice that the Public Service Commissioner was satisfied that it was not in the interests of the Service to transfer the applicant under section 51 of the Public Service Act 1922 (the PS Act). This advice was based on a letter from the PSMPC dated 8 November 1998 in which it was decided that retirement notices would not be issued to some other excess officers on the basis of their intention to apply for certain positions. The letter stated in relation to the applicant that, having considered (unspecified) relevant information, it would not be in the interests of the efficient administration of the Service to transfer the applicant to another Department.
5. In early December 1998 the applicant applied for several ASO4 positions in DIMA. The applicant's APSLMAP Adviser wrote to DIMA on the applicant's behalf, seeking early attention to the applicant's application and stating, inter alia:
"Should any uncertainty exist over [the applicant's] ability to perform the requirements of the position, either now or after a reasonable period of adjustment, consideration should be given to arranging a work trial to allow a better assessment of the prospects for satisfying the requirements of the position."
6. Applications for the DIMA position closed on 10 December 1998 and, in view of the applicant's status as an excess officer, an interview was conducted on 17 December 1998. The interview panel assessed the applicant favourably against each of the selection criteria. It recommended that the applicant be transferred to DIMA without the need for a work trial.
7. This recommendation was rejected by the DIMA Delegate. The DIMA Delegate was, however, prepared to consider the applicant's suitability on the basis of a demonstrated capacity to undertake the duties in DIMA through a work trial. Discussions between DIMA and DEWRSB about a work trial subsequently occurred. The discussions did not resolve the issue and, on 8 January 1999, the applicant was advised that the trial would not proceed and the retirement would have effect.
8. The decision to proceed with the retirement was made on the advice of a member of the Workplace Relations Team in DEWRSB who, in a minute dated 11 January 1999, noted:
"The reason for my advice was that there is no capacity to extend an employee's retention period other than by periods of specified leave or where suitable alternative employment has been found. By its nature, a trial placement does not constitute suitable alternative employment. Had DIMA made an offer of permanent placement, my advice concerning [the applicant's] retirement would have been different."
9. Watson SDP noted the giver of this advice was not aware of the content of the report of the DIMA interview panel, which had rated the applicant suitable for transfer without the need for a work trial. The advice was also given on the basis that APSLMAP had no objections to the retirement of the applicant. It was also reflected in a letter of 26 February 1999 from DEWRSB to the applicant in relation to her complaint. The letter read:
"The purpose of the retention period is to enable excess employees to secure either permanent placement within the APS or other suitable employment and the department is fully committed to this objective. However, the Department of Immigration and Multicultural Affairs (DIMA) was not prepared to offer you a permanent placement. I also note that there does not appear to have been a formal offer of a work trial by DIMA, but even had there been, a work trial with no clear commitment to permanent placement at the end of the trial was not a viable option, given the imminent expiry of your retention period. I understand that the local office of the APS Labour Market Adjustment Program supported this view."
Issues
10. The first argument dealt with by Watson SDP concerned a jurisdictional argument that the termination of the applicant's employment was not at the initiative of the employer but resulted from the operation of the PS Act and the DEETYA Network Certified Agreement 1998 (the Agreement). These contentions were rejected on the basis that the declaration of the applicant as an excess officer, the giving of notice of a retirement date and the decision to give effect to the termination at the time of the retirement date were actions and decisions of the employer which caused the provisions of the PS Act and the Agreement to have effect.
11. In his consideration of whether the termination of the applicant's employment by DEWRSB was harsh, unjust or unreasonable, Watson SDP made a number of findings in relation to arguments put forward by both DEWRSB and the applicant, summarised as follows:
- Although in hindsight both the applicant and the APSLMAP Adviser might have done some things better, Watson SDP was not satisfied that either of them could be found not to have met their responsibilities under Clause 18.10 of the Agreement, which outlines the obligations of both the Department and the excess employee during the retention period.
- The termination was not harsh, unjust or unreasonable because of the decision of the Delegate in DIMA to require a trial by the applicant against the recommendation of the interview panel. Watson SDP was not satisfied that the decision by the DIMA Delegate was unreasonable, and concluded that the DIMA Delegate had the authority to make the decision that was made and did not act inappropriately in doing so.
- Watson SDP accepted the general proposition that the redeployment process applied in relation to the applicant was reasonable and fair, with the exception of the final decision on 8 January to give effect to the applicant's retirement and to deny her the opportunity of a job trial with DIMA.
- DIMA was prepared to make a formal offer of a job trial to the applicant, and its failure to do so was because of the advice from DEWRSB that an offer would not have any purpose because it was not prepared to extend the applicant's employment period to accommodate such a trial.
- DEWRSB applied the approach, adopted as a matter of practice, not to extend the retirement date of the applicant in the absence of a formal offer of a permanent position. The application of this approach failed to have proper regard to the specific circumstances of the applicant's case and failed to properly apply the considerations of s.76W of the PS Act by applying a rigid approach as a matter of practice rather than assessing whether an extension of the retention period, to allow the DIMA trial, was in the interests of the efficient administration of the Service.
- Exceptions had been made to the "formal job offer" criterion in relation to other excess officers in the pool of excess CES officers in situations which involved no greater certainty of continuing employment than in the applicant's case.
- The retention period could have been extended for the trial period with it being made clear that, in the absence of an offer of a permanent position arising from the trial, the retirement would have effect at the end of the trial.
- While there was no evidence before the Commission as to the nature of the consideration of the applicant's circumstances by the PSMPC, Watson SDP thought it reasonable to infer that the decision of the PSMPC would have reflected the approach normally applied in the absence of an offer of ongoing employment. He found that this approach resulted in unfairness and harshness to the applicant and had the result of bringing about the termination of her employment in circumstances where the DIMA work trial offered a significant prospect of ongoing employment. In these circumstances, Watson SDP found that there was no valid reason for the termination on 8 January 1999.
12. Watson SDP was satisfied that the termination was harsh, unjust and unreasonable, and that an order for a remedy should be made. An order was subsequently made that DEWRSB:
- appoint the applicant to a position on terms and conditions no less favourable than those on which she was employed immediately before the termination of her employment;
- maintain the continuity of the applicant's employment; and
- pay to the applicant the amount of $16,000 as compensation in respect of lost earnings.
Implications of decision
13. Given concern expressed by DEWRSB that a decision in this matter would have general implications for the APS, Watson SDP made it clear that the matter was determined by reference to the specific circumstances of the case. He said that the decision was made by reference only to the circumstances of the case and could not be seen to have broader implications or application.
