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Last updated: 29 November 2000
Circular No 2000/5 : Termination of employment under paragraph 29(3)(d) of the Public Service Act 1999-inability to perform duties because of physical or mental incapacity
Note: This document has not been updated to reflect changes that may flow from the WorkChoices legislation enacted on 27 March 2006
This Circular concerns the use of paragraph 29(3)(d) of the Public Service Act 1999 (the PS Act 1999) to terminate the employment of an APS employee because of physical or mental incapacity where the employee is not eligible for invalidity benefits under superannuation legislation.
Background - former Public Service Act
Under the Public Service Act 1922 (the PS Act 1922), an Agency Head had power to 'retire' an officer from the APS where the relevant Agency Head was satisfied that an officer was 'unable to perform his or her duties, or other duties appropriate to the officer's classification, because of physical or mental incapacity' (sections 76W(1) and 76W(6)(a) of the PS Act 1922).
Section 76WA(1) of the PS Act 1922 provided that in spite of anything contained in section 76W of that Act, an officer who was an eligible employee of the superannuation scheme established by the Superannuation Act 1976 (the 1976 Act) and who had not reached his or her maximum retiring age was not capable of being retired from office on the ground of invalidity within the meaning of Part IVA of the 1976 Act unless the relevant Board had given a certificate under section 54C of that Act. Section 76WA(2) of the PS Act 1922 provided that an officer who was a member of the superannuation scheme established under the Superannuation Act 1990 (the 1990 Act) could not be retired on the grounds of invalidity without a certificate being issued by the relevant Board under section 13 of that Act.
The inclusion of section 76WA in the PS Act 1922 reflected and drew attention to the restrictions in the Superannuation Acts. However, even before the enactment of section 76WA, sections 13 and 54C would have operated to the same extent as they did after the insertion of section 76WA. Those sections did not depend on section 76WA for their application to members of the Superannuation Schemes who were employed under the PS Act 1922. It is of no consequence that there is no provision in the PS Act 1999 that corresponds to section 76WA of the PS Act 1922.
Superannuation legislation
Section 54C of the 1976 Act provides as follows:
Eligible employee not to be retired on ground of invalidity without certificate from Board(1) In spite of anything contained in any Act, award, determination or contract of employment, an eligible employee who has not reached his or her maximum retiring age is not, after the commencement of this section, capable of being retired from the employment or office by virtue of which he or she is an eligible employee on the ground that, because of any mental or physical condition, the eligible employee is unable to perform his or her duties, unless the Board has certified in writing that, if the eligible employee is so retired, he or she will be entitled to receive benefits under Division 4 of Part V.
(2) The Board must not give a certificate in respect of an eligible employee under subsection (1) unless the Board has approved the retirement of the eligible employee on the ground of invalidity in accordance with this Part.
(3) In subsection (1), a reference to an eligible employee being retired from employment or office includes a reference to the services of the eligible employee being otherwise terminated.
Section 13 of the 1990 Act is in similar terms to section 54C of the 1976 Act.
Advice from the Australian Government Solicitor
The Australian Government Solicitor (AGS) has advised that section 54C of the 1976 Act and section 13 of the 1990 Act limit the power of an Agency Head to terminate the employment of an APS employee who is a member of the superannuation schemes established under the 1976 Act and the 1990 Act on the ground specified in paragraph 29(3)(d) of the PS Act 1999, namely inability to perform duties because of physical or mental incapacity.
The AGS has advised that the employment of an APS employee who is a member of the relevant superannuation schemes cannot be terminated on the grounds of inability to perform duties because of physical or mental incapacity unless the relevant Superannuation Board has given a certificate in writing in accordance with section 54C of the 1976 Act or section 13 of the 1990 Act.
The AGS has further advised that if paragraph 29(3)(d) is relied on as the ground for termination in a case where such a certificate has not been issued, the termination could be subject to challenge under the Administrative Decisions (Judicial Review) Act 1977 (the ADJR Act).
The AGS has also advised that where an employee is unable to perform duties because of physical or mental incapacity, attempts to terminate the employment under paragraph 29(3)(b) (employee lacks, or has lost, an essential qualification for performing duties) or paragraph 29(3)(c) (non-performance, or unsatisfactory performance, of duties) could also be vulnerable to challenge under the ADJR Act.
Inappropriate termination on the ground of physical or mental incapacity (e.g. where the relevant Superannuation Board has not certified that the employee should receive invalidity benefits) could, in certain circumstances, also be unlawful under section 170CK of the Workplace Relations Act 1996 (WR Act) or the Disability Discrimination Act 1992 (the DD Act). Agencies will need to ensure that they have had regard to the relevant provisions of the WR Act and the DD Act in terminating the employment of an APS employee.
The AGS has also advised that if a ground other than paragraph 29(3)(d) is specified as the ground for termination, but the underlying reason is the physical or mental incapacity of the employee, then there is a risk that the termination will be found to be harsh, unjust or unreasonable under the WR Act. There is also a risk that it may be unlawful under section 170CK of the WR Act or the DD Act.
The information in this circular may not be applicable in circumstances where an APS employee who is unable to perform his or her duties, or other duties appropriate to the officer's classification, because of physical or mental incapacity, is not a member of the superannuation schemes under the 1976 Act and the 1990 Act.
On the basis of the AGS advice, caution should be exercised by Agencies when considering the termination of an APS employee who is unable to perform duties because of physical or mental incapacity. It may be prudent for Agencies to obtain legal advice before proceeding with the termination.
Jenny Harrison
Team Leader
Values, Conduct and Diversity Team
November 2000
Jeff Lamond
Team Leader
Staffing, Structures and Performance Team
November 2000
