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Last updated: 19 February 1998
Circular 1998/1: Workplace Relations Act 1996 - Impact on APS termination of employment requirements
Please note: This document is for reference purposes only and is no longer considered by the APS Commission to be current. It may contain good practice advice and/or advice on the transitional arrangements between the 1922 and 1999 Public Service Acts.
Purpose
The purpose of this circular is to inform agencies of new advice from the Attorney-General's Department on amounts to be included in payment instead of notice of termination under section 170CM of the Workplace Relations Act 1996.
2. Following two decisions by judicial registrars of the Industrial Relations Court of Australia, the Attorney-General's Department has reviewed advice given in 1994 on the operation of subsection 170DB(4) of the Industrial Relations Act 1988. Subsection 170CM(4) of the Workplace Relations Act 1996 is in identical terms to those used in subsection 170DB(4) of the Industrial Relations Act 1988.
Payment instead of notice of termination
3. In October 1994 the Attorney-General's Department advised that agencies are required to include in the amount of compensation payable under subsection 170DB(4):
- ordinary wages;
- anticipated overtime or shift allowances;
- other allowances, such as senior officer allowance, clothing and site allowances;
- payments on account of accrued annual leave;
- payments on account of pro rata annual leave;
- payments on account of long service leave; and
- the amount of the employer's superannuation contributions.
4. Agencies were advised of this in Circular No. 1995/12 of 31 May 1995 titled "Industrial Relations Act 1988 - Impact on APS Termination of Employment Procedures".
5. The Attorney-General's Department has advised that the October 1994 advice is now not correct given the following decisions:
- Kenney v Loveland (Ritter JR, decision #960026)
In Kenney v Loveland, Judicial Registrar Ritter ruled that annual leave, long service leave and superannuation contributions are not contemplated by subsection 170DB(4) of the Industrial Relations Act 1988 and that amounts on account of these matters would not form part of the amount to be paid under that provision. - Hammond v Moore Business Systems Australia Ltd (Murphy JR, decision #950451)
In Hammond v Moore Business Systems Australia Ltd Judicial Registrar Murphy ruled that subsection 170DB(4) requires "payment of amounts which would have been paid and only those amounts over the notice period". He went on to say that "annual leave, long service leave and superannuation contributions are not contemplated by these provisions".
6. The Attorney-General's Department has now advised that payments instead of notice should only include payments that are typically in an employee's weekly, fortnightly or monthly pay packet. Essentially, this means wages or salary, overtime and shift allowances, and other allowances. It would not include accrual entitlements such as payments on account of pro rata annual leave, long service leave or employer's superannuation contributions that would have accrued had the person remained as an employee during the relevant notice period.
7. Based on the latest advise from the Attorney-General's Department agencies are required to include in the amount of compensation payable under subsection 170CM(4) of the Workplace Relations Act 1996:
- ordinary wages;
- anticipated overtime or shift allowances;
- other allowances, such as senior officer allowance, clothing and site allowances.
Implementation
8. Implementation of the revised arrangements should occur without delay. Agencies may wish to:
- carefully consider the application of the changes in cases where a person has accepted an offer of voluntary redundancy on the basis of specific financial information from the agency that pro rata payments for annual leave, long service leave and employer's superannuation contributions would be included in the amount of compensation; or
- seek specific legal advice on their obligations.
Further information
9. Enquires in relation to the issues raised in this circular should be directed to the PSMPC hotline on (02) 6202 3859.
Peter Miller
Structural Change Team Leader
February 1998
