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Last updated: 26 November 1999
Public Service Act 1999 Advice No. 9: Termination of employment
Introduction
This advice is one of a series of advices to be issued by the Public Service and Merit Protection Commission (PSMPC) concerning the Public Service Act 1999 (the new PS Act) and the Public Employment (Consequential and Transitional) Amendment Act 1999 (the PECTA Act). It is proposed that the new legislation will come into operation on 5 December 1999 and the information contained in this advice will take effect on commencement of the legislation.
2 This advice provides general information about termination of employment issues. It should be read in conjunction with specific advices on;
- Breaches of the Code of Conduct, (Advice No.5);
- Staffing Actions: Non-ongoing employees (Advice No.7);
- SES Employment Arrangements (Advice No.8);
- Non-performance of Duties (Advice No.10);
- Managing Underperformance (Advice No.11); and
- Excess Employees (Advice No 12).
3 A key message for agencies is the need to alert their managers to the fact that, while there is less prescription in the new PS Act in relation to processes, termination decisions are subject to remedies under the WR Act and potentially the common law Ü as they are now. Managers do not need to become expert in these issues, but they do need access to good advice and to be able to recognise when they might need to seek it. Some simple Plain English guidance on preventing unfair dismissal claims is contained in the DEWRSB publication 'Hiring or Firing, Are you complying?'. See http://www.wagenet.gov.au/publications.html for an order form.
Key legislative references
4 Section 29 of the new PS Act provides the head of power to terminate the employment of both Senior Executive Service (SES) and non-SES employees. The new PS Act does not, however, prescribe in detail the processes for termination of employment.
5 Subsection 29(1) provides that an Agency Head may at any time, by notice in writing, terminate the employment of an APS employee in the Agency. A note to s. 29 makes it clear that the new PS Act is intended to operate side by side with the termination of employment provisions of the Workplace Relations Act 1996 (the WR Act).
6 Subsection 29(3) spells out the only grounds on which the employment of an ongoing APS employee may be terminated. Those grounds are as follows:
- the employee is excess to the requirements of the Agency;
- the employee lacks, or has lost, an essential qualification for performing his or her duties;
- non-performance, or unsatisfactory performance, of duties;
- inability to perform duties because of physical or mental incapacity;
- failure to satisfactorily complete an entry-level training course;
- failure to meet a condition imposed under subsection 22(6);
- breach of the Code of Conduct;
- any other ground prescribed by the regulations.
7 Under s. 29(2), the notice of termination of employment must specify the ground or grounds that are relied on for the termination of the employment of an ongoing APS employee.
8 Subsection 29(4) provides that the Public Service Regulations may prescribe grounds or procedures applicable to the termination of the employment of a non-ongoing employee (i.e. an employee engaged for a specified term or the duration of a specified task, or for duties that are irregular or intermittent). Subsection 29(5) provides that s. 29(4) does not, by implication, limit the grounds for termination of the employment of non-ongoing APS employees. This provision is relevant where the regulations made under s. 29(4) do not seek to specify exhaustively the permissible grounds for the termination of employment of a non-ongoing APS employee.
9 The regulations to be made under s. 29(4) will provide that:
- any procedures set out in an award, certified agreement or AWA that apply to the termination of employment of a non-ongoing APS employee will apply to such a termination; and
- the engagement of a non-ongoing APS employee may only be terminated on the grounds of a breach of the Code of Conduct in accordance with procedures established by an Agency Head under s. 15(3) of the new PS Act.
10 The Public Service Regulations will also provide that an Agency Head must notify the termination of employment of all ongoing employees in the Gazette.
11 Where a certified agreement or AWA sets out agreed processes for managing underperformance, redundancy, or provisions relating to compensation for early termination of employment of a fixed term engagement, then an Agency will need to follow those processes when exercising the power to terminate the employment of an employee.
Appeals
12 There is no right of appeal or review under the new PS Act or the regulations concerning a decision to terminate the engagement of an APS employee. For some years the APS has been subject to the same termination of employment provisions as the rest of the community under the WR Act. Certain APS employees may apply to the Australian Industrial Relations Commission (AIRC) for relief in respect of their termination of employment. Further details on the operation of the WR Act are set out below. SES termination of employment arrangements
13 As noted above, s. 29(1) of the new PS Act provides the power for an Agency Head to terminate the employment of any APS employee, including an SES employee, on any of the grounds set out in s. 29(3). There are specific provisions, however, that relate to the termination of SES employees:
- s. 36 provides that the Public Service Commissioner must issue directions in writing about a range of employment matters relating to SES employees, including termination of employment; and
- s. 38 provides that an Agency Head cannot terminate the employment of an SES employee unless the Public Service Commissioner has issued a certificate stating that all requirements of the Commissioner's Directions have been satisfied in respect of the proposed termination of employment and that the Commissioner is of the opinion that the termination of employment is in the public interest.
14 The minimum requirements to be specified in the Commissioner's Directions will provide that:
- there must be an assessment, having due regard to procedural fairness, that the termination of employment is justified on one or more of the grounds mentioned in s. 29(3); and
- an SES employee must be given full information about other employment in the Agency that the Agency Head, having regard to the assessment mentioned above, considers could be made available to the employee.
15 A decision by an SES employee to retire as a consequence of a notice given by an Agency Head under s. 37(1) does not constitute a termination of employment by an Agency Head for the purposes of the termination of employment provisions of the new PS Act.
16 Further details on the operation of termination of employment arrangements for SES employees, and on the incentive to retire provisions, is included in separate advice on SES Employment Arrangements.
Relationship with Workplace Relations Act 1996
17 Division 3 of Part VIA of the WR Act deals with termination of employment and in particular:
- the requirements for notice of termination of employment;
- the need to give employees the opportunity to respond to allegations made against them about conduct or performance;
- the responsibility of employers to notify Centrelink in certain termination of employment cases;
- the principle that termination of employment shall not be harsh, unjust or unreasonable;
- the grounds on which an employer shall not terminate employment;
- the rights of an employee whose employment has been terminated to apply to the AIRC for relief in respect of the termination; and
- the remedies available to the AIRC in respect of unlawful termination of employment, including reinstatement and compensation for lost remuneration.
18 Accordingly, subject to the exclusions from coverage set out in the regulations made under the WR Act (see details below), the termination of employment of an APS employee will be subject to the WR Act.
19 In general terms this means that those APS employees covered by the termination of employment provisions of the WR Act:
- are entitled to specified periods of notice;
- are protected against dismissal on discriminatory grounds; and
- may apply to the AIRC for review of a termination of employment on the basis that it is harsh, unjust or unreasonable, with the possibility of reinstatement or compensation if the application is successful.
20 The WR Act also provides that it is not lawful to terminate employment on any of the grounds set out in s. 170CK of the WR Act, except as allowed by that section in the case of an inherent requirement of the job - see Attachment A for a listing of these grounds.
Exclusions from coverage of the WR Act
21 Section 170CC of the WR Act provides that regulations made under that Act may exclude certain classes of employees from specified parts of the termination of employment provisions. The classes of employees that may be excluded include: employees serving a period of probation or a qualifying period; and employees engaged under a contract of employment for a specified period of time or a specified task; and employees engaged on a casual basis for a short period.
Probationers
22 Paragraph 30B(1)(c) of the Workplace Relations Regulations provides that an employee serving a period of probation, or a qualifying period of employment, is excluded from the termination of employment provisions of the WR Act if the duration of the period, or the maximum duration of the period, as the case may be, is known in advance and is three months or less or, if more than 3 months, is reasonable having regard to the nature and circumstances of the employment.
23 Subsection 22(6) of the new PS Act enables the engagement of an APS employee to be subject to conditions, including conditions relating to probation, citizenship, formal qualifications, security and character clearances and health clearances. These conditions must be notified to the employee.
24 Paragraph 29(3)(f) of the new PS Act enables the termination of employment of an ongoing employee on the grounds that the employee has failed to meet such a condition Ü for example, where the employee failed to obtain a health or security clearance that had been a condition of employment.
25 Because termination on this basis is expressly provided for in the new Act, such a termination will not, on this ground alone, be harsh, unjust or unreasonable or unlawful for the purposes of the WR Act. (It will, however, be important to follow due process in terminating an employee for such a reason - for example, to give an employee the opportunity to respond to any reason related to their capacity or conduct).
Non-ongoing APS employees
26 Some preliminary guidance on the likely effect of the termination of employment provisions of the WR Act and the common law of employment to a non-ongoing APS employee is set out below. The law on termination of employment in this area is dynamic, and the position may vary depending on the facts of the case. This advice is not definitive and is subject to refinement in the light of later legal advice and case law.
Application of probation and conditions of engagement to non-ongoing employees
27 A significant change under the new PS Act is that it will be possible to impose conditions of an engagement under s. 22, such as probation, health, security and character clearances and formal qualifications, in relation to non-ongoing employees.
Termination of a non-ongoing employee during a specified term or before the completion of a specified task
28 As noted in paragraph 8 above, a regulation will be made under s. 29(4) of the PS Act setting out procedures that apply to the termination of the engagement of a non-ongoing APS employee. The regulation will require that any applicable procedures in an award, certified agreement or AWA must be followed. In addition, an engagement can be terminated on the grounds of a breach of the Code of Conduct only in accordance with the procedures established by an Agency Head under s. 15.
29 Because s. 29(3) enables termination of employment 'at any time', the case law on the WR Act provisions makes it clear that termination of an engagement before the expiry of a specified term or task is subject to the termination provisions of the WR Act Ü unless the employee is serving a period of probation of 3 months or less or such longer period than 3 months that is reasonable, having regard to the nature and circumstances of the employment. That is, a non-ongoing APS employee may obtain remedies under the WR Act if his or her engagement is terminated early on a basis that is found to be harsh, unjust, unreasonable or unlawful. This would include a case where an engagement is terminated early with a termination payment that the AIRC does not regard as reasonable in the circumstances.
30 In addition, under the common law of employment, if an employer ends a fixed term contract of employment prematurely other than on a ground justifying instant dismissal, the employer may be liable to pay damages in relation to the balance of the term (subject to the normal rules about mitigation of damage).
31 To avoid uncertainty for both parties, it may be desirable, when recruiting an employee for a specified term or the duration of a specified task, of any significant duration, to agree at the time of engagement on the arrangements that would apply if the engagement were terminated early by the Agency for a reason relating to the operational requirements of the employer. An example of this would be because the work is no longer required to be performed as a result of a change in government policy. Attachment B sets out a possible approach to the compensation arrangements that might apply if the engagement of an employee is to be terminated early.
32 Such an agreement could be included as a condition of engagement under s. 22 or in an AWA or certified agreement. This may not always avoid liability, however, if the agreed amount is not found by the courts or the AIRC to be a reasonable payment for the damages.
Termination at the end of a specified term or on completion of a specified task
33 Where an employee is engaged for a specified term or for the duration of a specified task their employment will automatically expire at the end of that specified period (unless extended) or specified task. It is therefore not termination by the Agency Head or 'by the employer' and the requirements of s. 29 relating to notice and the unfair termination provisions of the WR Act do not apply.
34 There may, however, be cases where the courts or the AIRC may find that the engagement was not genuinely 'for a specified term', for example if there were several back to back specified term engagements to do the same duties. In addition, the WR Regulation 30B(2) provides that there is no exclusion from coverage if the main purpose of the engagement under a contract of that kind is, or was at the time of engagement, to avoid coverage by the WR Act termination provisions.
Termination of irregular or intermittent employees
35 The regulation to be made under s 29(4) of the PS Act setting out procedures that apply to the termination of the engagement of a non-ongoing APS employee will also apply to the termination by the Agency Head of the employment of an irregular or intermittent employee.
36 Whether an irregular or intermittent employee is covered by the termination of employment provisions of the WR Act will depend on whether the employee is 'a casual employee engaged for a short period' within the meaning of WR Regulation 30B(3).
37 Where an employee is engaged for a short period, e.g. a day at a time, that particular engagement expires automatically at the end of that period, and so there is no requirement to give notice of termination of that specific engagement.
38 There may be cases, however, where an Agency wishes to set up a pool of people to provide relief staffing as needed. Depending on the facts, such people may be held to have a continuing employment relationship, e.g. for purposes such as accrual of long service leave. There will also be obligations under the APS Values to treat such persons fairly. As the legal analysis of such situations depends very much on the facts of each case, agencies may wish to seek advice when setting up such arrangements.
Transitional arrangements
39 Division 8C of the old PS Act dealt with the redeployment and retirement of non-SES officers. Regulations made under the PECTA Act will establish the following transitional arrangements:
- where an instrument of retirement had been signed under s. 76W of the old Act but the retirement had not come into effect prior to 5 December 1999, the retirement will proceed under the old Act; and
- where a notice of reduction was issued under s. 76W of the old Act and the period for lodging an appeal under s. 76Z (as specified in old Public Service Regulation 120D) had not expired before 5 December 1999, or where an appeal had been lodged but not heard, the appeal process will be allowed to continue until finalised.
40 The Merit Protection Commissioner will be able to establish a Redeployment and Retirement Appeal Committee which will be able to hear these appeals until all relevant appeals have been lodged, heard and determined.
Further advice
41 Urgent enquiries from Comnet members and their senior staff should be made by E-mail to psact@apsc.gov.au or the PSMPC's Helpline on 6202 3859.
42 Advice from DEWRSB is accessible through the government employment web sites at www.dewrsb.gov.au or through the PSMPC's web site.
Jeff Lamond
Team Leader
Staffing, Structures and Performance Team
26 November 1999
Attachment A: Subsection 2 of Section 170CK of the WR Act concerning employment not to be terminated on certain grounds
(2) Except as provided by subsection (3) or (4), an employer must not terminate an employee's employment for any one or more of the following reasons, or for reasons including any one or more of the following reasons:
- temporary absence from work because of illness or injury within the meaning of the regulations;
- trade union membership or participation in trade union activities outside working hours or, with the employer's consent, during working hours;
- non-membership of a trade union;
- seeking office as, or acting or having acted in the capacity of, a representative of employees;
- the filing of a complaint, or the participation in proceedings, against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities;
- race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin;
- refusing to negotiate in connection with, make, sign, extend, vary or terminate an AWA;
- absence from work during maternity leave or other parental leave.
Attachment B: Compensation for early termination of non-ongoing employees engaged for a specific term
A CA, AWA or individual engagement advice could:
- specify that where an APS employee has been engaged for a specified term is terminated
before the expiry of the specified term because:
- the duties for which they were engaged are no longer available;
- the duties in relation to which they were engaged have been completed ahead of time; or
- a decision has been made that those duties are no longer required to be performed;
the employee will, in addition to any entitlements arising under s. 170CM of the Workplace Relations Act 1996, be entitled to compensation in respect of the period of service foregone; and
- state that the employee shall not be entitled to other damages or compensation in respect of, or arising out of, the termination:
The following formula may be appropriate in relation to a non-SES employee engaged for a specified term. An Agency will, however, need to have regard to the particular circumstances of the engagement, e.g. whether remuneration packaging applies or did the person relocated from interstate or overseas to take up the engagement.
| Period of service foregone | Compensation |
|---|---|
| Not more than 6 months | Nil |
| More that 6 months but not more than 12 months | 4 weeks salary |
| More that 12 months but not more than 18 months | 8 weeks salary |
| More than 18 months but not more than 24 months | 12 weeks salary |
| More than 24 months but not more than 30 months | 16 weeks salary |
| More that 30 months but not more than 36 months | 20 weeks salary |
