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Archive: Circular 2000/4 : Resignation and failure to return to duty

The purpose of this circular is to provide advice on resignation from the Australian Public Service (APS) under the Public Service Act 1999 (the Public Service Act), particularly in relation to reasonable notice on resignation, the sanctions to apply should reasonable notice not be given, and the withdrawal of a notice of resignation. The legal effect of a failure to return to duty is also covered in this circular.

Resignation

2. Resignation under the Public Service Act is different from resignation under the Public Service Act 1922 (the old PS Act). Under the old PS Act, officers and employees did not have a unilateral right to resign from the APS-in most cases, a resignation was only effective if accepted by the relevant Agency. This was so for a variety of reasons including that, for officers, their employment was based on service in an office under the Crown.

3. Under the new framework, the common law applies to the resignation of persons engaged as both ongoing and non-ongoing employees under the Public Service Act, but the effect on each category of employee is different. An ongoing APS employee has a unilateral right of resignation from the APS, on giving reasonable notice. The resignation takes effect in accordance with its terms and does not require acceptance by the relevant employing authority before it can take effect. A non-ongoing APS employee engaged for duties that are irregular or intermittent is covered by the same rules. However, a non-ongoing APS employee engaged for a specified term or for the duration of a specified task does not, in the absence of an express provision, have a unilateral right to terminate his or her employment before the end of the specified period of engagement or prior to the completion of the specified task for which he or she was engaged.

4. If an Agency wishes to make express provision governing resignation in relation to its ongoing employees, it could seek to include provisions in future certified agreements and Australian Workplace Agreements (AWAs):

  • requiring that any employee give a reasonable minimum period of notice, which could be specified in the agreement, or else pay a reasonable amount specified in the agreement in lieu of giving the required period of notice;
  • authorising the Agency to withhold the specified amount in lieu of notice from any final monies due to the employee; and
  • allowing the Agency, at its discretion, to agree to a shorter period of notice, or to waive the requirement to give notice or make a payment in lieu of notice, for example, where there are compassionate grounds, or where the employee is already absent on long term leave.

5. In the case of non-ongoing employees engaged for a specified term or for the duration of a specified task, an Agency may provide a right of resignation, and specify the conditions which are to apply to that resignation, in a certified agreement, AWA or in the terms and conditions of their employment.

6. Whether an Agency makes express provision for the resignation of a non-ongoing employee engaged for a specified term or for the duration of a specified task will depend on the circumstances of the particular engagement. On the one hand, an Agency may decide to include a provision in its certified agreement to give a non-ongoing employee a unilateral right to resign (without the consent of the Agency) subject only to the employee giving a specified period of notice, making a payment in lieu or having such a payment deducted from their final payments where the employee has skills that can readily be replaced at short notice. On the other hand, where an employee has specialised or hard to replace skills that are crucial to a particular project, an Agency may decide to limit any right to resign to a narrower range of circumstances and require a longer period of notice or more significant compensation, and this can be best done in an AWA or in the specific terms and conditions of their employment.

7. An APS employee has no unilateral right to withdraw a notice of resignation given to their Agency even where the period specified in the notice has not expired. An exception to this general principle is when an employee is acting under some form of incapacity, for example, in some circumstances where the employee is in a highly emotional state, the employee is suffering from a severe mental illness or the deed of resigning was not the intended act of the person.

8. More detailed information on resignation is provided in the attachment to this circular (see below).

Failure to return to duty

9. Failure by an employee, without permission or reasonable excuse, to return to work and therefore to perform the duties for which they are employed does not amount to resignation at common law. In other words, the breach of the contract of employment by the employee does not unilaterally terminate the contract even where it consists of a failure to perform any of the obligations of an employee. In situations where an employee fails to return to work, the employer cannot simply regard the employment as having been terminated by the employee, but must take action under paragraph 29(3)(c) of the Public Service Act to terminate the employment.

10. The termination of employment provisions of the Workplace Relations Act 1996 would apply to a termination of employment in these circumstances and steps must be taken to ensure the termination is not harsh, unjust or unreasonable. Therefore, measures appropriate to the circumstances should be undertaken before the termination is carried out, such as attempting to ascertain the reasons for the employee's failure to return to work, and giving the employee a warning of the consequences of not resuming their duties and a reasonable opportunity to explain their continued absence or return to duty.

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

24 November 2000

Attachment - resignation

Introduction

Resignation under the Public Service Act 1999 (the Public Service Act) is different in some respects from resignation under the Public Service Act 1922 (the old PS Act). Under the old PS Act, officers and employees did not have a unilateral right to resign from the Australian Public Service (APS) - in most cases, a resignation was only effective if accepted by the relevant agency.

2. The common law position now applies to the resignation of all APS employees, whether ongoing or non-ongoing. At common law, an employee, other than a person engaged for a specified term or task, has a unilateral right of resignation. A person engaged for a specific term or the duration of a specified task cannot resign prior to the expiration of the period of engagement, or prior to the completion of the task for which he or she is engaged, unless this is expressly provided for under the terms of their engagement or agreed to by the employer.

Ongoing employees

3. For ongoing employees, the common law position now applies because the employment relationship under the Public Service Act is consistent with the relationship being more like that of an ordinary contract of employment. This is so even though the relationship between an APS employee and the Commonwealth is based on a statutory framework and subject to statutory qualifications. There is nothing in the Public Service Act, the Regulations or any other legislation that would displace the common law position in relation to resignation.

4. In accordance with common law principles, the employment relationship of an ongoing APS employee is (in the absence of an alternative stipulation) terminable by that employee on giving reasonable notice. The resignation does not require acceptance by the relevant employing authority prior to it taking effect.

Reasonable notice

5. In the absence of any specified period of notice, the length of notice of resignation that is appropriate would depend upon what is reasonable in the circumstances of each case. Relevant considerations could include the length of time that the employee has been employed, industry custom and practice or, of particular relevance to the APS, the classification and importance of the role, rate of remuneration, the degree of specialisation and the difficulty of the duties.

6. It is suggested, as a guide, that a period of two or three weeks might be a reasonable period of notice for junior staff, and perhaps four or five weeks for senior staff, such as Executive Level and SES employees.

Making express provision for resignation by ongoing employees

7. In view of the uncertainty as to what constitutes reasonable notice, agencies may wish to consider specifying the required period of notice in their certified agreements and AWAs. The effect of such a provision would be that ongoing APS employees, who have a unilateral right to resign, would be required to resign in accordance with the provision of the relevant certified agreement or AWA. Such a provision could provide for all employees to provide a particular period of notice, for example, four weeks or, alternatively, different periods of notice could be specified for different categories of employees. Employees at more senior levels or with specialist skills might be required to give more notice than those at more junior levels, consistent with the greater difficulty that an employer may face in replacing senior employees.

8. Certified agreements and AWAs have effect under the provisions of the Workplace Relations Act 1996 (the WR Act). Where there is a failure to comply with the terms of a certified agreement or AWA the WR Act contains provisions for dealing with such breaches.

9. While a provision governing resignation of APS employees could be specified in a determination under section 24 of the Public Service Act, it may be more difficult to enforce such a provision. For example, if an employee resigned without giving the specified period of notice, the employee would be in breach of the code of conduct in that, under subsection 13(4) of the Public Service Act, the employee did not comply with all applicable Australian laws. The consequence of such a breach is that disciplinary action could be taken against the employee. If, however, the employee had already left APS employment then this would be ineffective in enforcing the terms of the determination.

10. Agencies will be aware, however, that it is Government policy that terms and conditions of employment should be established through agreements under the WR Act and that the determination making power under section 24 of the Public Service Act should be used sparingly and not as a substitute for agreement-making or for varying existing agreements.

Sanctions

11. In the absence of any specific provision, it would not be open to an Agency to withhold final monies to cover any losses sustained in replacing an ongoing APS employee who resigns without giving reasonable notice. While it would still be possible for an Agency to take action for breach of contract to recover the losses it had suffered, it might be difficult to quantify those losses and to show that, in all the circumstances, the length of the notice given was not reasonable. To overcome this difficulty, a specific provision could be included in a certified agreement or AWA to authorise the withholding of a specified amount, or the making of a payment by the employee to the Agency in lieu of giving notice. The specified amount that could be withheld or paid to the Agency would need to be reasonable and could be linked to the period not worked or a specific amount of salary.

12. There may be circumstances in which an Agency Head might consider that the employee's failure to give the required period of notice was justifiable. To cover this situation, a certified agreement or AWA should allow the Agency Head to waive the requirement for notice or the forfeiture of salary to take account of the particular circumstances.

Non-ongoing employees

13. The common law position that applies to the resignation of non-ongoing APS employees engaged for a specified term or for the duration of a specified task is that such employees would not, in the absence of an express provision, have a unilateral right to terminate their employment before the end of the specified period of their engagement or prior to the completion of the specified task for which they had been engaged. Such contracts, however, may be terminated at any time with the agreement of both the employer and the employee. In the absence of that agreement, a termination by the employee would constitute a breach of contract.

14. Advice on early termination by the employer of the engagement of a non-ongoing APS employee engaged for a specified term or for the duration of a specified task is provided in Public Service Act 1999 Advice Number 7, Engagement of non-ongoing employees (non-SES). That advice provides guidance on compensation provisions which could form the basis of an agreement with a non-ongoing employee about the arrangements to apply if the engagement of the employee is to be terminated early by the employer for a reason relating to the operational requirements of the employer.

15. Employees who are engaged for duties that are irregular or intermittent under paragraph 22(2)(c) of the Public Service Act are in a different position to other non-ongoing employees because there is generally no specified term or task at the end of which the contract of employment will end. Their employment is more analogous to that of "casual" employees.

16. At common law, casual employees have a unilateral right of resignation, on giving reasonable notice. How this can be applied to irregular or intermittent APS employees will depend on the circumstances of each engagement. For example, the engagement may be for a period of one or two days or for duties extending over a longer period, and what is reasonable notice will reflect the circumstances of each engagement.

Making express provision for resignation by non-ongoing employees

17. An express provision allowing non-ongoing APS employees engaged for a specified term or for the duration of a specified task to resign may be included in certified agreements or AWAs or in the terms and conditions of their employment. The provision could also expressly provide for non-ongoing employees to give a specified period of notice on resignation.

18. The period of notice of resignation required by employees engaged for irregular or intermittent duties may also be included in certified agreements or AWAs or in the terms and conditions of their employment.

Sanctions

19. In the absence of an express provision, it would not be open to an Agency to withhold final monies to cover any losses sustained in replacing a non-ongoing employee engaged for a specified term or the duration of a specified task who purported to resign, in breach of their contract, prior to the end of their engagement, or who resigned without giving the required period of notice specified in a certified agreement or AWA or in the terms and conditions of their employment. As with ongoing employees, it is possible for an Agency to take action for breach of contract to recover the losses it has suffered, but the difficulties noted above in seeking to quantify the losses would also apply here.

20. Accordingly, agencies are encouraged to specify in a certified agreement or AWA, or in the terms and conditions of the person's employment, the provisions to apply to withholding payment in lieu of notice if they wish to be able to exercise this right. The provision could allow for the Agency to withhold a specified amount from any final monies payable to an employee, or for the employee to make a payment to the Agency in lieu of giving notice.

21. The choice of whether to include the provision in a certified agreement, AWA or the terms and conditions of employment may depend on the circumstances of the particular engagement. While a provision in a certified agreement giving non-ongoing employees a unilateral right to resign subject only to giving a specified period of notice or making a payment in lieu of notice could be used to cover the majority of non-ongoing employees, there may be occasions where, because of the nature of the duties being undertaken, or the particular skills of the employee, an Agency may require a longer period of notice or a more significant penalty. In these circumstances, the required provision could be included in an AWA or in the terms and conditions of employment.

22. A similar provision could also allow the Agency to withhold a specified amount from any final monies payable to an employee engaged for duties that are irregular or intermittent where the employee resigns without giving the required period of notice.

23. As with ongoing employees, a provision in relation to resignation for non-ongoing employees may allow the Agency Head to waive the requirement for a non-ongoing employee to give notice or to forfeit salary in particular circumstances.

Withdrawal of resignation

24. Except in the specific circumstance of incapacity discussed below, an ongoing APS employee has no unilateral right to withdraw a notice of resignation which has been given to their Agency, even where the period specified in the notice has not expired. A notice of resignation may only be withdrawn with the explicit agreement of the Agency Head.

25. Likewise, a non-ongoing employee who has a right to resign in accordance with an express resignation provision also has no unilateral right to withdraw a notice of resignation which had been given to the employer.

Capacity

26. An exception to the general position on withdrawal of a notice of resignation is where the employee is acting under some form of incapacity. The issues which were relevant under the old PS Act remain relevant under the Public Service Act. While these issues are discussed below, legal advice should be sought should a situation involving the issue of incapacity arise.

27. One type of incapacity relates to the situation where an employee in a highly emotional state gives a notice of resignation. In such a case it might be possible for the employee to retract the notice of resignation upon recovery from the emotional state. However, the decision of the Federal Court in Birrell v Australian National Airlines Commission (1984) 5 FCR 447 indicates that the exception is narrowly confined so that it will only apply if the notice is retracted as soon as the employee recovers from the emotional condition. The same reasoning would apply where a notice of resignation is extracted from an employee under unreasonable pressure, that is, where elements of duress may be present.

28. Incapacity issues also arise where an employee is suffering from a severe mental illness. The necessary degree of mental incapacity was considered in the High Court in Gibbons v Wright (1954) 91 CLR 423. In that decision it was held that if a resignation was tendered at a time when the employee did not have the mental capacity to understand the nature of his or her action, the resignation is voidable at the option of the employee or his or her representative. It is a valid resignation unless and until so voided.

29. Connected to this ground of incapacity is the ground of non est factum, that is, that the deed was not that of the person. This defence is available in limited circumstances, for example where a person is unable to read owing to blindness or a lack of literacy and must rely on others for advice as to what they are signing, or where a person is unable to have any understanding of the purport of a particular document. To make out the defence, an employee would have to show that he or she signed the document in the belief it was radically different from what it was in fact, that is that they did not know they were tendering their resignation, and that the employee's failure to read and understand the document was not due to carelessness on their part.

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