This part outlines the legislative and industrial framework relating to terminating the employment of an APS employee under section 29 of the Public Service Act 1999 (PS Act). Under the PS Act, agency heads have all the rights, duties and powers of an employer. Their decisions must, of course, comply with the requirements of the PS Act and the various instruments issued under the Act including the Public Service Regulations 1999 (PS Regulations) and the Australian Public Service Commissioner's Directions 2013 (the Directions). Employment decisions must also take account of the requirements of the Fair Work Act 2009, administrative and other Commonwealth law, and the common law of employment.
The PS Act allows an agency head to delegate to another person many of the agency head’s powers or functions under the Act. Any delegation of these powers by the agency head must be in writing. A reference in this guide to the agency head can also mean their delegate.
The PS Act is interpreted and applied by all APS agencies. It is therefore important that the Australian Public Service Commission (the Commission) be kept fully informed of current legal thinking on the interpretation of the Act so that this can inform the advice provided by the Commission to agencies. Agencies are therefore requested to liaise with the Commission when obtaining advice and forward copies of any legal advice that they obtain regarding the PS Act framework to the Commission, in line with Clause 10 of the Legal Services Directions. These should be forwarded to:
Legal Services Unit Australian Public Service Commission 16 Furzer Street PHILLIP ACT 2606
Agencies are also asked to ensure that the Commission is notified of any court or Fair Work Commission proceedings that raise interpretation of the PS Act framework. The initial point of contact for such cases is the Group Manager of the Employment Policy and Participation Group on (02) 6202 3808.
1.1 Public Service Act and subordinate legislation
Under subsection 29(1) of the PS Act, an agency head (or delegate) may, by notice in writing, terminate the employment of an APS employee in the agency. Any decision to terminate the employment of an APS employee must be consistent with the requirements of the PS Act, including the requirement to uphold the APS Values and APS Employment Principles (as set out in sections 10 and 10A of the PS Act) and the requirements set out in the Directions.
There are a range of provisions that may apply depending on the employment status of the employee and the particular reason why termination of employment is being considered.
1.1.1 Ongoing APS employees
Subsection 29(2) of the PS Act requires that, for ongoing APS employees, the notice of termination relating to the employee must specify the ground or grounds for termination, with subsection 29(3) setting out the only grounds that can be relied on for terminating the employment of an ongoing employee.
These grounds are as follows:
- the employee is excess to the requirements of the agency – see 2.3 of this guide
- the employee lacks, or has lost, an essential qualification for performing his or her duties – see 2.4
- non-performance, or unsatisfactory performance, of duties – see 2.5
- inability to perform duties because of physical or mental incapacity – see 2.6
- failure to satisfactorily complete an entry-level training course – see 2.7
- failure to meet a condition of engagement imposed under subsection 22(6) of the PS Act – see 2.8
- breach of the Code of Conduct – see 2.9
- any other ground prescribed by the Public Service Regulations – no other grounds have been prescribed as at July 2013.
A decision to terminate the employment of an ongoing APS employee where the employee has been terminated on the grounds of a breach of the Code of Conduct must be notified in the Public Service Gazette (clause 2.29 of the Directions).
Further guidance related to the termination of employment of ongoing APS employees including information on the grounds of termination available under section 29 of the PS Act is provided at Part two of this guide.
1.1.2 Non-ongoing APS employees
Where a person is engaged as a non-ongoing APS employee for a specified term, a specified task, or on an irregular or intermittent basis where there is a specified end date, the employment ceases at the end of the period or completion of the task and the person is not regarded as having their employment terminated at the initiative of the employer for the purposes of the PS Act or the FW Act.
However, where it is proposed to terminate the employment of a non-ongoing APS employee before the normal expiration of the period of engagement, certain requirements of the legislative framework are relevant.
- Subsection 29(4) of the PS Act makes provision for regulations to prescribe grounds applicable to the termination of a non-ongoing APS employee (no such grounds have been prescribed as at July 2013).
- Subsection 29(5) makes it clear that this provision does not, by implication, limit the grounds for terminating employment of a non-ongoing APS employee.
- Clause 7.2 of the Directions identifies procedures applicable to the early termination of the engagement of a non-ongoing APS employee and provides that where an employment arrangement (i.e. a fair work instrument, transitional instrument, section 24 determination or a written contract of employment) sets out procedures that apply to the termination of employment of a non-ongoing APS employee, then those procedures apply to the termination, unless they are an unlawful term, or are prohibited content, under relevant industrial legislation.
- A note to clause 7.2 of the Directions points out that where it is proposed to terminate the employment of a non-ongoing APS employee on the ground that the employee has breached the APS Code of Conduct, then the finding of breach of the Code must have been made in accordance with the agency’s procedures established under subsection 15(3) of the PS Act.
See Part three of this guide for further guidance on the termination of employment of a non-ongoing APS employee.
1.1.3 Additional requirements relating to Senior Executive Service employees
For Senior Executive Service (SES) employees, there are certain additional requirements that must be satisfied before employment can be terminated. Section 38 of the PS Act provides that an agency head cannot issue a notice of termination to an SES employee unless the Australian Public Service Commissioner (the Commissioner) has issued a certificate stating that all relevant requirements of the Directions made under subsection 11A(1) of the PS Act have been satisfied in respect of the proposed termination and that the Commissioner is of the opinion that the termination is in the public interest.
There are also specific provisions set out in section 37 of the PS Act and clause 7.3 of the Directions which give agency heads the power to offer an ongoing SES employee the opportunity to retire with an incentive. Where an SES employee retires with an incentive the employee is taken for all purposes to have been compulsorily retired from the APS.
More detailed information on SES staffing arrangements, including termination and retirement with an incentive payment, is available at The Senior Executive Service: Selection, mobility and separation.
1.1.4 Review of termination of employment decisions
There is no right of appeal or review under the PS Act or the PS Regulations in relation to a decision to terminate the employment of an ongoing or non-ongoing APS employee (apart from a right under PS Regulation 7.2 to request investigation of the former employee's separation entitlements). However, the FW Act has rules and entitlements that apply to termination of employment, including minimum periods of notice, protections against unfair dismissal and dismissal in breach of the General Protections provisions of that Act – see 1.2 below.
In addition to the remedies available under the FW Act, APS employees may also be able to apply for judicial review of termination decisions on the ground of failure to comply with the requirements of administrative law.
1.1.5 Reduction in classification
It should be noted that subsection 23(4) of the PS Act sets out a range of grounds under which an agency head may reduce an employee’s classification without the employee’s consent. The list of grounds includes a sanction for a breach of the Code of Conduct; being excess to requirements at the higher classification; lacking, or losing, an essential qualification; non-performance, or unsatisfactory performance, of duties at the higher classification; and inability to perform duties at the higher classification because of physical or mental incapacity. There is considerable overlap between these grounds and those specified in subsection 29(3) of the PS Act in relation to termination of employment. As part of the decision making process to determine whether an employee’s employment should be terminated, an agency head may wish to consider a range of options, including whether, in the particular circumstances of the case, reduction in classification may provide a more appropriate outcome than termination of employment.
1.2 Fair Work Act
The FW Act contains a number of provisions that are relevant to termination of employment, including in the General Protections and Unfair Dismissal provisions as well as notice of termination – see Appendix A of this guide for more detailed information on these provisions.
In addition, the National Employment Standards (NES), which are set out in the FW Act, establish minimum entitlements for notice of termination and redundancy pay which will apply to certain APS termination of employment decisions.
- Further information on the redundancy pay component of the NES as it applies to the termination of employment of an ongoing APS employee is set out in Part 2.3 of this guide (which deals with termination where an employee is excess to the requirements of the agency), while Part 3.4 of this guide contains information on the circumstances where a non-ongoing APS employee may be entitled to an NES redundancy payment on termination of employment.
- Note that the unlawful termination provisions of the FW Act are not relevant to APS employees as all APS employees will be covered by the General Protections provisions in Part 3-1 of the FW Act. Therefore they would not be able to bring an unlawful termination claim (see section 723 of the FW Act).
The FW Act also obliges employers to notify Centrelink and relevant unions where the employer decides to dismiss 15 or more employees for reasons of an economic, technological, structural or similar nature. This obligation will usually only arise in a redundancy situation.
Further guidance on the provisions of the FW Act setting out the obligations on employers to notify Centrelink and registered employee associations is set out at Part two of this guide (in relation to the termination of an ongoing APS employee), and Part three (in relation to the termination of a non-ongoing APS employee).
1.2.1 Payment of accrued entitlements
Under section 90 of the FW Act, where an employee’s period of employment ends and the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.
In addition, the Long Service Leave (Commonwealth Employees) Act 1976 sets out the circumstances in which employees will be entitled to payment in lieu of long service leave on termination of employment.
1.3 Other relevant Commonwealth laws
Employment decisions made under the PS Act, including termination decisions, are generally required to be made in accordance with the requirements of administrative law including the Administrative Decisions (Judicial Review) Act 1977.
Each termination decision made under the PS Act must comply with the usual requirements imposed by administrative law, including:
- natural justice is observed (sometimes referred to as 'procedural fairness')
- any requirements of law are observed
- the person making the decision is properly authorised
- there is evidence to justify the decision
- only relevant considerations are taken into account
- the decision has regard to the merits of the particular case
- the action does not otherwise constitute an abuse of the power to make the decision.
The Age Discrimination Act 2004, the Disability Discrimination Act 1992, the Racial Discrimination Act 1975 and the Sex Discrimination Act 1984 may also be relevant when considering termination action.
1.4 Industrial instruments
An agency head should have regard to the provisions of any relevant workplace arrangement (e.g. an award, an enterprise agreement, an Australian Workplace Agreement, a determination under subsection 24(1) of the PS Act or contract of employment) setting terms and conditions for agency employees which contain procedures to be followed before terminating an employee's employment under section 29 of the PS Act.
- For example, it is Government policy that APS workplace arrangements must include compulsory redeployment, reduction and retrenchment provisions for the management of excess staff. Many such instruments may also set out procedures for managing underperformance cases.
A workplace arrangement cannot override statutory obligations or remedies relating to termination of employment under the FW Act or the PS Act.
This guide does not generally deal with superannuation issues relating to termination which are the responsibility of the Department of Finance and Deregulation and ComSuper. An exception is in relation to termination under paragraph 29(3)(d) of the PS Act where there are some specific limitations set out in superannuation legislation on an agency head’s power to terminate employment in these circumstances. Further information is contained in Part 2.6 of this guide which deals with termination on the ground of inability to perform duties because of physical or mental incapacity.
 Note that the termination power can only be exercised by an agency head in relation to employees employed in his/her agency. This includes employees who normally are employed in another agency but who are currently employed in the agency head’s agency on the basis of a temporary movement agreement for a specified period made under section 26 of the PS Act, but does not include employees who normally belong to the agency but are on temporary movement to another APS agency for a specified period under a section 26 agreement.
 Note that individual agency arrangements may require consideration of reduction in classification as an alternative to termination in certain circumstances.