The main points and considerations applying to the termination of a non-ongoing Australian Public Service (APS) employee are as follows:
- 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 Fair Work Act 2009 (FW Act).
- For the purposes of this guide, termination of a non-ongoing APS employee occurs where the employee’s employment is terminated by the employer before the normal expiry date of the period of employment, or before the completion of the specified task for which the person was engaged. Early termination in these circumstances must comply with the relevant provisions of the Public Service Act 1999 (PS Act) and be consistent with the requirement to uphold the APS Values and APS Employment Principles.
- Termination of employment decisions must also comply with the relevant provisions of the FW Act, the Age Discrimination Act 2004, the Disability Discrimination Act 1992, the Racial Discrimination Act 1975 and the Sex Discrimination Act 1984, and with relevant requirements of administrative law.
3.1 Public Service Act provisions
- Termination of employment occurs under section 29 of the PS Act.
- For Senior Executive Service (SES) employees, section 38 of the PS Act provides that an agency head cannot issue a notice of termination under section 29 to an SES employee unless the Australian Public Service Commissioner has issued a certificate stating that all relevant requirements of the Australian Public Service Commissioner’s Directions 2013 (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.
- The separate incentive to retire provisions available to ongoing SES employees (section 37 of the PS Act and clause 7.3 of the Directions) are not appropriate to be applied to non-ongoing SES employees.
- Notice of termination must be in writing (subsection 29(1)).
- An agency may determine the ground(s) for such termination.
- No grounds are specified in the PS Act or in the Public Service (PS) Regulations in relation to the termination of non-ongoing employment.
- However, clause 7.2 of the Directions provides that if an employment arrangement (i.e. an enterprise agreement or other instrument setting employees’ terms and conditions of employment, including a contract of employment) sets out procedures applicable to the termination of a non-ongoing APS employee, then those procedures must be followed.
- The Note under this clause of the Directions confirms that termination of employment for a breach of the Code of Conduct may only occur where an agency head has determined a breach has occurred in accordance with the procedures established under subsection 15(3) of the PS Act.
- Note that clause 4.2 of the Directions also provides that where the conduct of an employee raises concerns that relate both to effective performance and to possible breaches of the Code of Conduct, an agency head must, before making a decision to initiate an inquiry under subsection 15(3) of the Act, have regard to any relevant standards and guidance issued by the Commissioner.
3.2 Superannuation issues
- Where an agency is considering terminating the employment of a non-ongoing employee because of a mental or physical condition that prevents the employee from performing his or her duties, and the employee is a member of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the Public Sector Superannuation accumulation plan (PSSap), the relevant superannuation authority must certify the employee to be totally and permanently incapacitated before termination can proceed (see Part 2.6.3 of this guide for relevant information).
3.3 Review of termination 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 a non-ongoing APS employee (apart from a right of complaint under PS Regulation 7.2 for a person who was formerly an employee to request an investigation of their separation entitlements). However, general principles of administrative law apply to termination decisions under section 29 of the PS Act, meaning review by the Courts (generally the Federal Court) may be available depending on the circumstances of the decision.
- In addition, a person who was employed as a non-ongoing APS employee may be able to seek relief in relation to the early termination of their APS employment in other forums, including under the provisions of the FW Act.
3.4 Fair Work Act provisions
The FW Act contains various provisions that may be relevant to the termination of employment of a non-ongoing APS employee.
- Casual employees are excluded from a number of these FW Act provisions. While the term ‘casual employee’ is not used in the PS Act or subordinate legislation, many APS employees engaged on an irregular or intermittent basis (and not employed on a regular and systematic basis) may be considered to be casual employees for the purposes of the FW Act.
3.4.1 Unfair dismissal
- A non-ongoing APS employee may be able to apply for relief to the Fair Work Commission (FWC) on the grounds that the early termination of their non-ongoing employment was harsh, unjust or unreasonable (see Part 3-2 of the FW Act and Appendix A of this guide).
3.4.2 General protections
- A dismissed employee who believes that they have been dismissed in contravention of the General Protections provisions of the FW Act (e.g. because of the exercise of their workplace rights, participation in industrial activity or for a discriminatory reason) can apply to the FWC for relief (see Part 3-1 of the FW Act and Appendix A of this guide).
3.4.3 Notice of termination
- The FW Act provides that employees who are employed for a specified period of time, for a specified task or for the duration of a specified season will not be entitled to either notice of termination or redundancy pay (paragraph 123(1)(a)).
- However, it is important to note that this exclusion does not apply to non-ongoing APS employees who have their employment terminated prior to the end of employment for a specified term or a specified task. This is because non-ongoing APS employees engaged under paragraph 22(2)(b) of the PS Act can have their employment terminated at any time by notice (see subsection 29(1) of the PS Act). These types of engagements for a specified term or specified task which allow parties to give notice of termination before the end of the term are not considered to be ‘true contracts’ for a specified period or a specified task.
- Therefore, subject to limited exceptions (such as where the termination is because of serious misconduct), a non-ongoing APS employee needs to be given notice of termination or compensation instead of notice at least equal to the amount as set out in section 117 of the FW Act where employment is being terminated prior to the expected date of cessation, or prior to the completion of a specified task. Higher amounts may be provided under the award or enterprise agreement or engagement documentation that applies to the employee. For further information refer to Division 11 of Part 2-2 of the FW Act and Appendix A of this guide.
3.4.4 Application of National Employment Standards redundancy pay provisions to non-ongoing employees
- Under section 119 of the FW Act, an employee is ‘entitled to be paid redundancy pay by the employer if the employee’s employment is terminated at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour…’. The FW Act provides that certain employees are not entitled to redundancy pay including employees with less than 12 months continuous service and casual employees (see section 123 of the FW Act).
- Agencies terminating the employment of a non-ongoing APS employee prior to the completion of the specified term or the duration of the task, in circumstances where the employee’s job will no longer be performed by anyone, will generally be required to provide the employee with redundancy pay in accordance with the requirements set out in section 119 of the FW Act and give the employee notice of termination or payment instead of notice at least equal to the amount as set out in section 117 of the FW Act (see above). Redundancy pay will not be payable to an employee whose engagement for a specified term or specified task comes to its natural end or where the employee’s continuous period of service is less than 12 months.
- However, where an industrial instrument applying to an employee includes provisions which are equivalent to or more beneficial than the National Employment Standards (NES) redundancy amount, the employee should not be entitled to the benefit of both the NES redundancy entitlement and the compensation amount provided for in the industrial instrument. They should be paid whichever is the more beneficial of the entitlements.
- Agencies may need to seek their own legal advice about the interaction of any entitlement the employee may have under the NES and provisions relating to compensation for early termination that are set out in engagement documentation. Agencies should consider including a ‘termination by notice’ provision in engagement documentation (and where applicable in industrial instruments) which makes it clear that that any compensation amount that is specified is to be reduced by any NES redundancy amount payable to the employee.
3.4.5 Advising Centrelink and Unions
- Division 2 of Part 3-6 of the FW Act deals with the obligations on employers to notify Centrelink and relevant registered employee associations if the employer decides to terminate the employment of 15 or more employees for reasons of an economic, technological, structural, or similar nature, or for reasons including such reasons. Notification needs to occur prior to the termination decision taking effect.
- Under this Division, an employer must not terminate the employment of an employee who fits in this category until:
- written notification has been provided to Centrelink (section 530 of the FW Act); and
- each registered employee association that has a member who it is entitled to represent, and who is one of the 15 or more employees, is notified (section 531). Notification of the registered employee associations is only enforceable where the employer could reasonably be expected to have known that one or more of the employees who will be dismissed as a result of the decision is a member of the registered association.
- In addition to any consultation term under an award, enterprise agreement or other industrial instrument, an employer must consult with union(s) whose members that the union is entitled to represent will be dismissed as a result of the decision (section 531 of the FW Act). No consultation is required under these provisions if affected employees are not members of a union, or the employer could not reasonably be expected to have known that one or more of the employees who will be dismissed as a result of the decision is a member of the registered association.
- Paragraph 534(1)(a) of the FW Act provides that these provisions do not apply to certain types of employees including casual employees or employees employed for a specified period of time or for a specified task.
- However, it is important to note that this exclusion does not apply to non-ongoing APS employees who have their employment terminated prior to the end of the specified term or the specified task. This is because the employment of non-ongoing APS employees engaged under paragraph 22(2)(b) of the PS Act can be terminated at any time by notice (subsection 29(1) of the PS Act). These types of engagements for a specified term or a specified task which allow parties to give notice of termination before the end of the term are not considered to be ‘true contracts’ for a specified term or a specified task.
3.4.6 Compensation for early termination
- As noted above, 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, to agree at the time of engagement on the arrangements that would apply if the engagement were to be terminated early for a reason related to the operational requirements of the agency. 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. It should be made clear how these arrangements will interact with any entitlement an employee has to redundancy pay under the NES.
- It would also be sensible to agree at the time of the engagement that the employee will not be entitled to any compensation for early termination if their employment is terminated for any reason not related to the operational requirements of the agency.
- A possible approach to compensation arrangements that might apply if the engagement of an employee is to be terminated early is set out at Appendix B of this guide.
- Such an arrangement could be included in the engagement documentation, or in an industrial instrument. It should be noted that this may not always avoid further liability if the agreed amount is not found by the courts to be a reasonable payment for the damages suffered.