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Case C: Loss of security clearance as loss of essential qualification

A Fair Work Commission case, Applicant v Department of Defence [2014]1, confirmed that a security clearance can constitute an essential qualification, and that loss of a security clearance can be a valid reason for dismissing an employee. The case also confirmed that engaging in a Code of Conduct process is not necessary where the primary concern is security-related.

The applicant was employed by the Department of Defence, and was required to maintain a Top Secret Positive Vetting security clearance. His director asked the Australian Government Security Vetting Agency to review his security clearance. The clearance was subsequently revoked, and the employee was dismissed from the APS in August 2013.

The dismissal occurred under section 29(3)(c) of the Public Service Act 1999. That section allows termination of employment where 'the employee lacks, or has lost, an essential qualification for performing his or her duties'.

In his unfair dismissal application the applicant claimed that his security clearance should not have been revoked and therefore the termination of his employment was unfair. He claimed that any concerns about his conduct should have been addressed through a misconduct process and that the Department had failed to follow its own policies. He further claimed that, even without any level of security clearance, he still could have been employed by Defence, and should be reinstated.

The Department requires all employees to hold at least a baseline security clearance.

The Fair Work Commission found that there was a valid reason for the dismissal because:

  1. there was no ulterior motive for the request for the review of the applicant's security clearance
  2. holding a Top Secret clearance was an essential qualification for the applicant's employment, and
  3. the applicant was unable to remain employed by the Department without at least a baseline security clearance.

Lessons

  • Agencies may not be required to undertake a Code of Conduct process in circumstances where the concern is related to maintaining a security clearance as an essential qualification.
  • Employees who lose an essential qualification for their role may have their employment terminated. The term 'qualification' is a broad one that goes beyond formal academic qualifications.

1 See decision at https://www.fwc.gov.au/documents/decisionssigned/html/2014FWC4919.htm