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Supporting Guidance: Part 4 - Employment Conditions

4 Employment Conditions

4.1 Core APS terms and conditions of employment should not be enhanced unless otherwise approved by the Ministers.*

4.2 In recognition that the new Australian Government scheme will apply to Commonwealth agencies, agencies should not seek to vary current paid parental leave entitlements, pending the commencement of the new scheme.

4.3 Under legislated provisions, APS agencies and the parliamentary departments will ensure the portability of accrued paid leave entitlements where employees move between APS agencies, the Parliamentary Service and the Australian Capital Territory Public Service, providing there is no break in service.*

4.4 Long service leave should only be granted in blocks of at least seven calendar days per occasion and should not be broken by other forms of leave.

4.5 Workplace arrangements should incorporate leave arrangements that support the release of community service volunteers for emergency services duties and Defence Reservists for peacetime training and development.

4.6 APS agency workplace arrangements should include compulsory redeployment, reduction and retrenchment arrangements for employees identified as excess to requirements.*

4.7 Redundancy provisions, including severance pay and retention periods, should not be enhanced beyond existing arrangements, unless otherwise required by legislation, or approved by the Ministers.

4.1 Core APS terms and conditions should not be enhanced

4.1.1 An agency must not agree to enhancements to any existing terms and conditions relating to the matters set out in Attachment B, unless the Ministers grant the agency an exemption permitting such enhancements.

4.1.2 Paragraph 4.1.1 does not prevent agencies from seeking to make other changes to existing terms and conditions, including to change those terms and conditions to better reflect community expectations or to promote a greater degree of alignment between APS agencies.

4.1.3 Where an agency wishes to seek an exemption that would allow it to offer an enhancement to a term or condition (which may include where a change is proposed pursuant to paragraph 4.1.2), the agency is required to submit a business case to the APSC. The APSC will then seek a decision from the Minister in relation to the exemption. Agencies are strongly encouraged to consult with the APSC in relation to the development of any business case.

Cashing out of personal/carer's leave

4.1.4 It is Australian Government policy not to provide for the cashing out of any personal/carer's leave. Agencies should not enter into any such arrangements, including through workplace policies and practices.

4.2 Parental leave entitlements

4.2.1 The Government's intention is for its new paid parental leave scheme to commence on 1 July 2015. Accordingly, agencies are advised not to disturb current arrangements.

4.2.2 In addition, agencies should not include terms in enterprise agreements that seek to supplement the entitlement that the new PPL scheme will provide.

4.3 Portability of leave entitlements *

4.3.1 APS workplace arrangements are to retain portability of accrued annual leave and personal/carer's leave entitlements (however described), with future entitlements being those prevailing at the receiving agency. Entitlements to leave will subsequently accrue at the rate applying in the receiving agency.

4.3.2 The provisions of the Parliamentary Service Act 1999 and the Australian Capital Territory Government Service (Consequential Provisions) Act 1994 require APS agencies to recognise certain leave accrued in these services. Accordingly, workplace arrangements should provide for the portability of annual and personal/carer's leave (however described) between the Parliamentary Service and the APS, and accrued leave between the ACT Public Service and the APS. Workplace arrangements should also provide for the portability of personal carer's leave between the ACT Public Service and the APS as this is the basis of ongoing inter-government agreement.

4.3.3 The portability of leave within the APS requires receiving agencies to act on the advice of an employee's former employing agency in determining their accrued leave entitlement. For example, agencies have previously used a range of terms to describe personal/carer's leave in their workplace arrangements and have done so for varying reasons. A receiving agency is required to recognise leave accrued in an employee's former agency, even if the purpose for which it was provided is not recognised in the receiving agency's agreement. However, leave accrued from commencement with the receiving agency, will generally accrue in accordance with that agency's arrangements, unless specified otherwise.

4.3.4 Certain other terms and conditions of employment set out in Commonwealth legislation and applying to the APS will continue to apply and cannot be overridden by workplace arrangements. In particular, these include long service leave, maternity leave, workers' compensation and occupational health and safety.

4.3.5 Agencies considering whether to recognise prior service with, or seek to transfer other leave balances from, other bodies such as non-APS authorities or State Government agencies (other than for long service leave purposes) must consult with the APSC and the Department of Finance before proceeding.

4.4 Approval of long service leave

4.4.1 Long service leave is credited to an eligible employee in calendar months. The minimum period of long service leave that may be taken is seven calendar days. This will ensure there is no potential for an employee to access their long service leave in a way that would provide a more advantageous entitlement than that envisaged by the LSL Act.

4.5 Arrangements supporting the release of community service volunteers and Defence Reservists

4.5.1 The Australian Government expects agencies to promote the benefits of community service and Defence Reserve service to their employees and expects agencies to lead the way in employment policies and practices which support the release of employees for these purposes.

4.5.2 Agencies should note their obligation to provide community service leave in accordance with the requirements of the National Employment Standards (NES). Agencies should also cater for unpaid leave to community service personnel for emergency services duties encompassing leave for regular training, all emergency services responses, reasonable recovery time and ceremonial duties.

4.5.3 Attachment C outlines the public sector leave policy recommended to Australian Government employers by the Defence Reserves Support Council.

4.6 Compulsory redeployment, reduction and retrenchment provisions*

4.6.1 All enterprise agreements, determinations and, where relevant, common law agreements must provide for access to compulsory redeployment, reduction and retrenchment (RRR) for excess APS employees. This will ensure that agencies maintain the capacity to resolve excess employee situations by either:

  • moving the employee to a suitable job at or below their substantive classification level (with or without the employee's agreement); or
  • terminating the employee's employment under section 29 of the Public Service Act if the employee does not wish to accept voluntary retrenchment (or, in the case of an SES employee, an incentive to retire payment) and there is no useful work for the employee to perform.

Minimum entitlement under the National Employment Standards

4.6.2 The typical APS redundancy benefit for non-SES employees (as set out in the APS Award 1998 and replicated in most agency agreements) is two weeks' pay per year of continuous Commonwealth service (with a pro-rata amount for completed months of service). The amount of pay varies from a minimum of four weeks to a cap at 48 weeks.

4.6.3 While generally more favourable than the NES, some of the typical APS provisions are less favourable than the NES for employees with between two and three years' service, and three and four years' service. This means that for some employees made redundant during these periods, the NES will apply instead of the APS scale. Agencies should therefore ensure that redundancy payment provisions contained within new enterprise agreements and other workplace arrangements for non-SES employees are consistent with (but do not exceed) the NES entitlements for employees with two to three, and three to four years' service.

4.6.4 Table 1 below outlines the key differences between the NES entitlement and the typical APS provisions as described above:

Table 1: Key differences between the NES and APS Redundancy entitlements
Length of service NES Redundancy Typical APS Redundancy
Less than 1 year Nil 4 weeks
At least 1 year but less than 2 years 4 weeks 4 weeks
At least 2 years but less than 3 years 6 weeks 4 weeks + pro rata for completed months of service
At least 3 years but less than 4 years 7 weeks 6 weeks + pro rata
At least 4 years but less than 5 years 8 weeks 8 weeks + pro rata
At least 5 years but less than 6 years 10 weeks 10 weeks + pro rata
At least 6 years but less than 7 years 11 weeks 12 weeks + pro rata
At least 7 years but less than 8 years 13 weeks 14 weeks + pro rata
At least 8 years but less than 9 years 14 weeks 16 weeks + pro rata
At least 9 years but less than 10 years 16 weeks 18 weeks + pro rata
At least 10 years but less than 11 years 12 weeks 20 weeks + pro rata
11 years or more 12 weeks 22 weeks up to a max of 48 weeks

Retention periods to be reduced by National Employment Standards entitlement

4.6.5 Where an agency wishes to negotiate a retention period into a workplace arrangement (i.e. to provide non-SES employees with the option to take a retention period in lieu of a redundancy payment), the interaction between the retention period and the redundancy entitlements provided by the NES should be taken into account. The redundancy entitlement under the NES must be paid to an employee even if they elect to take a retention period.

4.6.6 To avoid double-dipping on redundancy entitlements, there should be a mechanism built into all relevant workplace arrangements that reduces a retention period by the equivalent number of weeks that an eligible employee would be entitled to under the NES. For example, if an employee was entitled to elect to take a four month retention period and they were also entitled to eight weeks' redundancy pay under the NES, the employee's retention period of four months should be reduced by eight weeks.

Flexibilities for Redeployment, Reduction and Retrenchment arrangements

4.6.7 Agencies are able to adapt their redundancy provisions to meet their specific needs, subject to the test of no enhancement of existing arrangements and the requirements described above. The APSC is able to provide further advice to agencies on these issues.

Specific arrangements for SES employees

4.6.8 Section 37 of the Public Service Act provides that an Agency Head may give notice in writing to an SES employee stating that the employee will become entitled to a payment of a specified amount if the employee retires within a period specified in the notice i.e. an incentive to retire.

4.6.9 The purpose of this provision is to facilitate change and effectively manage an agency's SES workforce particularly in downsizing situations. It is likely that most situations involving excess SES employees will be managed under section 37 of the Public Service Act.

4.6.10 Clause 7.3 of the Australian Public Service Commissioner's Directions 2013 (the Commissioner's Directions) sets out the minimum requirements that must be met in relation to an Agency Head giving notice to an SES employee under section 37 of the Public Service Act. The Commissioner's Directions provide that the Commissioner must have agreed to the amount to be paid to the employee in these circumstances. A workplace arrangement should not bind the Commissioner to a certain level of payment for redundancy or retrenchment and as such should be silent on the quantum of the payment. The Commissioner's Directions also provide that an employee must be given access to independent financial advice and career counselling.

4.6.11 As this incentive to retire provision requires the agreement of the individual SES employee, workplace arrangements applying to SES employees should continue to include provisions that make it clear that the employee may be redeployed to other duties, including at a lower level, or have their employment terminated without their agreement on the grounds that they are excess to an agency's requirements.

4.6.12 However, it is inappropriate for SES workplace arrangements to include provisions which provide a redundancy benefit or similar type of payment to persons whose employment is terminated involuntarily under section 29 of the Public Service Act. Similarly, SES workplace arrangements should not include retention arrangements for excess SES employees.

4.6.13 In addition, section 38 of the Public Service Act provides that before an Agency Head can terminate the employment of an SES employee under section 29 of the Public Service Act, the Commissioner must have issued a certificate stating that all the relevant requirements of the Commissioner's Directions made under subsection 11A(1) of the Public Service Act have been satisfied in relation to the proposed termination and the Commissioner is of the opinion that the termination is in the public interest.

4.6.14 Where an SES employee's employment is terminated under section 29(3)(a) of the Public Service Act (i.e. on the ground that he/she is excess to the requirements of the agency), the employee may be entitled to a NES redundancy payment in accordance with the Fair Work Act.

4.6.15 In addition, there may be some cases where the benefit paid to an SES employee who is retired under section 37 of the Public Service Act may be less than the redundancy benefit payable under the NES. In these cases, the specified amount that is agreed by the Commissioner under section 37 will be regarded as including any entitlement the employee would have under the NES. Agency Heads should make this clear in any advice given to an SES employee on separation benefits.

Statutory obligations and termination of employment

4.6.16 Agencies must be aware that workplace arrangements cannot override statutory obligations or remedies relating to termination of employment under the Fair Work Act or the Public Service Act.

4.7 No enhancement of existing obligations

4.7.1 In relation to non-SES employees, enterprise agreements and determinations, or other arrangements (i.e. an individual flexibility arrangement or a determination) which are used to supplement enterprise agreements, should not enhance the agency's existing redundancy obligations (including severance pay and retention periods) other than where required under legislation or approved by the Ministers.

The Ministers will only approve the enhancement of existing obligations in exceptional circumstances. If agencies believe they have exceptional circumstances they must seek advice from the APSC before proceeding.