i
Contents
Introduction ......................................................................................................................................................................... 1
Part one – Legislative and industrial framework .................................................................................................................. 2
1.1 Public Service Act and subordinate legislation ......................................................................................................... 2
1.1.1 Ongoing APS employees .................................................................................................................................. 2
1.1.2 Non-ongoing APS employees............................................................................................................................ 3
1.1.3 Additional requirements relating to Senior Executive Service employees ......................................................... 4
1.1.4 Review of termination of employment decisions ................................................................................................ 4
1.1.5 Reduction in classification ................................................................................................................................. 4
1.2 Fair Work Act ............................................................................................................................................................ 5
1.2.1 Payment of accrued entitlements ...................................................................................................................... 5
1.3 Other relevant Commonwealth laws ..................................................................................................................... 5
1.4 Industrial instruments ................................................................................................................................................ 6
1.5 Superannuation ........................................................................................................................................................ 6
Part two – Terminating the employment of an ongoing APS employee .............................................................................. 7
2.1 APS-specific requirements........................................................................................................................................ 7
2.1.1 Grounds for termination under Public Service Act ............................................................................................. 8
2.2 Fair Work Act provisions ........................................................................................................................................... 8
2.3 Specific grounds for termination – excess to requirements (s.29(3)(a)) .................................................................. 10
2.3.1 Management of excess staff situations ............................................................................................................ 10
2.3.2 Australian Public Service Bargaining Framework ............................................................................................ 11
2.3.3 Fair Work Act ................................................................................................................................................... 11
2.3.4 Redeployment of an excess employee - movement of an excess employee between agencies ..................... 15
2.3.5 Restrictions on engagement of redundancy benefit recipients ........................................................................ 16
2.3.6 Agency-specific arrangements ........................................................................................................................ 16
2.3.7 Dealing with employees who are not fit for and not at work ............................................................................. 17
2.4 Specific grounds for termination – lack of, or loss, of an essential qualification for performing duties (s.29(3)(b)) . 18
2.5 Specific grounds for termination – non-performance, or unsatisfactory performance of duties (s.29(3)(c)) ............ 19
2.5.1 Non-performance of duties .............................................................................................................................. 20
2.5.2 Unsatisfactory performance of duties .............................................................................................................. 20
2.5.3 Non-performance or underperformance of duties due to injury, illness or disability......................................... 21
2.6 Specific grounds for termination – inability to perform duties because of physical or mental incapacity (s.29(3)(d))
...................................................................................................................................................................................... 22
2.6.1 Fair Work Act ................................................................................................................................................... 22
2.6.2 Disability Discrimination Act............................................................................................................................. 23
2.6.3 Superannuation issues .................................................................................................................................... 24
2.7 Specific grounds for termination – failure to satisfactorily complete an entry-level training course (s.29(3)(e)) ...... 25
2.8 Specific grounds for termination – failure to meet a condition of engagement (s.29(3)(f)) ...................................... 26
2.9 Specific grounds for termination – Breach of the APS Code of Conduct (s.29(3)(g)) ............................................. 27
Part three - Terminating the employment of a non-ongoing APS employee ..................................................................... 28
3.1 Public Service Act provisions .................................................................................................................................. 28
ii
3.2 Superannuation issues ........................................................................................................................................... 29
3.3 Review of termination decisions ............................................................................................................................. 29
3.4 Fair Work Act provisions ......................................................................................................................................... 29
3.4.1 Unfair dismissal ............................................................................................................................................... 29
3.4.2 General protections ......................................................................................................................................... 29
3.4.3 Notice of termination........................................................................................................................................ 30
3.4.4 Application of National Employment Standards redundancy pay provisions to non-ongoing employees ........ 30
3.4.5 Advising Centrelink and Unions ....................................................................................................................... 31
3.4.6 Compensation for early termination ................................................................................................................. 31
Appendix A: Fair Work Act provisions – further information .............................................................................................. 33
Appendix B: Compensation for early termination of non-ongoing APS employees engaged for a specified term ............. 36
Appendix C: Amounts to be included in payment in lieu of notice ..................................................................................... 37
iii
Introduction
This guide provides Australian Public Service (APS) agencies with information on issues relating to the
termination of employment of APS employees. Termination of employment is a serious matter and the
power to terminate employment under the Public Service Act 1999 (PS Act) is subject to a number of checks
and balances. It is important that agencies are aware of the framework governing termination of employment
and exercise relevant administrative powers consistent with the framework and with the APS Values and
APS Employment Principles.
This guide provides advice relating to:
 the different grounds of termination set out in section 29 of the PS Act; and
 the legal requirements governing termination of employment, particularly those applying under both the
PS Act and the Fair Work Act 2009 (FW Act).
It also touches on the requirements of administrative law, anti-discrimination laws, superannuation law and
industrial instruments.
As the law regulating termination of employment is complex and subject, amongst other things, to the
jurisdiction of the Fair Work Commission, agencies are encouraged to establish appropriate mechanisms to
inform themselves of any legislative changes and developments in case law.
There are other APS publications that should be read in conjunction with this guide, depending on the nature
of the termination decision. For example, there are more extensive guides that deal with:
 Senior Executive Service employment matters – see http://www.apsc.gov.au/publications-andmedia/current-publications/the-senior-executive-service-selection,-mobility-and-separation;
 arrangements relating to probation – see http://www.apsc.gov.au/aps-employment-policy-andadvice/engagement/probation;
 other conditions of engagement – see http://www.apsc.gov.au/aps-employment-policy-andadvice/engagement/conditions-of-engagement; and
 handling misconduct – see http://www.apsc.gov.au/aps-employment-policy-and-advice/aps-values-andcode-of-conduct/handling-misconduct.
1
Part one – Legislative and industrial framework
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 agency1. 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.
1 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.
2
These grounds are as follows:
a. the employee is excess to the requirements of the agency – see 2.3 of this guide
b. the employee lacks, or has lost, an essential qualification for performing his or her duties – see 2.4
c. non-performance, or unsatisfactory performance, of duties – see 2.5
d. inability to perform duties because of physical or mental incapacity – see 2.6
e. failure to satisfactorily complete an entry-level training course – see 2.7
f.
failure to meet a condition of engagement imposed under subsection 22(6) of the PS Act – see 2.8
g. breach of the Code of Conduct – see 2.9
h. 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.
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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 http://www.apsc.gov.au/publications-and-media/current-publications/thesenior-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.2
2
Note that individual agency arrangements may require consideration of reduction in classification as an alternative to termination in
certain circumstances.
4
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
5
 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.
1.5 Superannuation
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.
6
Part two – Terminating the employment of an ongoing
APS employee
The main points and considerations applying to the termination of employment of an ongoing Australian
Public Service (APS) employee are as follows:
 Termination of an ongoing APS employee must comply with the APS-specific requirements set out in the
Public Service Act 1999 (PS Act) and subordinate legislation and be consistent with the requirement to
uphold the APS Values and the APS Employment Principles.
 Termination decisions must also comply with the relevant provisions of the Fair Work Act 2009 (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.
2.1 APS-specific requirements
 Termination of employment of APS employees 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.
-
There are also separate incentive to retire provisions that operate in relation to ongoing SES
employees (section 37 of the PS Act and clause 7.3 of the Directions). Further information on SES
incentive to retire arrangements is available at http://www.apsc.gov.au/publications-andmedia/current-publications/the-senior-executive-service-selection,-mobility-and-separation.
 Notice of termination must be in writing (subsection 29(1)).
 The ground or grounds must be specified in the written notice of termination (subsection 29(2)).
 Termination can only be on one or more of the grounds spelt out in subsection 29(3) of the PS Act.
 Termination for a breach of the APS Code of Conduct may only be imposed where an agency head has
determined a breach has occurred in accordance with the procedures established under subsection 15(3) of
the PS Act.
 Clause 4.2 of the Directions 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.
 There are certain limitations in superannuation legislation on an agency head’s power to terminate the
employment of an ongoing APS employee on the grounds of inability to perform duties because of
physical or mental incapacity.
 Any relevant procedures and requirements set out in workplace arrangements applicable to the employee
should be complied with before the employee’s employment is terminated.
7
 The agency head must notify in the Public Service Gazette a decision to terminate the employment of an
ongoing APS employee, where the employee has been terminated on misconduct grounds(clause 2.29 of
the Directions).
 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 APS employee (apart from a right under PS Regulation 7.2 for a
former 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 of the
process by the Courts (generally the Federal Court) may be available depending on the circumstances of
the decision. In addition, other avenues may be available under the FW Act – see Part 2.2 below.
2.1.1 Grounds for termination under Public Service Act
Detailed information relating to the specific grounds for termination of employment of an ongoing APS
employee as set out in section 29 of the PS Act can be found at the following parts of this guide:
Termination
 where the employee is excess to the requirements of the agency – part 2.3
 where the employee lacks, or has lost, an essential qualification for performing his or her duties – part 2.4
 for non-performance, or unsatisfactory performance, of duties – part 2.5
 for inability to perform duties because of physical or mental incapacity – part 2.6
 for failure to satisfactorily complete an entry-level training course – part 2.7
 for failure to meet a condition of engagement imposed under subsection 22(6) of the PS Act – part 2.8
 for a breach of the Code of Conduct – part 2.9.
2.2 Fair Work Act provisions
 A person who was employed as an ongoing APS employee may be able to seek relief in relation to the
termination of their APS employment in a number of forums, including under the provisions of the FW
Act.
- For example, an dismissed APS employee may be able to make an unfair dismissal application to the
Fair Work Commission (FWC) on the grounds that the termination of their employment was harsh,
unjust or unreasonable (see part 3-2 of the FW Act).
- In addition, 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).
 The FW Act also contains provisions setting out the obligations on employers to notify Centrelink and
registered employee associations where the employer proposes to terminate the employment of 15 or more
employees for reasons of an economic, technological, structural or similar nature (see sections 530 and
531 of the FW Act).
 Subject to limited exceptions, an ongoing APS employee needs to be given notice of termination or
payment instead of notice at least equal to the amount as set out in section 117 of the FW Act. Higher
amounts may be provided under the APS Award or enterprise agreement or other workplace arrangement
8
that applies to the employee. Such notice or payment instead of notice does not, however, have to be
provided in cases of serious misconduct (this term is defined in regulation 1.07 of the FW Regulations).
- Agencies will need to determine on a case by case basis whether the conduct of an employee falls
within this definition of ‘serious misconduct’ in the FW Regulations and therefore whether the
employee is entitled to notice of termination, or payment in lieu.
- However, this does not mean that APS employees can have their employment terminated on the spot for
serious misconduct. Agencies will need to follow their established procedures for determining whether
an employee has breached the APS Code of Conduct, and termination of employment with or without
notice on the ground of misconduct can only occur at the end of a properly conducted misconduct
process.
 The FW Act also includes provisions relating to redundancy pay in certain circumstances as well as
providing an entitlement to the payment of unused annual leave entitlements when an employee’s
employment ends.
9
2.3 Specific grounds for termination – excess to requirements
(s.29(3)(a))
Under paragraph 29(3)(a) of the Public Service Act 1999 (PS Act), an agency head may terminate the
employment of an ongoing Australian Public Service (APS) employee who is excess3 to the requirements of
that agency.
The PS Act framework also includes provision for an agency head to reduce the classification of an
employee in their agency (without the employee’s consent) on the grounds of being excess to the
requirements of the agency.
Also relevant are specific ‘incentive to retire’ provisions which apply to Senior Executive Service (SES)
employees only. Further information on the management of excess SES employees is available at
http://www.apsc.gov.au/publications-and-media/current-publications/the-senior-executive-service-selection,mobility-and-separation.
2.3.1 Management of excess staff situations
Consistent with the devolved employment framework operating in the APS, downsizing exercises are
conducted by individual agencies within the parameters of Government policies, their own workplace
arrangements and budgets.
Subject to the terms of any agency-specific enterprise agreement, agency heads have some discretion to
decide how to manage an excess staff situation. There are a range of options available in managing changing
workforce requirements—for example redeployment within an agency or elsewhere within the APS, natural
attrition, targeted offers of voluntary retrenchment and involuntary retrenchment (as a last resort). Any such
process will need to be consistent with the APS Values and APS Employment Principles, the Fair Work Act
2009 (FW Act) and the agency’s enterprise agreement. In any excess staff situation, agencies should
establish clear, objective and defensible strategies for identifying which staff are excess.
Because of the range of circumstances that can arise, it is not possible to be prescriptive about the processes
to be followed in each situation—different processes will fit different circumstances. Whatever strategy or
process is ultimately chosen, it is important that the agency maintain control of the process and should,
wherever possible, seek to retain the most productive staff—a decision on who will be made an offer of
voluntary retrenchment is clearly a management responsibility.
Voluntary retrenchment has a role in facilitating structural and functional change. However, careful
management is required to avoid creating expectations of receiving a redundancy payment to separate from
the agency. In addition, redundancy provisions should not be used as an alternative to rigorous performance
management procedures or other administrative action.
APS redeployment policy
In April 2011, the Government announced that APS redeployment arrangements were to be enhanced and
would be facilitated by a new APS Redeployment Policy. The new arrangements came into effect on 23 May
2011 and are intended to operate consistently with the existing employment framework applying in APS
agencies, in particular the APS Bargaining Framework and agency enterprise agreements.
The APS Redeployment Policy sets out eight key principles to guide agencies when reducing staffing levels.
It also introduces an APS-wide arrangement for employees who are excess and who seek redeployment
3
Agency enterprise agreements will typically specify the circumstances in which an employee may be identified as excess.
10
across the APS. The policy builds on existing agency arrangements already in place for managing excess
staff by introducing more formal processes to assist employees to seek redeployment across the APS.
As part of the new arrangements, the Australian Public Service Commission has established an on-line
register for excess employees to register their interest in redeployment, so that other agencies may consider
them for any vacancies. APS agencies are required to review the register to identify and assess employees
who may be suitable. This can occur either before advertising occurs or prior to applications closing.
Further information on the operation of the APS Redeployment Policy, including operating procedures for
the on-line redeployment register, is available from http://www.apsc.gov.au/aps-employment-policy-andadvice/movements/aps-redeployment-policy.
2.3.2 Australian Public Service Bargaining Framework
The APS Bargaining Framework, which sets out Australian Government policy as it applies to workplace
relations arrangements in APS agencies in respect of their APS employees, and its accompanying Supporting
Guidance provides that:
 each APS agency must include provisions in their collective/enterprise agreements and other workplace
instruments that provide for access to compulsory redeployment, reduction and retrenchment (RRR)
arrangements for the management of excess staff; and
 APS agencies are not able to enhance existing redundancy arrangements (other than where required by
legislation or in exceptional circumstances with the approval of the Minister for the Public Service and
Integrity).
The requirement to provide for compulsory RRR provisions is intended to ensure that agencies maintain the
capacity to resolve excess staff situations by either:
 moving the employee to a suitable job at or below their substantive classification level (with or without
the employee’s agreement) by:
-
assigning different duties to an employee (section 25 of the PS Act);
-
reducing an employee’s classification without their consent, where the employee is excess to
requirements at the higher level (sections 23(4) & 25 of the PS Act and Rule 12 of the Public Service
Classification Rules 2000); or
 terminating the employee’s employment under section 29 of the PS Act with or without the employee’s
agreement.
The Supporting Guidance to the APS Bargaining Framework sets out what is meant by ‘existing redundancy
arrangements’ for the purposes of the no-enhancement requirement. Agencies are able to adapt their
redundancy provisions to meet their specific needs, subject to satisfying the no-enhancement test. The
Supporting Guidance is located at http://www.apsc.gov.au/aps-employment-policy-and-advice/workplacerelations.
2.3.3 Fair Work Act
In addition to the General Protections and Unfair Dismissal provisions (see Appendix A of this guide), the
FW Act includes a number of other provisions that are important in considering the termination of APS
employees on excess grounds. They relate to:
 the National Employment Standards;
11
 a ‘genuine redundancy’ exemption from the application of the unfair dismissal provisions; and
 advising Centrelink and unions in relation to certain proposed termination decisions.
National Employment Standards – redundancy pay
The National Employment Standards (NES) in the FW Act operate as a safety net, setting key minimum
entitlements which apply to all APS employees, including in relation to redundancy pay. The NES are not
able to be excluded or modified to the detriment of an employee by an enterprise agreement or a modern
award or by a contract of employment. However, where permitted by the NES provisions, a modern award or
enterprise agreement may modify certain NES entitlements in limited circumstances (see section 55 of the
FW Act). Note that the Australian Public Service Award 1998 (APS Award 1998), which includes
redundancy pay and notice of termination provisions, is not a ‘modern award’ for the purposes of this
provision.
Under the NES, certain employees are entitled to redundancy pay when their employment is terminated by
the employer because the employer no longer requires the job done by the employee to be done by anyone
(except in cases of ordinary and customary turnover of labour)see section 119 of the FW Act.
The amount of redundancy pay under the NES is based on an employee’s length of service and provides a
benefit of between 4 and 16 weeks pay (section 119 of the FW Act). Redundancy pay is payable at the
employee’s base rate of pay for his or her ordinary hours of work. The length of an employee’s redundancy
pay period will be determined by the table in subsection 119(2) of the FW Act. Under the NES, there is no
entitlement to redundancy pay for certain types of employees including employees with less than 12 months
continuous service and casual employees (see sections 121 and 123 of the FW Act).
Where an agency agreement or other instrument setting terms and conditions of employment provides for
redundancy entitlements which are equivalent or more beneficial to employees than the NES amount, the
employee’s entitlement and the NES entitlement will operate in parallel so that the employee will get the
benefit of the NES entitlement and any above-NES entitlement provided for in the industrial instrument (see
subsection 55(6) of the FW Act). For example, if the award or agreement entitlement for an employee with at
least 10 years continuous service is a redundancy payment of 20 weeks, the provisions of the NES will
apply, as a minimum standard, to 12 weeks of that payment. However, the employee would receive 20 weeks
redundancy pay.
In this regard, the normal APS severance or redundancy benefit as set out in the APS Award 1988 and
replicated in agency agreements is 2 weeks pay per year of continuous Commonwealth service, with a
minimum benefit of 4 weeks pay and a maximum benefit of 48 weeks pay. This provides a more generous
benefit overall than that provided under the NES, although the NES is more generous than the APS
arrangements for certain employees with short service.
 For employees with between 2 and 3 years service, the APS benefit would be between 4 and 6 weeks pay
(depending on how many completed months service the person also had) while the NES guarantees at
least 6 weeks pay for all persons in this category, where the NES applies; and
 For persons with between 3 and 4 years service, the APS benefit would be between 6 and 8 weeks pay
while the NES guarantees 7 weeks pay for all persons with this period of service, where the NES applies.
Employees who fall into either of the two situations identified above who are terminated on excess grounds
(in circumstances where the agency no longer requires the employee’s job to be done by anyone) will be
entitled to the benefits specified in the NES, notwithstanding that their agency agreement may specify a
lesser entitlement and/or is silent on NES redundancy entitlements.
12
APS agreements should be drafted to provide that the standard APS redundancy benefit available to excess
APS employees on termination of employment is subject to any minimum amount the employee is entitled to
under the NES. Under the APS Bargaining Framework, this will not be regarded as an enhancement of an
agency’s RRR entitlements.
Impact of NES redundancy pay entitlement on retention arrangements
Another impact of the introduction of the NES redundancy pay entitlement is that, if an excess employee has
an entitlement to a NES redundancy benefit on termination of employment, that entitlement will apply
regardless of whether the excess employee has, prior to termination, accessed a period of retention in
employment.
Many APS agreements provide retention in employment as an alternative to redundancy pay. Retention
periods allows excess employees to remain in employment for specified periods (up to 13 months in some
instances) while they seek to be redeployed. Where the employee is not successful in being redeployed by
the end of the relevant period of retention, APS arrangements provide that termination of employment can
occur with no (APS) redundancy benefit being paid.
To address the issue of the introduction of the NES, the Supporting Guidance now provides that agency
agreements should include offsetting arrangements which provide that the retention period will be reduced
by an amount equivalent to an employee’s entitlement to an NES redundancy benefit (calculated as at the
employee’s termination date), in circumstances where the employee receives an NES redundancy payment
on termination.
A number of APS agreements also provide that where there is insufficient productive work available for an
excess employee during the remainder of their retention period and where there are no reasonable
redeployment prospects of redeployment in the APS, the employment may be terminated and the balance of
the retention period paid to the employee as a lump sum. The Supporting Guidance now provides that in
these cases agreements should make it clear that that an employee will, on termination of employment, be
paid a lump sum comprising:
 the balance of the retention period (as shortened for the NES) and this payment will be taken to include
the payment in lieu of notice of termination of employment; and
 an additional redundancy payment equal to the amount by which the retention period was shortened due to
the NES component.
For agency agreements made before the introduction of the NES on 1 January 2010 which do not include
these offsetting arrangements, regulation 2.02A of the Fair Work (Transitional Provisions and
Consequential Amendments) Regulations 2009 provides that where an APS employee enters into a retention
period, the employee will, if their employment is terminated:
 not receive redundancy pay under the NES where the amount paid to the employee during the retention
period is greater than, or equivalent to, the amount payable under the NES; or
 receive a redundancy payment equivalent to the difference between the NES entitlement and the value of
the retention period where the amount payable during the retention period is less than the benefit available
under the NES.
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Genuine redundancy exemption from unfair dismissal
The FW Act includes a ‘genuine redundancy exemption’ from the application of the unfair dismissal
provisions of that Act. Section 389 of the FW Act provides that a person’s dismissal will be a case of
genuine redundancy if:
 the employer no longer needs the job to be done by anyone because of changes in the operational
requirements of the employer’s enterprise; and
 the employer has complied with any obligation in an applicable modern award or enterprise agreement to
consult about the redundancy.
It is important to note that section 389 of the FW Act goes on to provide that a person’s dismissal will not be
a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be
redeployed within the employer’s enterprise or the enterprise of an associated entity of the employer.
The question of how this exemption will be applied in the APS context has not been tested. The
Commonwealth is the employer of all APS employees and so the Commonwealth is ‘the enterprise’ for the
purposes of section 389 of the FW Act. While it is the norm for redeployment opportunities to be explored
within an agency where an employee is identified as excess, it is possible that if attempts are not made to
redeploy an employee both within the agency and across the APS prior to making a decision to terminate the
employee’s employment on excess grounds, it may be difficult for an agency to make out the genuine
redundancy exemption, should the employee subsequently lodge an unfair dismissal claim4. Ultimately,
however, a decision as to whether the exemption applies will be a matter for the FWC.
This does not necessarily mean that a termination decision will be considered to be unfair if redeployment
opportunities are not pursued prior to a termination decision being made. However, it may be the case that
the termination decision is able to be reviewed by the FWC.
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); 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. 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
(subsection 531(2)).
In addition to any consultation term under an award, enterprise agreement or industrial instrument, an
employer must consult with the union(s) whose members are affected by the decision (see subsection 531(3)
of the FW Act).
4
Note that the APS Redeployment Policy introduced in April 2011 is designed to assist in the redeployment of excess staff across the
APS.
14
Section 534 of the FW Act provides that these requirements do not apply to certain categories of employees
including employees dismissed because of serious misconduct.
It is also worth noting in this context that enterprise agreements are required to include a term that requires
the employer to consult with employees about major workplace changes that are likely to have a significant
effect on the employees (section 205).
2.3.4 Redeployment of an excess employee - movement of an excess employee
between agencies
Redeployment is a cost-effective method of dealing with excess staff. It provides an opportunity to retain
skills and experience, often built up over many years and at some cost to the Commonwealth, and it avoids
the financial, human and other costs associated with retrenchments. The redeployment of excess staff to
suitable vacancies also avoids many of the costs and delays associated with recruiting and training new staff.
As noted above, there are new redeployment arrangements in operation in the APS which are designed to
encourage the redeployment of excess staff. Further information is available at http://www.apsc.gov.au/apsemployment-policy-and-advice/movements/aps-redeployment-policy.
In addition, agency agreements and/or general policies may contain procedures for assisting with the
redeployment of excess staff, including whether the agency will provide access to external providers of
redeployment services.
Voluntary moves
Excess APS employees may be redeployed between APS agencies (at or below level) under section 26 of the
PS Act. Section 26 provides that an agency head can enter into a written agreement with an employee from
another agency to move to the gaining agency, and that the agreement has effect subject to its terms and
according to the Directions.
A decision as to whether an excess employee who agrees to move to another APS agency at a lower
classification level is entitled to any income maintenance may depend on the wording of the agreements
applying in the two agencies concerned. Regardless of whether there are any specific provisions in an
agency’s enterprise agreement, in order to facilitate the redeployment process it may be possible in certain
circumstances for the losing agency to agree to continue to pay income maintenance after the person moves
to another agency.
Compulsory moves
Section 27 of the PS Act provides the authority for an excess APS employee to be moved (at or below their
classification level) to another agency, without the employee’s agreement. Under this section, the Australian
Public Service Commissioner may, by direction in writing, move an excess employee to another agency,
without anyone’s consent. For the purposes of section 27 of the PS Act, an APS employee is an excess
employee only if the agency head has notified the Commissioner in writing that the employee is excess to the
requirements of the agency.
This power is expected to be used only in exceptional circumstances where the Commissioner is satisfied
that it is in the interest of the APS to do so and the employee’s suitability is demonstrated. As a matter of
practice, the Commissioner will normally only exercise this power after consultation with the heads of the
two affected agencies. Where an excess employee is moved by the Commissioner, the agency head of the
gaining agency will determine the duties of the employee in the agency under section 25 of the PS Act.
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2.3.5 Restrictions on engagement of redundancy benefit recipients
The Directions set out certain limitations on the subsequent employment in the APS of persons who have
received a redundancy benefit from an APS agency or the Australian Parliamentary Service and their
‘redundancy benefit period’ has not expired. For further information refer to http://www.apsc.gov.au/apsemployment-policy-and-advice/recruitment-and-selection/reengagement.
2.3.6 Agency-specific arrangements
Detailed provisions concerning the management of non-SES excess staff are typically set out in agency
enterprise agreements and/or agency policies. RRR arrangements can vary between different agencies, but in
broad terms the more common arrangements are as follows:
 a definition of the circumstances in which an employee may be considered excess – this is normally
expressed in the following terms:
- the employee is included in a class of employees employed in the agency, which class comprises a
greater number of employees than is necessary for the efficient and economical working of the agency;
- the services of the employee cannot be effectively used because of technological or other changes in the
work methods of the agency or (structural or other) changes in the nature, extent or organisation of the
functions of the agency; or
- the duties usually performed by the employee are to be performed at a different locality, the employee
is not willing to perform duties at the locality and the agency head has determined that the provisions of
this clause apply to that employee.
 the provisions only apply to ongoing employees who have completed their period of probation;
 there may be a commitment to an initial discussion/consultation period as well as a consideration period
for employees to consider their options (up to 4 weeks for each);
 an employee is identified as excess (this sets in train the formal procedures);
 an excess employee generally has two options:
i. Accept an offer of voluntary retrenchment (a once-only offer) leading to termination of employment
with a redundancy benefit within a reasonably short timeframe (although allowance is made for a
reasonable consultation process and for employees to consider their options).
- The standard rate for the redundancy benefit in the APS is 2 weeks pay per year of continuous
Commonwealth service with a minimum of 4 weeks and a maximum of 48 weeks pay.
- This amount is separate from other benefits a person may be entitled to on separation from the APS
including notice (or payment in lieu of notice), as well as payment for any annual leave or long
service leave entitlement. In addition, staff may, depending on their age and method of termination,
also be able to access superannuation benefits. OR
ii. Enter into a retention period during which redeployment options are explored.
- The length of the retention period may vary across agencies, but the maximum amount contemplated
by the agreement making parameters is 13 months for employees with 20 or more years of service, or
who are over 45, and 7 months for other employees, although these periods are reduced by an amount
equivalent to the employee’s entitlement to a redundancy payment under the NES.
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- The extent of redeployment assistance given to excess employees in these circumstances will be set
out in agency specific arrangements.
- An employee may be reduced in classification as part of the redeployment process and an agency
agreement may specify the salary maintenance provisions that apply in these circumstances.
- If at the end of the retention period the excess employee has not been redeployed, the employee can
be involuntarily terminated without an APS redundancy benefit (but the employee may be entitled to
a redundancy payment under the NES).
Many agencies follow these ‘typical provisions reasonably closely, although a number have introduced some
modifications – for example, by:
 reducing the length of the retention period available to excess employees or removing retention in
employment as an option altogether (and paying a redundancy benefit on voluntary or involuntary
retrenchment in these circumstances);
 shortening the consideration and consultation periods;
 introducing accelerated separation arrangements (which in essence allow an employee to receive an extra
payment in lieu of the balance of the consultation and consideration periods where the employee agrees to
be terminated within a certain timeframe);
 allowing the employer to initiate provisions which result in the employee being terminated prior to the end
of the retention period where redeployment is proving impractical. In these circumstances the employee
may be entitled to be paid the balance of the retention period (or part of it) as a lump sum payment.
Subject to the terms of an agency’s enterprise agreement, there is a substantial amount of discretion available
to an agency head in managing excess staff situations and in deciding which employees are to be excess to
requirements. Agencies should consider developing staff reduction strategies that are appropriate to the
nature and scope of the downsizing exercise and the agencies’ operational requirements and which are
integrated with longer term workforce planning strategies.
2.3.7 Dealing with employees who are not fit for and not at work
Where an agency is considering offering voluntary retrenchment to an employee who is not fit for and not at
work, the agency should be satisfied that:
 the employee is excess to requirements;
 the appropriateness of termination on the grounds of physical or mental incapacity has been assessed and
any request for invalidity retirement has been considered and determined by the relevant superannuation
authority (see Part 2.6 of this guide for further information); and
 the Commonwealth is not exposed to unnecessary or increased liability arising under workers
compensation legislation or at common law in relation to an illness or injury as a result of the agency
offering, and the employee accepting, voluntary retrenchment.
Agencies should consult ComSuper and Comcare as necessary for further information.
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2.4 Specific grounds for termination – lack of, or loss, of an essential
qualification for performing duties (s.29(3)(b))
An agency head may terminate the employment of an ongoing Australian Public Service (APS) employee
who does not hold, or who ceases to hold, or becomes ineligible to hold or use, an essential qualification for
the performance of his/her duties.
In the employment context, an essential qualification can include a formal educational or vocational standard
that has been attained by/awarded to the person and that is established as essential for the performance of
particular duties. It may also refer to other things such as holding a driving licence, or the requirement to
attain and maintain a security clearance at a particular level, as well as qualifications which are more along
the lines of a particular quality or accomplishment that is required for the employee to be able to perform
their duties properly or safely. For example, in some cases an employee may be required to meet and
maintain a certain level of physical fitness for the performance of their duties.
Where the performance of particular duties require an essential qualification, this should be made clear to the
employee prior to being assigned to the particular duties. In addition, an agency will need to consider
whether agency-specific procedures for the termination of employment on the ground of lack or loss of an
essential qualification should be established. Any such procedures should clearly indicate the types of
qualifications that are considered essential, the circumstances where termination of employment or reduction
in classification is likely to be considered, and should have due regard to procedural fairness.
When an agency head is considering termination on this ground, it may be appropriate to consider whether,
in the particular circumstances of the case, redeployment to other duties or a reduction in classification on
the ground set out in paragraph 23(4)(d) of the Public Service Act 1999 (PS Act) is a more appropriate
alternative to termination of employment.
In addition, in some cases, the circumstances that resulted in the loss of an essential qualification could mean
that termination on other grounds might be considered.
 For example, if an employee was convicted of a criminal offence that resulted in the loss of a security
clearance, then it may be appropriate to consider whether the employee has breached the APS Code of
Conduct. If this is the case, then termination of employment on the ground set out in paragraph 29(3)(g) of
the PS Act may be more appropriate – see 2.9.
Employees whose employment is terminated on this ground will have an entitlement to notice of termination
or payment in lieu of notice in accordance with the provisions of the Fair Work Act 2009 - see Appendix A
of this guide.
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2.5 Specific grounds for termination – non-performance, or
unsatisfactory performance of duties (s.29(3)(c))
An agency head may terminate the employment of an ongoing Australian Public Service (APS) employee on
the ground of non-performance, or unsatisfactory performance, of duties.
 Non-performance and unsatisfactory performance in an employment context usually means that an
employee who has the capacity to perform their duties is not performing them at all or is performing them
unsatisfactorily.
The APS Employment Principles provide that the APS is a career bases service that… requires effective
performance from each employee (paragraph 10A(1)(d) of the Public Service Act 1999 (PS Act)). Chapter 4
of the Australian Public Service Commissioner’s Directions 2013 (the Directions) expands on this
employment principle and provides, inter alia, that each agency will have:
 fair and open performance management processes and practices that support a culture of high
performance, in which all performance is effectively managed; and
 provides each APS employee with a clear statement of the performance and behaviour expected of him or
her, and an opportunity to discuss his or her responsibilities.
Note that Clause 4.2 of the Directions 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. This material is currently being developed and will be
published on the Commission’s website when available.
Under Chapter 4 of the Directions, it is made clear that employees are required to participate constructively
in agency-based performance management processes and practices. These processes/practices should include
specific provisions for assessing and resolving cases of underperformance which can result in a range of
outcomes including reassignment of duties, reduction in pay and classification or termination of
employment. Agencies need to consider whether they develop different performance management systems
and procedures for non-ongoing employees and ongoing employees who are subject to a probationary period.
In addition, these systems and procedures should differentiate between non-performance and
underperformance of duties.
Any procedures for managing non-performance or underperformance established by an agency should have
regard to procedural fairness and clearly indicate the circumstances where termination of employment or
reduction in classification is likely to be considered. They should contain provisions for employees to be
warned about non-performance or unsatisfactory performance and to be given a fair chance to improve
performance.
Performance management procedures are often included in an agency's enterprise agreement. It is suggested
that where an agency includes procedures for assessing performance and determining unsatisfactory
performance of duties within their enterprise agreement, it would be prudent to clearly exclude non-ongoing
APS employees and ongoing APS employees who are subject to a probationary period from those formal
procedures. Performance management expectations and procedures for these staff can be set out elsewhere.
Employees terminated on this ground will have an entitlement to notice of termination or payment in lieu of
notice in accordance with the provisions of the Fair Work Act 2009 (FW Act) - see Appendix A of this
guide.
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2.5.1 Non-performance of duties
Non-performance of duties includes situations where an employee has been:
 absent from work without approval and it is no longer reasonable for the employer to continue the
employment relationship; or
 on an unauthorised absence and has not responded satisfactorily to reasonable attempts by the agency to
have the employee return to duty;
 granted leave, but has not returned to work at the end of a period of approved leave and a further period of
leave has not been approved; or
 attending at the workplace but not undertaking assigned duties – however, as noted below, it may be more
appropriate to deal with such a situation under an agency’s procedures for determining whether an
employee has breached the APS Code of Conduct.
The first three circumstances above deal with a situation where an employee either fails to attend for work,
or fails to return to work from leave, and therefore fails to perform the duties for which they are employed.
This can give rise to ‘abandonment of employment’ issues.
Where an ongoing APS employee does not return to work in these circumstances it will not necessarily
amount to resignation at common law. In other words, the breach of the contract of employment by the
employee may not terminate the employment relationship even where it consists of a failure to perform any
of the obligations of an employee. As such, given the potential uncertainty as to whether an employee has
actually abandoned their employment, an agency head should consider taking action under paragraph
29(3)(c) of the PS Act in order to bring the matter to a conclusion.
In line with notice obligations under the FW Act and procedural fairness requirements, agencies should make
reasonable attempts to ascertain the reasons for the employee's failure to return to work or undertake his/her
duties, and give the ongoing APS employee a warning of the consequences of not resuming duties and a
reasonable opportunity to explain the continued absence or to return to duty, prior to making any decision as
to whether termination of employment is warranted.
In considering whether to terminate the employment of an employee because of an absence from work, an
agency head will also need to have regard to section 352 of the FW Act which prohibits termination of
employment where an employee is temporarily absent from work because of illness or injury of a kind
prescribed by the FW Regulations. FW Regulation 3.01 defines what temporary absence because of illness or
injury means—for further information on this regulation, refer to Part 2.6 on termination on the ground of
inability to perform duties because of physical or mental incapacity.
Depending on circumstances, a situation where an employee attends work but fails to comply with a proper
direction to perform his/her assigned duties (i.e. in the fourth circumstance described above) may be more
appropriately dealt with under the Code of Conduct procedures - see clause 4.2 of the Directions and Part 2.9
of this guide.
2.5.2 Unsatisfactory performance of duties
Consideration of the termination of employment of an ongoing APS employee on this ground will usually be
handled as part of an agency's performance management or underperformance arrangements.
Agency performance management procedures will usually include:
 when the employee can be advised that his or her performance appears to be unsatisfactory;
20
 details of any period of work performance assessment that will be applied to the employee;
 possible consequences for the employee if he or she does not attain and sustain the required standards by
the end of the performance assessment period; and
 the employee's right to respond to issues raised during the process before a final decision is made.
Underperformance cases should be managed in accordance with relevant agency procedures. Failure to do so
could result in the Fair Work Commission or another review body determining that any resultant action to
reduce an employee’s classification or terminate employment should be set aside.
There may be circumstances where an employee who is performing unsatisfactorily could, more
appropriately, be dealt with under an agency’s code of conduct procedures. Examples could include where an
employee fails to perform their duties with appropriate care and diligence, where an employee fails to
comply with a lawful or reasonable direction about the way they are to perform their duties, or where an
employee refuses to participate in the agency’s performance management/appraisal process. Agencies will
need to decide whether it is more appropriate to deal with such cases under the underperformance processes
or as a breach of the Code of Conduct – see clause 4.2 of the Directions and Part 2.9 of this guide.
The Australian Government Solicitor’s 2009 Legal Briefing 92 entitled Dealing effectively with
unsatisfactory performance in the Australian Public Service may also assist in the management of
underperformance cases – see http://www.ags.gov.au/publications/legal-briefing/br92.htm.
2.5.3 Non-performance or underperformance of duties due to injury, illness or
disability
The scope and availability of paragraph 29(3)(c) as a ground for the termination of employment where an
ongoing APS employee is unable to perform their duties because of a physical or mental incapacity will
depend on the circumstances of each case. In most cases, termination because of an employee’s physical or
mental incapacity should be considered under paragraph 29(3)(d) of the PS Act (see Part 2.6 of this guide).
However, there may be situations where paragraph 29(3)(c) may be available.
 For example where an agency has reassigned duties to an ongoing APS employee under section 25 of the
PS Act because the employee was prevented from performing their previous duties due to physical or
mental incapacity, and it is judged that the employee is able and qualified to perform the new duties, then
if the employee unreasonably refused to perform the duties, it may be open to an agency to terminate the
employment on the ground of non-performance of duties. In such a case, the incapacity of the employee to
perform the duties previously assigned may not be relevant.
The termination of an employee on the ground of non-performance or underperformance of duties in cases
where a person has a medical condition raises complex legal issues. Agencies are encouraged to seek specific
legal advice before proceeding with the termination of employment in these circumstances to ensure
compliance with legal requirements.
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2.6 Specific grounds for termination – inability to perform duties
because of physical or mental incapacity (s.29(3)(d))
Subject to certain limitations set out below, an agency head may terminate the employment of an ongoing
Australian Public Service (APS) employee on the ground that the employee is unable to perform his or her
duties because of physical or mental incapacity. The Fair Work Act 2009 (FW Act), the Disability
Discrimination Act 1992 (DD Act) and the legislation governing Commonwealth superannuation
arrangements all provide important limitations on the availability of this head of power to terminate
employment and are dealt with below.
Also relevant is Public Service (PS) Regulation 3.2 which provides that where an agency head believes that
the state of health of an APS employee:
 may be affecting the employee’s work performance; or
 has caused, or may cause, the employee to have an extended absence from work; or
 may be a danger to the employee; or
 has caused, or may cause, the employee to be a danger to other employees or a member of the public; or
 may be affecting the employee’s standard of conduct;
the agency head may, by written notice, direct the employee to:
 undergo a medical examination by a nominated medical practitioner for an assessment of the employee’s
fitness for duty; and
 give the agency head a medical report of the examination (the nominated medical practitioner may also
give the agency head a report of the examination).
In addition, regulation 3.2 also provides that an agency head may direct an employee to undergo a medical
examination where:
 an APS employee is to be assigned new duties and the agency head believes that the employee’s state of
health may affect the employee’s ability to undertake the duties; or
 the employee is to travel overseas as part of the employee’s employment.
Note that the term ‘nominated medical practitioner’ is defined in the PS Regulations as a person who is
registered, or licensed, as a health practitioner under a law of a State or Territory that provides for the
registration or licensing of health practitioners and is nominated by the agency head to assess the fitness for
duty of an APS employee in the agency.
2.6.1 Fair Work Act
Under the General Protections provisions in the FW Act:
 an employer is prohibited from dismissing an employee because the employee is temporarily absent from
work because of illness or injury of a kind prescribed by the Fair Work Regulations (section 352); and
 an employee is prohibited from taking adverse action against an employee because of their race, colour,
sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities,
pregnancy, religion, political opinion, national extraction or social origin (section 351).
22
- In addition, an employer is also prohibited from taking a range of other adverse actions against an
employee (e.g. refusal to employ or injuring the employee in his or her employment), or a prospective
employee, on discriminatory grounds.
Section 352 of the FW Act sets out certain exemptions from these provisions including where the action
taken is not unlawful under another anti-discrimination law, or is necessary because of the inherent
requirements of the employee’s job. In addition, subsection 342(3) of the FW Act also provides a more
general exemption in relation to action that is authorised by or under a Commonwealth law. This exemption
could apply to action authorised by or under the Public Service Act 1999 (PS Act). However, it is suggested
that an agency should seek specific legal advice about the operation of this provision before seeking to rely
on it.
In relation to a temporary absence because of illness or injury, regulation 3.01 of the FW Regulations
provides that a prescribed kind of illness or injury exists if the employee provides a medical certificate for
the illness or injury, and the employee's absence has not extended for more than three months or the total
absences within a 12 month period have not exceeded three months.
An absence of longer than three months may also be a temporary absence within the meaning of the FW
Regulations if the employee is on paid personal/carer’s leave for the whole of the period.
The relevant provisions of the FW Act and FW Regulations effectively prohibit an agency head from
terminating the employment, under section 29 of the PS Act, of an employee who is on paid personal/carer’s
leave because of their own illness or injury, if that absence forms any part of the reason for termination. The
FW Regulations make it clear that the absence has to be for the reason set out in 97(a) of the FW Act, that is,
a person’s own injury or illness, so carer’s leave is not covered.
 Issues surrounding the interpretation of section 352 of the FW Act and FW Regulation 3.01 are quite
complex, so agencies may wish to consider getting their own legal advice on the application of these
provisions to the particular circumstances applying in the agency.
In addition, a period of paid personal/carer’s leave because of illness or injury does not include a period
when the employee is absent from work while receiving workers’ compensation.
 Under the Safety, Rehabilitation and Compensation Act 1988, an employee cannot access personal/carer’s
leave while on compensation leave—this includes the initial 45 week period of compensation leave where
an employee is entitled to 100% of his/her normal weekly earnings and any subsequent period where
reduced compensation payments are made.
Employees terminated on the ground set out in paragraph 29(3)(d) of the PS Act will have an entitlement to
notice of termination or payment in lieu of notice in accordance with the provisions of the FW Act – see
Appendix A.
2.6.2 Disability Discrimination Act
Paragraph 15(2)(c) of the DD Act provides that it is unlawful for an employer to discriminate against an
employee on the ground of the employee’s disability by dismissing the employee. As with the FW Act, the
prohibition on disability discrimination does not apply where, because of a disability, the employee would be
unable to carry out the inherent requirements of the particular employment. But unlike the FW Act, the DD
Act expressly incorporates the concept of ‘reasonable adjustment’ in relation to indirect disability
discrimination, and agency heads need to be aware of this.
23
2.6.3 Superannuation issues
In considering whether to terminate the employment of an ongoing APS employee who is a member of the
Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS) or the
Public Sector Superannuation accumulation plan (PSSap), an agency head also needs to have regard to the
requirements set out in the relevant superannuation legislation in relation to termination on medical grounds.
For CSS members, section 54C of the Superannuation Act 1976 provides as follows:
‘In spite of anything contained in any Act, industrial award or contract of employment, an eligible
employee who has not reached his or her maximum retiring age is not… capable of being retired from
the employment or office…on the ground that, because of any mental or physical condition, the
eligible employee is unable to perform his or her duties, unless the Board has certified in writing that,
if the eligible employee is so retired, he or she will be entitled to receive benefits…’.
‘Maximum retiring age’ for the purpose of this provision is 65 years of age.
For PSS and PSSap members, section 13 of the Superannuation Act 1990 and section 43 of the
Superannuation Act 2005 provide in similar terms, although in both cases the provision does not apply to
employees who are aged 60 or over.
In effect, the test applied by the relevant superannuation authority (currently the Commonwealth
Superannuation Corporation (CSC)) in these cases is that the employee must be considered to be totally and
permanently incapacitated (TPI). That is, because of a mental or physical condition, it is unlikely that the
person will ever be able to work in any employment or hold any office for which the person is reasonably
qualified by education, training or experience, or could become reasonably qualified for after retraining.
If the CSC assess that an employee is TPI and the employee’s employment is subsequently terminated under
paragraph 29(3)(d) of the PS Act, the employee will be entitled to receive invalidity retirement benefits
under the relevant superannuation legislation. In cases where the CSC is not satisfied that an employee is
TPI, the employee’s employment cannot be terminated on the ground specified in paragraph 29(3)(d) of the
Act.
 If paragraph 29(3)(d) of the PS Act is relied upon as the ground for termination in a case where such a
certificate has not been issued, the termination could be subject to challenge under the Administrative
Decisions (Judicial Review) Act 1977, FW Act or the DD Act.
Non CSS, PSS or PSSap members
If an ongoing APS employee is not a member of the CSS, PSS or PSSap, then the use of the ground set out in
paragraph 29(3)(d) of the PS Act to terminate employment is not subject to the requirement that the
employee be assessed as TPI as set out above.
However, agencies will still need to be satisfied that the employee’s mental or physical incapacity is
sufficiently serious to prevent them from performing their duties and ensure that they have had regard to the
relevant provisions of the FW Act and the DD Act in considering terminating the employment of an ongoing
APS employee on the ground of physical or mental incapacity.
24
2.7 Specific grounds for termination – failure to satisfactorily complete
an entry-level training course (s.29(3)(e))
An agency head may terminate the employment of an ongoing Australian Public Service (APS) employee
where the employee does not satisfactorily complete an entry-level training requirement notified to the
employee.
This ground may be considered where the employee:
 is engaged or assigned duties in a training classification; or
 is not engaged in a formal training classification but was clearly advised that completion of the relevant
training was the basis of their employment; or
 is not in a formal training classification, but the requirement to undergo training is specified as a formal
condition of engagement (imposed under subsection 22(6) of the Public Service Act 1999 (PS Act)).
- However, it may be preferable in this case to consider termination under paragraph 29(3)(f) of the PS
Act where there is a failure to satisfactorily complete the training – see Part 2.8 of this guide.
A person engaged or assigned duties on the basis that they are to undertake entry-level training should be
informed in writing prior to their engagement or assignment of the applicable training requirements and the
consequences of any failure to meet any or all of the training requirements (including any requirements about
on-the-job performance).
 When an employee is engaged, these requirements can be imposed as a condition of engagement under
subsection 22(6) of the PS Act. Such conditions need to be imposed prior to the person’s engagement as
there is no power to impose such conditions of engagement once employment has commenced.
 When an employee commences duties (other than on engagement) in a position, an agency head’s general
employer power under section 20 of the PS Act provides the authority to determine relevant training
requirements.
The advice to the employee should indicate at what stage in the training course a failure to meet certain
requirements can potentially lead to termination of employment.
Employees terminated on this ground will have an entitlement to notice of termination or payment in lieu of
notice in accordance with the provisions of the Fair Work Act 2009 – see Appendix A of this guide.
25
2.8 Specific grounds for termination – failure to meet a condition of
engagement (s.29(3)(f))
An agency head may terminate the employment of an ongoing Australian Public Service (APS) employee
where an APS employee fails to satisfy one or more of the conditions attached to their engagement.
 Subsection 22(6) of the Public Service Act 1999 (PS Act) provides the authority for an agency head to
impose conditions on the engagement of a person as an ongoing APS employee, including (but not limited
to) conditions dealing with probation, citizenship, formal qualifications, security and character clearances
or health clearances.
 For further information on conditions of engagement refer to the following links on the Australian Public
Service Commission’s website:
-
http://www.apsc.gov.au/aps-employment-policy-and-advice/engagement/conditions-of-engagement;
-
http://www.apsc.gov.au/aps-employment-policy-and-advice/engagement/probation; and
-
http://www.apsc.gov.au/aps-employment-policy-and-advice/engagement/citizenship-in-the-australianpublic-service.
A condition of engagement may be specified in any notification of the employment opportunity and/or in any
supporting selection documentation—i.e. as a general indication to potential applicants that certain
conditions will apply. However, where it is intended to impose a specific condition of engagement on a
person who is to be engaged as an APS employee, it needs to be notified to the employee prior to the
engagement, e.g. with the offer of engagement. Where a condition is not notified to the prospective
employee before engagement then that condition cannot be applied to the employee.
Conditions imposed under subsection 22(6) of the PS Act must relate to the engagement of the person (as
opposed to the ongoing performance of duties) and cannot endure indefinitely (i.e. once all conditions
imposed under subsection 22(6) have been satisfied, an employee cannot have their employment terminated
on the ground set out in paragraph 29(3)(f)). The agency should provide information to the employee on how
and when the condition of engagement may be satisfied.
Employees terminated on this ground will have an entitlement to notice of termination or payment in lieu of
notice in accordance with the provisions of the Fair Work Act 2009 – see Appendix A.
26
2.9 Specific grounds for termination – Breach of the APS Code of
Conduct (s.29(3)(g))
An agency head may terminate the employment of an ongoing Australian Public Service (APS) employee on
the ground that the employee has breached the APS Code of Conduct.
The APS Code of Conduct is set out in section 13 of the Public Service Act 1999 (PS Act). Subsection
15(2A) of the PS Act also provides that a person who is, or was, an APS employee is taken to have breached
the Code of Conduct if the person is found (under relevant procedures) to have, before being engaged as an
APS employee:
 knowingly provided false or misleading information to another APS employee, or to a person acting on
behalf of the Commonwealth; or
 wilfully failed to disclose to another APS employee, or to a person acting on behalf of the
Commonwealth, information that the person knew, or ought reasonably to have known, was relevant; or
 otherwise failed to behave honestly and with integrity.
Under subsection 15(3) of the PS Act, an agency head must establish procedures to be followed in
determining whether an APS employee in the agency has breached the Code of Conduct. Section 15 also sets
out the range of sanctions that may be imposed where a breach has been found, which includes termination
of the employee’s employment.
Note that under clause 4.2 of the Australian Public Service Commissioner’s Directions 2013, 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. This
material is currently being developed and will be published on the Commission’s website when available.
Further details on handling misconduct can be found in the Australian Public Service Commission’s
publication Handling Misconduct: A human resources practitioner's guide to the reporting and handling of
suspected and determined breaches of the APS Code of Conduct, which can be accessed at
http://www.apsc.gov.au/aps-employment-policy-and-advice/aps-values-and-code-of-conduct/handlingmisconduct.
The Commission has produced a range of other publications on Conduct and related issues which can also be
accessed through the following link: http://www.apsc.gov.au/aps-employment-policy-and-advice/aps-valuesand-code-of-conduct.
Employees terminated on this ground will have an entitlement to notice of termination or payment in lieu of
notice in accordance with the provisions of the Fair Work Act 2009, unless the termination is because of
serious misconduct as defined in that Act - see Appendix A of this guide.
27
Part three - Terminating the employment of a nonongoing APS employee
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.
28
- 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 nonongoing 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).
29
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
30
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.
31
 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.
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Appendix A: Fair Work Act provisions – further
information
Unfair dismissal
The Fair Work Act 2009 (FW Act) (Part 3-2) sets out when a person may be entitled to a remedy for unfair
dismissal. Unfair dismissal is where a person is dismissed from his/her employment and the dismissal is
found to be harsh, unjust or unreasonable and is not a case of genuine redundancy.
 ‘Genuine redundancy’ is defined in the FW Act as being where the person’s employer no longer requires
the person’s job to be performed by anyone because of changes in the operational requirements of the
employer’s enterprise and the employer has complied with any obligation in a modern award or enterprise
agreement that applied to the employment to consult about the redundancy.
 However, the FW Act also provides that a person’s dismissal will not be a case of genuine redundancy if it
would have been reasonable in all the circumstances for the person to be redeployed within the employer’s
enterprise; or the enterprise of an associated entity of the employer. Further information on genuine
redundancy is set out in Part 2.3 of this guide dealing with termination on the ground that an employee is
excess to requirements.
Certain categories of employees are not covered by the unfair dismissal protections of the FW Act, including
employees who have not completed their minimum employment period (section 382 of the FW Act). For
APS purposes the minimum employment period is 6 months.
Paragraph 386(2)(a) of the FW Act makes it clear that a person is not dismissed if the person was ‘employed
under a contract of employment for a specified period of time, for a specified task, or for the duration of a
specified season, and the employment has terminated at the end of the period, on completion of the task, or at
the end of the season’. In APS terms, this means that where a person is engaged for a specified term or for
the duration of a specified task and employment ceases at the end of the period or on the completion of the
task, then the person’s employment is not regarded as having been terminated at the initiative of the
employer for the purposes of the FW Act.
However, a non-ongoing APS employee engaged for a specified term or specified task who has their
employment terminated by the employer prior to the expiry of the term or prior to completion of the task
may have rights to lodge an unfair dismissal claim subject to other tests in the legislation being satisfied.
This is because non-ongoing APS employees engaged under paragraph 22(2)(b) of the Public Service Act
1999 (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.
Casual employees may have access to the unfair dismissal provisions of the FW Act where they have been
employed on a regular and systematic basis, have completed the minimum employment period and had a
reasonable expectation of continuing employment during that period.
The Fair Work Commission, which deals with unfair dismissal claims made under the FW Act, is able to
uphold the termination decision, or alternatively to order reinstatement or, where this is considered
inappropriate, order the employer to pay compensation to the employee.
33
General Protections
Part 3-1 of the FW Act contains the General Protections provisions. These provisions provide protections in
relation to workplace rights (which can broadly be described as employment entitlements and the freedom to
exercise and enforce those entitlements) and engaging in industrial activities (which encompass the freedom
to be or not be a member or officer of an industrial association and to participate in lawful activities,
including those of an industrial association).
Employers are prohibited from taking ‘adverse action’ against an employee because the employee has, or
exercises a workplace right or engages in industrial activity. ‘Adverse action’ includes dismissal of an
employee and injuring the employee in his or her employment.
The General Protections provisions apply to all APS employees regardless of the length of time they have
been working for the employer or whether they are an ongoing employee or not.
An example of the application of General Protections provisions is that an employer is prohibited from
dismissing an employee who is absent from work on parental leave, for the reason that the employee is on
parental leave. The protection applies because the employee has exercised their workplace right to access
their parental leave entitlement.
The General Protections provisions also contain a range of miscellaneous protections that are relevant in the
termination of employment context.
 Section 351 prohibits an employer from taking adverse action (which includes dismissal) against an
employee for a discriminatory reason (e.g. race, sex or disability).
 Section 352 prohibits an employer from dismissing an employee because they are temporarily absent from
work due to illness or injury of a kind prescribed by the Fair Work Regulations (FW Regulations).
Notice of termination
Section 117 of the FW Act provides that an employer must provide the minimum notice period or payment
in lieu of notice for termination of employment before terminating the employment of an employee.
Minimum notice periods are as follows:
Period of continuous service
Notice period*
Not more than 1 year
1 week
More than 1 year, but not more than 3 years
2 weeks
More than 3 years, but not more than 5 years
3 weeks
More than 5 years
4 weeks
* Note that under the FW Act, the relevant notice period increases by 1 week if the employee is over 45
years old and has completed at least 2 years’ continuous service with the employer.
Where payment in lieu of notice is made, the employee is entitled to receive payment of at least the amount
the employer would have been liable to pay to the employee at the full rate of pay for the hours the employee
would have worked had the employment continued until the end of the minimum period of notice.
There are certain exceptions to the requirement in section 117 of the FW Act to give notice of termination or
payment in lieu of notice of termination. Under section 123 of the FW Act, an employer is not required to
give notice or payment in lieu of notice in certain circumstances including to employees engaged for a
specified period of time, for a specified task or for the duration of a specified season; casual employees; or to
34
employees whose employment is terminated for ‘serious misconduct’, which is defined in Regulation 1.07 of
the FW Regulations – see http://www.comlaw.gov.au/Series/F2009L02356.
 It should be noted that because of section 29 of the PS Act which allows an employer to terminate
employment at any time, the courts are unlikely to regard APS specified term and task employment as
specified term or specified task employment for the purposes 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 will therefore generally be required to give the employee notice of termination or compensation
instead of notice at least equal to the amount set out in section 117 of the FW Act.
In terms of the ‘serious misconduct’ exemption, agencies will need to determine on a case by case basis
whether the conduct of an employee falls within this definition of ‘serious misconduct’ in the FW
Regulations and therefore whether the employee is entitled to notice of termination, or payment in lieu.
 However, this does not mean that APS employees can have their employment terminated ‘on the spot’ for
serious misconduct. Agencies will need to follow their established procedures for determining whether an
employee has breached the APS Code of Conduct, and termination of employment with or without notice
on the ground of misconduct can only occur at the end of a properly conducted misconduct process.
It is important to note that the FW Act only sets a minimum notice period. APS industrial or other
instruments and/or engagement documentation may provide entitlements to longer periods of notice than that
available under the FW Act. If this is the case, then those longer periods will apply in APS termination
decisions.
Further advice on identifying the amounts to be included where payment in lieu of notice of termination is to
be made is set out in Appendix C of this guide.
Redundancy pay
Further information on minimum redundancy pay entitlements under the FW Act is contained in Part 2.3 of
this guide dealing with termination on the ground that an ongoing employee is excess to requirements.
35
Appendix B: Compensation for early termination of nonongoing APS employees engaged for a specified term
It is suggested that engagement documentation and/or any industrial instruments applying to an employee:
 specify that where a non-ongoing APS employee who has been engaged for a specified term is terminated
before the expiry of the specified term because:
-
the duties in relation to which they were engaged have been completed ahead of time; or
-
a decision has been made that those duties are no longer required to be performed;
the employee will, in addition to any entitlements arising under section 117 of the FW Act, be entitled to
compensation in respect of the period of service foregone (in accordance with a specified formula
determined by the agency – see below); and
 specify that the above amount for compensation for early termination will not be in addition to any
entitlement the employee has to redundancy pay under section 119 of the FW Act (National Employment
Standards (NES) payment)*; and
 state that the employee shall not be entitled to other damages or compensation in respect of, or arising out
of, the termination (other than any entitlement the employee would have to redundancy pay under section
119 of the FW Act)*.
* Note that if a specified term employee is also entitled to an NES redundancy payment on early termination
of the specified term, and the employee’s engagement documentation or the industrial instrument applying to
the employee includes early termination provisions which are equivalent or more beneficial to the employee
than the NES redundancy amount, it is suggested that it be made clear in the relevant instrument that the
employee is not entitled to the benefit of both the NES redundancy entitlement and the compensation amount
provided for in the engagement documentation/industrial instrument (i.e. that the compensation amount is to
be reduced by any NES redundancy amount payable to the employee).
The following formula may be appropriate in relation to a non-Senior Executive Service (SES) employee
engaged for a specified term.
An agency will, however, need to have regard to the particular circumstances of the engagement, e.g.
whether remuneration packaging applies or the person relocated from interstate or overseas to take up the
engagement, the length of service as a non-ongoing APS employee prior to termination, and other steps
taken to mitigate the employee's loss such as assisting in finding alternative employment.
Period of service forgone
Compensation
Not more than 6 months
Nil
More than 6 months, but not more than 12 months
4 weeks salary
More than 12 months, but not more than 18 months
8 weeks salary
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Appendix C: Amounts to be included in payment in lieu
of notice
Under subsection 117(2) of the Fair Work Act 2009, where payment in lieu of notice of termination is made,
the employee is entitled to be paid at least the amount the employer would have been liable to pay to the
employee at the full rate of pay for the hours the employee would have worked had the employment
continued until the end of the minimum notice period.
In practice, the amounts that should be included where payment in lieu of notice of termination is made are
as follows:
 Payments should only include amounts that would have been included in an employee's weekly,
fortnightly or monthly pay packet had the employee worked until the end of the minimum notice period.
However, where a particular entitlement is paid on a longer term basis (e.g. quarterly or annually), a
proportionate amount should also be included in the payment in lieu of notice even if payment of that
amount would not have fallen due during the notice period.
 Essentially, such an entitlement means wages or salary, anticipated overtime and/or shift allowances, and
other allowances such as 'higher duties allowance' (where an employee is temporarily assigned duties at a
higher classification level and this assignment would have continued), clothing and site allowances as well
as amounts that are normally paid directly to third parties on behalf of the employee will be payable.
 This would include the employee's superannuation contributions that are usually paid to a superannuation
fund on behalf of the employee (which form part of the employee's salary), plus any other sums that are
included in the employee's remuneration that are paid to third parties (for example under salary sacrifice
arrangements).
However, payment in lieu of notice of termination should not include employer superannuation contributions
payable by agencies.
In addition, as leave does not accrue after a person ceases employment, other entitlements such as annual
leave or long service leave should only be calculated up until the actual date that the termination of
employment takes effect (as specified in the notice of termination).
Salary increase between date of termination and end of required period
of notice
In circumstances where an employee is terminated and receives payment in lieu of notice of termination, and
a relevant industrial instrument or other workplace arrangement that applied to the employee before their
termination provides for an increase in salary in the period between the actual date the employee's
employment is terminated and the end of the required period of notice, then, unless the relevant industrial
instrument provides otherwise:
 the salary increase is only relevant in calculating the person's salary for the balance of the notice period
(i.e. the period between the date of effect of the salary increase and the end of the notice period)—the
same principle applies to any other increases (such as to allowances or loadings) that would have become
payable had the employee continued to work until the end of the notice period; but
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 the pay rise is not relevant in terms of calculating the person's entitlements to pay in lieu of unused leave
credits—entitlements should be calculated using the salary rate that applies at the actual date that the
termination of employment takes effect.
For example, an employee who has an entitlement to four weeks notice is paid in lieu of notice and has their
employment terminated on 15 June. A pay rise then comes into effect on 1 July. In that situation, the person
would be entitled to have their notice paid at the higher rate from 1 July until the notice period would have
expired, on say 12 July. However, this pay rise would have no effect on the employee's other entitlements as
calculated at the actual date of termination (15 June).
If, however, the employee works through the notice period (or part thereof) and remained in employment on
1 July, then he/she would be eligible to have all their accrued entitlements calculated on the basis of the
higher rate of pay and would continue to accrue entitlements until their employment was actually terminated.
There is no entitlement to payment in lieu of notice where the employee works through the notice period.
Other payments
On termination an employee will be entitled to be paid for unused annual leave and (where eligible) long
service leave credits, calculated in accordance with the relevant legislation/industrial instrument, up until the
date of effect of termination of the employee's employment (i.e. the date specified in the notice in writing of
termination of employment under section 29 of the Public Service Act 1999).
Payment in respect of unused long service leave credits
The amount payable in respect of long service leave on termination of employment is governed by sections
16, 17 and 21 of the Long Service Leave (Commonwealth Employees) Act 1976 (LSL Act).
The LSL Act provides that the amount payable upon the termination of employment of an eligible employee
must be calculated by reference to the salary that applied to the person on the day immediately before the
person ceased to be an employee. No provision is made in the LSL Act for taking into account an increase in
salary that occurs after the actual date of termination but before the end of the required period of notice.
Payment in lieu of other amounts
Payment in lieu of other entitlements can be made to employees in certain circumstancesfor example:
 an accelerated separation payment made to an excess employee on termination of employment, which, in
addition to normal redundancy pay entitlements, involves an additional payment for the balance of the
consultation and/or consideration periods (in addition to the notice period) being paid as a lump sum; or
 the balance of the retention period is paid out as a lump sum payment.
In these circumstances, the Australian Public Service Commission’s policy is that the calculation of these
lump sum payments should be worked out on the same basis as payment in lieu of notice of termination of
employment. In particular, the calculation of the payment should not include amounts for pro rata annual
leave or long service leave that would have accrued had the person remained as an employee during the
relevant consideration, consultation or retention periods, unless a specific provision of an industrial
instrument or other workplace arrangement that applies to the employee provides otherwise.
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