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Last updated: 12 January 2007

Termination of employment

Archived publication – please see www.apsc.gov.au/publications12/terminatingapsemp.htm for current publication.

Foreword

This booklet is part of a series of guides issued by the Australian Public Service Commission (APS Commission) following the passage of the Public Service Act 1999 (PS Act).

After the passage of the PS Act, the APS Commission (as the PSMPC) published seven guides in the three series: Working with the Act, Working Together, and Values and Conduct.

Since early 2002 all APS Commission guides and advices have been published in this new series. Earlier guides are listed in sequence and given a number inside the front cover of all new booklets.

Under the PS Act, responsibility for employment decisions has been devolved to Agency Heads, giving them greater flexibility to manage their own workplaces, within the framework of the PS Act and subordinate legislation.

This booklet provides Agency Heads, and agency staff more generally, with advice on matters that should be considered in relation to termination of employment decisions. It sets out the basic obligations which agencies must observe, and around which they should establish appropriate agency-specific arrangements.

The PS Act is intended to operate side by side with the termination of employment provisions of the Workplace Relations Act 1996 (WR Act) to ensure that public service practices broadly mirror those in the private sector regarding an employer's power to 'hire and fire', and to remove some of the previous impediments to proper management of underperformance.

Any decision to terminate the employment of an APS employee must of course be managed consistent with the administrative law framework, the requirement to uphold the APS Values and the concept of 'a fair go all round' under the WR Act.

This booklet has been prepared in consultation with the Department of Employment and Workplace Relations, which has overall policy responsibility for the WR Act.

 

Andrew Podger
Public Service Commissioner
May 2004

Introduction

Under the Public Service Act 1999 (PS Act), responsibility for employment decisions affecting the employees in an agency, including at the Senior Executive Service (SES) level, has generally been devolved to the Agency Head. Such decisions must comply with the requirements set out in the PS Act and the various instruments issued under that Act, including the Public Service Regulations 1999 (the Regulations) and the Public Service Commissioner's Directions 1999 (the Directions).

The provisions of section 29 of the PS Act and the termination of employment provisions of the Workplace Relations Act 1996 (WR Act) are intended to operate side by side in relation to the termination of APS employees.

This booklet provides general advice on termination of employment issues and is designed to help agencies work within the legal framework.

The booklet should be read in conjunction with other APS Commission booklets:

The following document is an updated electronic version of the Booklet issued in August 2002 by the Australian Public Service Commission. The updated booklet takes account of the legislative changes made by the Workplace Relations Amendment (Fair Termination) Act 2003 and the 2006 WorkChoices legislation.

Further advice

As the law regulating termination of employment is complex and subject to change, agencies are encouraged to establish appropriate mechanisms to inform themselves of any legislative changes and developments in case law.

Any further advice on termination of employment issues affecting employment in the APS will be advised to agencies by APS Commission Circular.

Advice on the operation of the WR Act is available from the Department of Employment and Workplace Relations (DEWR).

Agencies may also wish to subscribe to a commercial service that provides regular updates on termination of employment issues dealt with before the courts or the Australian Industrial Relations Commission (AIRC).

Additional advice for employers on managing workplace and termination issues can also be found in the 2001 revised edition of the DEWR publication Hiring or Firing-Are you complying?

1. The legislative framework

1.1 Public Service Act and Regulations

The PS Act (section 29) provides the head of power to terminate the employment of all APS employees (SES and non-SES). It does not, however, prescribe in detail the processes to be followed.

Under the PS Act, an Agency Head may at any time, by notice in writing, terminate the employment of an APS employee in the agency (section 29(1)). The PS Act is intended to operate side by side with the termination of employment provisions of the WR Act. This is made clear by the note at the end of section 29(1) of the PS Act.

Any decision to terminate the employment of an APS employee must be consistent with the requirement to uphold the APS Values (as set out in section 10(1) of the PS Act and Chapter 2 of the Directions) and with administrative law.

Ongoing APS employees

The notice of termination of employment must specify the ground or grounds that are relied on for the termination of an ongoing APS employee (section 29(2)).

The only grounds on which the employment of an ongoing APS employee may be terminated are spelt out in section 29(3), namely:

  1. the employee is excess to the requirements of the Agency
  2. the employee lacks, or has lost, an essential qualification for performing his or her duties
  3. non-performance, or unsatisfactory performance, of duties
  4. inability to perform duties because of physical or mental incapacity
  5. failure to satisfactorily complete an entry-level training course
  6. failure to meet a condition imposed under section 22(6) of the PS Act
  7. breach of the Code of Conduct
  8. any other ground prescribed by the regulations.

Note: As at the date of publication of this booklet no other ground for termination of ongoing APS employees has been prescribed by Regulation.

The termination, and the ground(s) for the termination, of an ongoing APS employee must be notified in the Gazette (regulation 3.12).

There is no right of appeal or review under the PS Act or the Regulations in relation to a decision to terminate the employment of an ongoing APS employee.

Non-ongoing APS employees

The grounds for termination of a non-ongoing APS employee are not spelt out in the legislation.

The PS Act makes provision for the Regulations to prescribe grounds or procedures applicable to the termination of a non-ongoing APS employee (section 29(4)). However, the PS Act also makes it clear that this provision does not, by implication, limit the grounds for termination of the employment of a non-ongoing APS employee (section 29(5)).

For the purposes of section 29(4) of the PS Act, regulation 3.11 identifies procedures applicable to the termination of the engagement of a non-ongoing APS employee, namely:

There is no right of appeal or review under the PS Act or the Regulations in relation to a decision to terminate the employment of a non-ongoing APS employee.

1.2 Awards and Workplace Agreements

Where an award or workplace agreement sets out procedures to be followed before an employee's employment is terminated, the agency will need to comply with those provisions before exercising the powers available under section 29 of the PS Act.

Section 33 of the PS Act (review of actions) specifically provides that:

"...an APS employee is not entitled to review under this section of APS action that consists of the termination of the employee's employment."

To avoid doubt and confusion agencies are encouraged not to provide staff with avenues of review or appeal against termination of employment other than those available under the WR Act. In particular, agencies should ensure that termination of employment or a decision to terminate the employment of an employee cannot be reviewed under the dispute prevention and settlement procedures or review of actions provisions in their workplace agreements.

1.3 Workplace Relations Act

The WR Act defines termination of employment as termination at the initiative of the employer.

The WR Act provides remedies for both unfair dismissal and unlawful termination.

A principal objective of the unfair dismissal provisions is a system that provides for review of an employee's dismissal, based on the concept of 'a fair go all round'; that is, a system that is fair to both employees and employers.

An APS employee may, in the same way as other members of the Australian community, apply to the Australian Industrial Relations Commission (AIRC) for relief in respect of the termination of his or her employment on the grounds that it was harsh, unjust or unreasonable (ie unfair dismissal). Access to the unfair dismissal jurisdiction is subject to various exclusions - these are outlined in the chapters that follow.

The WR Act does not explicitly define the phrase 'harsh, unjust or unreasonable'. However, it sets out factors in s.652 that the AIRC is to have regard to in determining an unfair dismissal application. These are:

Agencies should be aware that one of the matters the AIRC may take into consideration is whether, having regard to the particular circumstances of the case, redeployment to other duties or a reduction in classification under section 23 of the PS Act was a viable or appropriate alternative.

An APS employee may also seek relief on the ground that their termination was unlawful.

The WR Act lists a number of circumstances (known as 'proscribed reasons') which are unlawful reasons for terminating a person's employment (section 659). These are:

An exception to the proscription of termination on the grounds of race, colour, sex etc is provided where the reason is based on the inherent requirements of assigned duties, or where the relevant employee is terminated in good faith to avoid injury to the religious susceptibilities of the adherents to the particular religion or creed concerned.

It is also unlawful to terminate a person's employment without providing at least the minimum period of notice, or payment in lieu of such notice (section 661). Further, it is unlawful to dismiss 15 or more employees for economic, technological, structural or similar nature, or for reasons including such reasons, without first notifying Centrelink (section 660).

Other provisions of the WR Act contain particular specific limits on when employment may be terminated.

Further details on the operation of the termination of employment provisions of the WR Act and exclusions from their operation are set out in Chapter 5.

1.4 Other relevant Commonwealth law

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 (ADJR Act).

Each termination decision made under the PS Act must comply with the usual requirements imposed by administrative law, including:

The Disability Discrimination Act 1992, the Human Rights and Equal Opportunity Commission Act 1986, the Racial Discrimination Act 1975 and the Sex Discrimination Act 1984 are also relevant, subject to any qualification in the relevant legislation.

1.5 State/Territory unfair dismissal and unfair contract laws

The WR Act excludes State or Territory industrial laws (as defined in that Act) from applying to employees covered by the WR Act. DEWR's Supporting Guidance on the Policy Parameters for Agreement Making in the APS also contains a suggested clause for inclusion in agency agreements to make clear what are the exhaustive rights and remedies for APS employees with respect to dismissal.

For further information, refer to the Supporting Guidance on the Policy Parameters for Agreement Making in the APS, available through the DEWR website.

1.6 Remedies in relation to termination of employment

There is no right of appeal or review under the PS Act or the Regulations in relation to a decision to terminate the employment of an APS employee (apart from a limited right of complaint under Regulation 7.2 to request investigation of the former employee's separation entitlements).

APS employees may apply to the AIRC for remedies under the WR Act or to an appropriate court for remedies under the common law contract of employment on the same basis as the rest of the community. In addition, they may also apply for administrative law remedies

Further details on the operation of the termination of employment provisions and exclusions from their operation are set out in Chapter 5.

2. Termination of ongoing APS employees

2.1 Main points

The main points and considerations applying to the termination of an ongoing APS employee are as follows:

There is no right of appeal or review under the PS Act or the Regulations in relation to a decision to terminate the employment of an ongoing APS employee. A person who was employed as an ongoing APS employee, however, may be able to seek relief in relation to the termination of their APS employment in other forums, including under the provisions of the WR Act and the administrative law framework.

2.2 Grounds for termination

Under the PS Act the only grounds on which the employment of an ongoing APS employee may be terminated are spelt out in section 29(3), namely:

  1. the employee is excess to the requirements of the Agency
  2. the employee lacks, or has lost, an essential qualification for performing his or her duties
  3. non-performance, or unsatisfactory performance, of duties
  4. inability to perform duties because of physical or mental incapacity
  5. failure to satisfactorily complete an entry-level training course
  6. failure to meet a condition imposed under section 22(6) of the PS Act
  7. breach of the Code of Conduct
  8. any other ground prescribed by the regulations.

To assist with the management of specific cases, information on each of the grounds is provided below.

In deciding which ground or grounds for termination is or are appropriate, an Agency Head should weigh up the circumstances of the case and make a judgement as to what is appropriate.

Ongoing APS employee who is excess to requirements

An ongoing APS employee who is excess to the requirements of an agency may have their employment terminated on the ground set out in section 29(3)(a) of the PS Act.

The PS Act, Regulations, Directions do not contain detailed provisions for determining which employees are excess to requirements.

Detailed provisions relating to the management of excess employees are generally found in the relevant award or workplace agreement .

The relevant award or workplace agreement may impose obligations on an Agency Head in relation to redeployment at or below level or in relation to a period of retention in employment before the termination of employment. An agency must comply with any such provisions before terminating the employment of an ongoing APS employee.

As mentioned earlier, section 660 of the WR Act requires employers to notify Centrelink 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. The employer must not terminate the employment of an employee who fits into this category until written notification has been provided to Centrelink. (This requirement does not apply to certain excluded categories of employee, such as probationers.)

For further details on non-SES excess staff situations, refer to the separate APS Commission booklet Management of non-SES Excess Staff.

Lack of, or loss, of an essential qualification for performing duties

An ongoing APS employee who ceases to hold, or becomes ineligible to hold or use, an essential qualification that is an inherent requirement for the ongoing performance of their duties may have their employment terminated on the ground set out in section 29(3)(b) of the PS Act.

In the employment context, an essential qualification usually refers to a formal educational or vocational standard that has been reached and that has been awarded to the person and that is established as essential for the performance of particular duties. It may also refer to a security clearance at a specified level or the maintenance of a particular skill. An essential qualification may be lost temporarily or permanently.

When an Agency Head is considering termination on the ground set out in section 29(3)(b) of the PS Act, it would be appropriate to consider whether, in the particular circumstances of the case, redeployment to other duties and, if necessary, a reduction in classification on the ground set out in section 23(4)(d) of the PS Act would be a viable or appropriate alternative.

In some cases, the circumstances that resulted in loss of an essential qualification, such as a criminal offence, may suggest that a breach of the Code of Conduct has occurred and termination of employment on the ground set out in section 29(3)(g) of the PS Act may be more appropriate.

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 or is performing them unsatisfactorily. In such circumstances, the employee may have their employment terminated on the ground set out in section 29(3)(c) of the PS Act.

An agency will need to consider whether agency-specific procedures for the termination of employment on the ground of non-performance of duties or unsatisfactory performance should be established.

It is up to an Agency Head to decide whether, and to what extent, such procedures are included in an agency's workplace agreements. It is suggested, however, that where an agency decides to include procedures for reassessing and determining unsatisfactory performance of duties within their agreements it would be prudent to include an introductory clause specifying that these procedures do not apply to non-ongoing APS employees or to ongoing APS employees who are subject to a period of probation, during the probationary period.

Any procedures established by an agency must have regard to procedural fairness for the employee (for a meaning of 'procedural fairness' refer to Appendix A) and must clearly indicate whether or not the termination of the employee's employment is likely to arise and at what stage in the process this is likely to occur.

Any agency-specific procedures must be available to employees and must be complied with before an ongoing APS employee's employment may be terminated.

Non-performance of duties

Non-performance of duties includes situations where an employee has been:

Failure by an employee, without permission or reasonable excuse, to return to work and therefore to perform the duties for which they are employed is often referred to as abandonment of employment.

Where an ongoing APS employee has abandoned their employment it does not amount to resignation at common law. In other words, the breach of the contract of employment by the employee does not unilaterally terminate the employment relationship even where it consists of a failure to perform any of the obligations of an employee. As such, an Agency Head will need to take action on the ground set out in section 29(3)(c) of the PS Act in order to terminate the employment of the ongoing APS employee.

The termination of employment provisions of the WR Act would apply to a termination of employment in these circumstances and steps should be taken to ensure the termination is not harsh, unjust or unreasonable. As such an Agency Head should make a reasonable attempt to ascertain the reasons for the employee's failure to return to work, 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.

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 659(2)(a) of the WR Act which prohibits termination of employment where an employee is temporarily absent from work because of illness or injury within the meaning of the WR Regulations. Regulation 12.8 of Chapter 2 of the WR Regulations defines what temporary absence because of illness or injury means.

As outlined earlier, notice or pay in lieu of notice must generally be given unless the employee is guilty of serious misconduct (section 661(1)(c) of the WR Act). Regulation 12.10 of Chapter 2 of the WR Regulations provides that such misconduct includes 'wilful, or deliberate, behaviour by an employee that is inconsistent with the continuation of the contract of employment'. (The requirement to give notice does not apply to specified classes of employee - these are outlined in Chapter 5.)

An Agency Head would need to decide whether an ongoing APS employee who has abandoned their employment is guilty of serious misconduct for the purposes of section 661(1)(c) of the WR Act.

Non-performance of duties due to injury, illness or disability

The scope and availability of section 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 has not been fully explored.

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 would not be relevant.

The termination of an employee on the ground of non-performance of duties because of incapacity raises complex legal issues, especially where the reason is mental or physical incapacity - see below. Agencies are encouraged to seek specific legal advice before proceeding with the termination of employment in these circumstances to ensure compliance with legal requirements.

Unsatisfactory performance

The decision to terminate the employment of an ongoing APS employee on the grounds of unsatisfactory performance of duties will usually be handled as part of an agency's performance management scheme.

Such procedures will usually include:

Where an award or workplace agreement applicable to an employee sets out procedures for managing unsatisfactory performance, the agency must comply with those provisions before terminating the employment of the employee on this ground.

Inability to perform duties because of physical or mental incapacity

Section 29(3)(d) is intended to cover situations where an ongoing APS employee is unable to perform their duties, or other duties appropriate to the employee's classification, because of physical or mental incapacity.

There are, however, some restrictions in the use of this ground where an ongoing APS employee is a member of the Commonwealth Superannuation Scheme (CSS) or the Public Sector Superannuation Scheme (PSS).

CSS and PSS members

An ongoing APS employee who is certified by the relevant CSS or PSS Superannuation Board as totally and permanently incapacitated (TPI) (i.e. the relevant Board has agreed to invalidity retirement and payment of invalidity retirement benefits) may have their employment terminated on the ground set out in section 29(3)(d) of the PS Act.

Unless the relevant Superannuation Board has issued an Invalidity Retirement Certificate this ground is not available because of the operation of section 54C of the Superannuation Act 1976 and section 13 of the Superannuation Act 1990 and its interaction with section 29(3)(d) of the PS Act.

In other words, the relevant Superannuation Board must agree to invalidity retirement and payment of invalidity retirement benefits because the member is suffering from a permanent medical condition which is likely to prevent the member from ever working again, and which prevents the member from being retrained for another suitable employment opportunity, before this ground can be used for CSS or PSS members.

If section 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 ADJR Act, WR Act or under the Disability Discrimination Act 1992 (the DD Act).

Agencies will need to ensure that they have had regard to the relevant provisions of the WR Act and the DD Act in terminating the employment of an ongoing APS employee on the ground of physical or mental incapacity.

Non-CSS and non-PSS members

If an ongoing APS employee is not a member of the CSS or the PSS, then the use of the ground set out in section 29(3)(d) of the PS Act to terminate their employment is not subject to the requirement for an invalidity retirement certificate to be issued.

However, agencies will still need to ensure that they have had regard to the relevant provisions of the WR Act and the DD Act in terminating the employment of a an ongoing APS employee on the ground of physical or mental incapacity.

Failure to satisfactorily complete an entry-level training course

Section 29(3)(e) of the PS Act applies where an APS employee is engaged or assigned duties in a training classification to undertake entry-level training and the employee does not satisfactorily complete a training requirement notified to the employee.

A person engaged or assigned duties in a training classification to undertake entry-level training must be informed in writing prior to their engagement 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).

The advice to the employee should indicate at what stage in the process a failure to meet certain requirements is likely to lead to the termination of employment.

Where the prospective employee is not notified before commencement then that condition of engagement under section 22(6) cannot be applied retrospectively as there is no power to impose such conditions of engagement once employment has commenced.

Failure to meet a condition of engagement imposed under section 22(6) of the PS Act

An Agency Head may impose conditions on the engagement of an ongoing APS employee under section 22(6) of the PS Act, including conditions dealing with probation, citizenship, formal qualifications, security and character clearances or health clearances. Should an ongoing APS employee fail to satisfy one or more of the conditions attached to their engagement, the Agency Head may terminate the employment of the person on the ground set out in section 29(3)(f) of the PS Act.

A condition may be specified in any notification of the employment opportunity and/or in any supporting selection documentation and needs to be notified to the employee with the offer of engagement. Where a condition is not notified to the prospective employee before engagement then that condition cannot be applied retrospectively.

Conditions imposed under section 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 a condition imposed under section 22(6) has been satisfied, an employee cannot have their employment terminated on the ground set out in section 29(3)(f)).

One of the conditions that may be imposed is a requirement to successfully complete a period of probation. The WR Act (section 638) in some cases excludes an employee serving a period of probation from the operation of certain termination provisions of the WR Act.

The WR Act provides remedies for both unfair dismissal and unlawful termination.

Where an employee:

the employee will not have access to remedies available under the WR Act for unfair dismissal and will be excluded from the other termination of employment provisions, including the minimum notice requirement in section 661 of the Act.

However, any employee on probation may apply for a remedy on one of the grounds proscribed as unlawful in section 659 - for more details see 5.3 below.

For further details on conditions of engagement refer to the separate APS Commission booklets Conditions of Engagement (including Citizenship) and Probation.

Breach of the Code of Conduct

Termination of employment is one of the sanctions an Agency Head may impose on an APS employee who is found to have breached the Code of Conduct (section 15). Before terminating the employment of an employee on the ground set out in section 29(3)(g) of the PS Act, an Agency Head must follow the procedures required to be established under section 15(3) of the PS Act for dealing with suspected breaches of the Code of Conduct.

An agency's procedures are required to have due regard for procedural fairness (for a meaning of 'procedural fairness' refer to Appendix A).

Notice or compensation instead of notice may not be applicable in cases of serious misconduct (section 661 of the WR Act). Serious misconduct is generally understood to mean conduct of such a nature that it would be unreasonable to expect the employer to continue with the employment during the notice period that would otherwise be required. 'Serious misconduct' is further described in Regulation 12.10 of Chapter 2 of the WR Regulations.

Other grounds prescribed by the Public Service Regulations

As at January 2007, no other ground for terminating the employment of an ongoing APS employee had been prescribed by the PS regulations.

3. Termination of non-ongoing APS employees

3.1 Main points

The main points and considerations applying to the termination of a non-ongoing APS employee are as follows:

There is no right of appeal or review under the PS Act or the Regulations in relation to a decision to terminate the employment of a non-ongoing APS employee (apart from a limited right of complaint under Regulation 7.2 to request investigation of the former employee's separation entitlements). However, a person who was employed as a non-ongoing APS employee may be able to seek relief in relation to the termination of their APS employment in other forums, including under the provisions of the WR Act and the administrative and common law framework.

In most instances the procedures and grounds for the termination of a non-ongoing APS employee's employment will be the same as those applying to the termination of an ongoing APS employee, for example the need to have due regard for procedural fairness.

As mentioned in the Introduction, the law in relation to the termination of employment is complex and subject to change. As such the advice below on the termination of non-ongoing APS employees is not definitive. Agencies are encouraged to ensure they are aware of any legislative amendments and developments in case law before proceeding with the termination of employment of a non-ongoing APS employee.

Further details on the operation of the termination of employment provisions of the WR Act and exclusions from their operation are set out in Chapter 5.

3. 2 Conditions of engagement for a non-ongoing APS employee

An Agency Head may impose conditions on the engagement of a non-ongoing APS employee under section 22(6) of the PS Act, including conditions dealing with probation, citizenship, formal qualifications, security and character clearances or health clearances.

A condition would normally be specified in any notification of the employment opportunity and/or in any supporting selection documentation and needs to be included in the formal offer of employment given to the employee.

If a condition is not notified to the prospective employee before commencement then that condition cannot be applied retrospectively as there is no power to impose a condition of engagement once employment has commenced.

Conditions imposed under section 22(6) of the PS Act must relate to the engagement of the person and cannot endure indefinitely.

Should a non-ongoing APS employee fail to satisfy one or more of the conditions attached to their engagement, the Agency Head may terminate the employment of the person.

One of the conditions that may be imposed is a requirement to successfully complete a period of probation. The WR Act (section 638) excludes an employee serving a period of probation from the operation of certain termination provisions of the WR Act.

The WR Act provides remedies for both unfair dismissal and unlawful termination.

An employee on probation has access to a remedy on the basis that the termination of their employment was unlawful for one of the reasons, or for reasons which include one of the reasons, set out in section 659.

However, where an employee is serving a qualifying period in accordance with sections 643(6) and (7), or is serving a probationary period in accordance with section 638(1)(c) the employee will not have access to remedies available under the WR Act for unfair dismissal and will be excluded from certain other termination of employment provisions, including the minimum notice requirement in section 661 of the Act.

Further details on the operation of the termination of employment provisions of the WR Act and exclusions from their operation are set out in Chapter 5.

For further details on conditions of engagement refer to APS Commission booklets Conditions of Engagement (including Citizenship) and Probation.

3.3 Termination of a non-ongoing APS employee before the completion of a specified term or specified task

Section 638 of the WR Act excludes employees engaged under a contract of employment "for a specified period of time" or "for a specified task" from the operation of the unfair dismissal provisions, and certain of the unlawful termination provisions, of the WR Act. (Such employees do, however, retain access to a remedy where termination of employment was for one of the reasons set out in section 659.).

However, the case law, including that referred to in the note to section 659, indicates that, where such a contract of employment provides for earlier termination by notice, it is not a true contract of employment for a specified period of time or specified task. Because section 29 of the PS Act gives an Agency Head power to terminate the employment of an APS employee 'at any time', it seems likely that this exclusion will not apply in relation to engagements for a specified term or for the duration of a specified task under the PS Act.

As a result, a non-ongoing APS employee engaged for a specified term or task may have access to remedies under the WR Act if their employment is terminated early on a basis that is found to be harsh, unjust, unreasonable or unlawful. Accordingly, agencies need to be careful to follow proper processes before terminating the employment of a non-ongoing employee.

In addition, under the common law of employment, if an employer ends a fixed term contract of employment prematurely other than on a ground justifying instant dismissal, the employer may be liable to pay damages in relation to the balance of the term (subject to the normal rules about mitigation of damage).

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.

Appendix B sets out a possible approach to compensation arrangements that might apply if the engagement of an employee is to be terminated early.

Such an arrangement could be included in the contract of employment, or in a workplace agreement. This may not always avoid liability if the agreed amount is not found by the courts to be a reasonable payment for the damages suffered.

3.4 Termination at the end of a specified term or on completion of a specified task

Employment of a person for a specified term or for the duration of a specified task, will automatically cease at the end of that specified period (unless extended) or specified task.

Therefore, it is not a termination under section 29 of the PS Act, nor is it a termination 'by the employer' for the purposes of the WR Act.

However, there may be instances where an employee nominally engaged for a specified period or task will seek to show that their employer engaged them on that basis to avoid the unfair dismissal provisions of the WR Act. If the employee is able to successfully demonstrate that this is the case, they may still be able to bring an unfair dismissal claim.

3.5 Termination of irregular or intermittent employees

Section 29(1) of the PS Act and Regulation 3.11 apply to the termination of a non-ongoing APS employee, including those engaged for duties that are irregular or intermittent. Any procedures in an award or workplace agreement applicable to the non-ongoing APS employee must be followed.

Whether an irregular or intermittent employee is able to make an application in respect of an alleged unfair dismissal will depend on whether the employee is 'a casual employee engaged for a short period' within the meaning of section 638 of the WR Act.

For the purposes of section 638 an employee is taken to be engaged for a short period unless the employee is engaged on a regular and systematic basis for a sequence of periods during a period of at least 12 months and the employee has a reasonable expectation of continuing in employment or would have had such an expectation if it had not been for the termination decision.

The WR Act contains an 'anti-avoidance' mechanism to ensure that an employer cannot manipulate the 12 month exclusion by ceasing to engage a casual employee and subsequently re-engaging them. Provided the cessation and re-engagement are not more than three months apart, the two periods of employment are taken to be a single period for the purpose of calculating whether an employee was engaged for a period of at least twelve months.

Where a non-ongoing APS employee is engaged for short periods, e.g. a day at a time (but not on a regular and systematic basis for a sequence of periods during a period of at least 12 months) there is no requirement to give notice of termination under the WR Act, as all casual employees are excluded from the minimum notice requirements in section 661 of the WR Act (section 638)

However, it is important to remember that the WR Act still allows casual employees to make application for relief on the basis that the termination of their employment occurred for one of the reasons set out in section 659.

4. Termination of SES employees

4.1 Main points

The main points and considerations applying to the termination of an SES employee are as follows:

There is no right of appeal or review under the PS Act or the Regulations in relation to a decision to terminate the employment of an SES employee. A person who was employed as an SES employee, however, may be able to seek relief in relation to the termination of their APS employment in other forums, including under the provisions of the WR Act and the administrative law framework.

4.2 Termination of employment of an SES employee

As for other employees, SES employees may have their employment terminated under section 29 of the PS Act.

There are specific provisions, however, that relate to the termination of employment for SES employees:

4.3 Incentive to retire for SES employees

A decision by an SES employee to accept an opportunity to retire with a specified benefit under section 37(1) of the PS Act does not constitute a termination of employment (and so is not subject to the termination of employment provisions of the WR Act). However, the SES employee is taken, for all purposes, to have been compulsorily retired from the APS.

4.4 Further details

Further details on the operation of the termination of employment provisions for SES employees, and on the incentive to retire provisions, is included in the booklet The Senior Executive Service.

5. Workplace Relations Act 1996

5.1 Introduction

The termination of an APS employee is subject to the same provisions of the WR Act (including exclusions from coverage) as apply to the rest of the Australian community.

A principal feature of the termination of employment provisions of the WR Act is to ensure a 'fair go all round' for the parties concerned.

In general terms this means that APS employees are:

Division 3 of Part VIA of the WR Act deals with termination of employment, and provides remedies for both unfair dismissal and unlawful termination.

The WR Act excludes certain classes of employees from the operation of the unfair dismissal provisions, and certain aspects of the unlawful termination provisions.

Subject to these exclusions, the WR Act allows a Commonwealth public sector employee whose employment has been terminated to apply to for relief in respect of the termination (see the definition of “employer” in section 6 of the WR Act).

Unfair dismissal is discussed in section 5.2. Unlawful termination is discussed in section 5.3.

Other provisions of the WR Act contain particular specific limits on when employment may be terminated. These are also discussed in section 5.3.

5.2 Unfair dismissal

In relation to unfair dismissal, the WR Act provides:

The matters that the AIRC must have regard to in considering whether an employee's termination was harsh, unjust or unreasonable are set out in section 652 of the WR Act:

Agencies should take these matters into account in the development of any agency specific termination of employment processes.

Exclusions from unfair dismissal coverage

The WR Act provides a number of exclusions from the operation of the unfair dismissal provisions. (There is also a more limited range of exclusions that apply to some aspects of the unlawful termination provisions - these are outlined in section 5.3).

The exclusions from the unfair dismissal provisions relate to:

Additional exclusions may be provided by regulations but as at January 2007 there are no such exclusions.

Employees who have not completed a qualifying period

Section 643(6) of the WR Act provides that a person is not entitled to apply for a remedy in respect of termination of employment on the grounds that the termination was harsh, unjust or unreasonable (i.e. the grounds referred to in 643(1)(a)) unless that person had completed a qualifying period of employment.

To be eligible to apply for a remedy, the person must have completed the qualifying period of employment at the earlier of the following times:

Section 643(7) of the WR Act sets out the content of the qualifying period and establishes a default period of six months. The provisions allow for a longer, shorter, or no qualifying period to be determined by written agreement between the employer and the employee before commencement of the employment. Where a period longer than six months is agreed, the period must be reasonable having regard to the nature and circumstances of the employment. If the AIRC finds that the period is not reasonable, having regard to the nature and circumstances of the employment, then the employee will be entitled to apply for a remedy in respect of harsh, unjust, unreasonable termination of employment.

The "qualifying period" will be particularly relevant where an Agency Head does not impose a period of probation. In these circumstances the employee must nevertheless complete a qualifying period before being able to access remedies for unfair dismissal.

The qualifying period and the exclusion of probationary employees provided for by section 638 stand separately on their own terms. They present separate jurisdictional hurdles to be faced by employees seeking to access remedies in respect of unfair dismissal.

It is important to note that the "qualifying period" exclusion only operates to prevent an employee from accessing a remedy in respect of unfair dismissal. Such an employee will still be able to access a remedy in respect of unlawful termination.

Exclusions provided for by section 638

Section 638 of the WR Act lists the kinds of employees that are excluded from the operation of the unfair dismissal provisions of the Act. The classes of employees excluded are:

Note: Under the PS Act there is no 'casual' category. However in some cases a specified term or specified task employee or intermittent or irregular employee, engaged under the PS Act, may be a 'casual employee' for the purposes of the WR Act.

Chapters 2 and 3 include further important information relevant to the above exclusions. In particular the following sections are relevant:

Genuine operational reasons

Section 643(8) excludes an application being made by an employee where the reason, or one of the reasons, for the termination was genuine operational reasons. This is defined in section 643(9) as being “reasons of an economic, technological, structural or similar nature” relating to the employer’s business or part of it.

To be excluded by this provision, the AIRC will have to be satisfied, on the basis of evidence, that the operational reasons themselves genuine, and that the termination was a logical consequence of the implementation of those operational reasons. The availability of alternative employment will therefore be relevant, as will whether a redundancy process has been properly followed.

100 employees or fewer

Section 643(10) excludes an application being made by an employee where the employer has 100 employees or fewer. The 100 employees includes the employee whose employment has been terminated and casual employees engaged on a systematic basis for a period of at least 12 months.

This exclusion is not relevant to APS employment as persons are employed on behalf of the Commonwealth (sections 6 and 22 of the PS Act) which clearly has more than 100 employees.

5.3 Unlawful termination, and other grounds upon which termination of employment is prohibited

Unlawful termination

The WR Act provides that it is unlawful to terminate the employment of an employee on certain proscribed grounds as set out in section 659 of the WR Act. These are:

Termination of employment is also unlawful in the following circumstances:

An application alleging unlawful termination may be made to the AIRC or to the appropriate court - generally the Federal Court, although an application may be made to certain other courts of competent jurisdiction in relation to alleged failure to pay adequate notice on termination.

An application alleging unlawful dismissal can be made to the AIRC, and can be made in conjunction with a claim that the dismissal was harsh, unjust or unreasonable. The AIRC can only conciliate claims alleging unlawful dismissal; it cannot arbitrate as it can in unfair dismissal claims.

If conciliation is unsuccessful, the employee must elect whether to proceed with any unfair dismissal application in the AIRC, or to pursue unlawful termination proceedings in the appropriate court.

The remedies available to the courts in respect of unlawful termination of employment are set out in section 654. In the case of dismissal on any of the proscribed grounds in section 659, the orders that can be made include reinstatement and compensation for lost remuneration, and a penalty on the employer (section 665).

Exclusions from coverage

The categories of employees that are excluded from access to the unfair dismissal provisions under sections 638, are also excluded from bringing an action in respect of an alleged breach of section 660 (failure to notify Centrelink) or section 661 (failure to provide appropriate notice or payment in lieu).

The following additional categories of employees are also excluded from bringing an action in respect of an alleged breach of section 660 or section 661:

No categories of employees are excluded from bringing an application in relation to unlawful termination for a reason set out in section 659.

Other grounds upon which termination of employment is prohibited

An Agency Head must not dismiss, or threaten to dismiss, an employee because that employee was, is, or proposes to be engaged in protected industrial action for the purpose of supporting or advancing claims made in respect of a proposed collective workplace agreement (section 448).

An Agency Head also must not dismiss or threaten to dismiss an employee for any of the prohibited reasons in section 793 of the WR Act or for reasons that include a prohibited reason (section 792). The prohibited reasons in section 793 include:

The remedies that the Federal Court can order for a breach of section 792 include reinstatement and compensation, and also penalties (section807).