Engagement of people who have received a redundancy benefit

Overview

Section 66 of the Australian Public Service Commissioners Directions 2022 (the Directions) limits the engagement of individuals who have received a redundancy benefit from an Australian Public Service (APS) or the Australian Parliamentary Services. In accepting a redundancy benefit, the individual is excluded from being engaged back into the APS for a defined period called the redundancy benefit period.

This exclusion applies to individuals whose redundancy benefit period has not ended, except where:

1. the Agency Head determines they are essential to the effective operations of the agency and
2. the Australian Public Service Commissioner (APS Commissioner) has approved the engagement of the candidate as an ongoing employee or a non-ongoing SES employee.

These restrictions do not apply to individuals who have received a redundancy benefit from a non-APS Commonwealth employer, a State/Territory Government employer or from the private sector.

Redundancy benefit period

The redundancy benefit period is calculated by dividing the employee’s gross redundancy benefit received by the employee’s weekly salary, which provides the number of weeks the employee is ineligible for engagement into the APS.

Calculation considerations

When calculating the redundancy benefit period, the weekly salary used to calculate the redundancy benefit is either:

1. the full-time equivalent salary for an employee who has full-time and part-time service and their redundancy benefit was calculated on a part-time weekly salary or
2. the weekly salary used to calculate the redundancy benefit in all other cases.

For the purpose of calculating the redundancy benefit period, the redundancy benefit includes:

• a severance payment, or similar payment, made to an ongoing employee on cessation of employment
• a payment made to an employee as a result of the shortening of a retention period and/or
• an incentive to retire payment.

The redundancy benefit period does not include:

• any redundancy benefit the employee would be entitled to under the National Employment Standards (NES), as set out in section 119 of the Fair Work Act 2009. Additional information on the NES is available from the Fair Work Ombudsman
• a redundancy payment for an employee whose employment is terminated and only receives their NES entitlement and
• any payments made to non-ongoing employees as compensation for the early termination of their engagement.

The redundancy benefit period calculated is rounded down to the nearest equivalent whole day.

Other amounts that an employee might receive on separation, such as payment for accrued entitlements and payment in lieu of notice of termination, are not taken into account when calculating the redundancy benefit period.

Formula

(Gross redundancy benefit – NES redundancy entitlement) / employee’s weekly salary = redundancy benefit period weeks

Example

An employee received a $16,092 total gross redundancy benefit. They were entitled to an 11 week redundancy benefit under the NES (equals $14,751) and their weekly salary was $1,341.

Therefore: ($16,092 - $14,751) / $1,341 = 1.

The employee’s redundancy benefit period would be 1 week.

APS Commissioner’s approval

Where an Agency Head considers that the engagement of a candidate who has received a redundancy benefit before the expiry of their redundancy benefit period is essential for the agency’s operations, they may seek the APS Commissioner’s approval for the engagement under section 66 of the Directions. The request should include:

• the specific skills, experience and/or qualifications required to perform the particular duties
• the level of redundancy benefit received, the agency it was received from and the time that has elapsed since it was received and
• any other factors considered relevant by the Agency Head.

Approval needs to be sought for ongoing employment (including as an ongoing SES employee) or non-ongoing SES employment.

The Commissioner’s approval is not required for an Agency Head to engage a person who is still within their restriction period as a non-ongoing non-SES employee where the requirements of section 66(1)(a) of the Directions are met.

Pre-employment checks

An agency’s pre-employment documentation should make it clear to candidates that they need to declare whether they have received a redundancy benefit from an APS agency or the Parliamentary Service. While the re-engagement of an employee who has received a redundancy benefit is only restricted for their redundancy benefit period, an agency may decide to request the employee declare any such benefit for a defined period, say within the last 12 months, to ensure the agency is meeting its obligations under the Directions.

Candidates may be asked to declare whether they have received a redundancy benefit on an application form when applying for a job.

Where a candidate declares they have received a redundancy benefit, the agency must establish whether their restriction period has expired. This can be done using information provided to the candidate by their former agency.

Further information

HR practitioners seeking more information on the engagement of individuals who have received a redundancy benefit can contact the Employment Policy team via employmentpolicy@apsc.gov.au or call the advice line on (02) 6202 3857.