With APS redundancies looming, what do you need to know about your rights?

With the federal budget imminent, there is growing concern about the prospect of increasing redundancies in the Australian Public Service. Despite the Albanese Government campaigning against the then-Dutton Opposition’s plans to slash the APS at the last election, a requirement for APS-wide efficiencies has seen a number of central agencies offer voluntary redundancies.

While it remains to be seen what the budget will hold, a fiscally-constrained year ahead seems likely for the APS. The public sector union, the CPSU, has been vocal in expressing concern about job cuts across the service.

So what do federal public servants need to know about their workplace rights, lest they find themselves on the agency chopping block?

The starting point, as always, is the Public Service Act 1999, the legislation which governs public sector employment. Section 29 of that law provides significant discretion for dismissing employees; it says that an agency head “may at any time, by notice in writing, terminate the employment of an APS employee in the Agency.” The provision then sets out the grounds for termination, which, in addition to things like breaches of the APS Code of Conduct and underperformance, include “the employee is excess to the requirements of the Agency”.

The next place to look is the enterprise agreement of the relevant agency. We will use the Department of Climate Change, Energy, the Environment and Water (DCCEEW) as an example, as the most recent agency to announce a freeze on new hiring and the offering of voluntary redundancies. Due to common term bargaining across the APS, most enterprise agreements across the public service are very similar.

So far, most redundancies have been voluntary – we are yet to see widespread involuntary redundancies. Voluntary redundancies requirements at DCCEEW are set out in the enterprise agreement. A delegate can invite an employee declared excess to requirements to consider voluntary redundancy; the employee will then have a month to consider. The department is required to advise the employee of the amount of severance pay, payment in lieu of notice and leave entitlements and implications for their superannuation. Employees considering a voluntary redundancy are eligible for up to $600 to obtain financial advice.

If an employee accepts the voluntary redundancy, they are entitled to four weeks’ notice – five, in some cases – or payment in lieu. They are also entitled to a voluntary redundancy benefit of two weeks salary for each year of service, with a minimum sum of four weeks, and a maximum of 48 weeks.

Redundancy payments are generously taxed, too, helping ease the blow for public servants made redundant. There is a tax-free threshold, which varies depending on length of service. Above that limit, redundancy payments are concessionally taxed as employment termination payments.

An employee declared excess, who elects not to take a voluntary redundancy, is then moved into a retention period – of 30 weeks duration for most staff, or a year, for staff over 45 or with more than 20 years’ service. During this time, the department is required to assist the employee find alternative employment – this includes being placed on a priority internal placement register, and providing access to career transition support.

During the retention period, a public servant is required to take reasonable steps to seek a new role. They must “actively participate in learning and development activities, trial placements or other agreed arrangements to assist in obtaining a permanent placement”, according to DCCEEW’s enterprise agreement.

After the retention period, if the employee has not found alternative employment, they will have their employment involuntarily terminated – with equivalent notice requirements to voluntary redundancies.

Provided APS employees have been engaged for more than six months, they are protected from unfair dismissal and can bring a claim with the Fair Work Commission in the event they consider they have been unfairly dismissed. A genuine redundancy will not be unfair dismissal.

To determine if a redundancy is genuine, the Commission will ask whether, in addition to complying with the enterprise agreement consultation obligations, “the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise.” A redundancy will not be genuine if it would have been “reasonable in all the circumstances for the person to be redeployed”. The High Court recently expanded the breadth of the inquiry into what is reasonable for an employer to do in considering whether to redeploy staff.

Obviously, an APS agency does not have carte blanche to make staff redundant, even if they comply with these obligations. If that redundancy is motivated by unlawful discrimination, or because the public servant raised concerns about their employment conditions, or because they blew the whistle under the Public Interest Disclosure Act, it might be unlawful and give rise to claims under relevant laws.

However, subject to those limitations, and the procedural and consultation obligations under employment law and found in APS enterprise agreements, government departments have broad discretion to pursue redundancy programs.

That means that the latest federal budget will be one to watch for public servants. Whatever the outlook, though, APS workers can take some solace in the relatively generous entitlements available in the event of redundancy.

• John Wilson is the managing legal director at BAL Lawyers and an accredited specialist in industrial relations and employment law.

• Kieran Pender is an honorary senior lecturer at the ANU Law School and a consultant at BAL Lawyers.

First published 4 May in the Canberra Times – “APS redundancy guide: know your rights as job cuts loom“.