Tools for implementing budget reprioritisations in the VPS

Attachment B - Process for managing budget reprioritisations in the VPS summarises the order of priority for these tools and this process and relevant entitlements will apply to cessation arising from budget reprioritisations occurring on or before 30 June 2024 after which the relevant termination packages will revert to those outlined in the IR Policies.

Changes to workplace arrangements or team profiles

Employers should consider the extent to which savings can appropriately be achieved through changes to workplace arrangements or team profiles which may preserve ongoing employment. This might include, for example:

• natural attrition and non-renewal of impacted fixed term appointments subject to any relevant workload considerations, 
• changing workforce composition through vacancy management in a manner consistent with the relevant classification and value range descriptors outlined in the enterprise agreement and subject to any workload considerations, and/or
• give consideration to requests for alternative work arrangements from employees, including part-time fractions, utilisation of leave and other such arrangements, consistent with the VPS Flexible Work Policy.

Mobility

Mobility principles in the VPS Agreement recognise that the work required of a modern career public service is not static but always changing for a variety of reasons. Consistent with these principles and the common mobility policy employers must consider whether there are opportunities for employees to be responsively deployed to other or growth areas of the department to support changing government priorities. 

This means that where in implementing allocated budget reprioritisations employers also have new or growth areas in which vacancies are likely to arise, Employers must consider whether such vacancies can reasonably be filled by assigning current employees who are suitably qualified and experienced and likely to be declared surplus to the vacant role prior to declaring employees in areas of decline or cessation surplus or considering whether the vacant roles in the new or growth area should be filled by advertising in accordance with usual recruitment practices. 

Alternative employment incentives

Consistent with the BPEC agreed alongside the VPS Agreement, employers may offer employees working in areas affected by reprioritisation an incentive payment of 5 weeks’ pay for finding themselves alternative employment outside the VPS within a specified period. Alternative employment incentives may only be used for eligible separations which take effect on or before 30 June 2024.

Early Retirement Schemes

Criteria for using Early Retirement Schemes

Employers may consider utilising Early Retirement Schemes (ERS) only where:

• that mechanism is suitable for giving effect to the specific reorganisation of the employer’s operations required to implement specific savings arising from budget reprioritisations, and
  • an ERS was run as part of the Workforce Transition arrangements to give effect to the 2021/22 Budget savings, which resulted in an over-subscription such that another ERS targeted to the same work area(s) will provide those unsuccessful candidates with an opportunity to reapply, or 
  • a work area(s) affected by current budget reprioritisation was not in scope of the Department’s ERS to give effect to the 2021/22 Budget savings.

Employers should not create new “at large” or “department wide” voluntary ERS to give effect to the current reprioritisations. Where an ERS is considered an appropriate mechanism for giving effect to budget reprioritisations an age eligibility requirement must be applied. The age eligibility criteria must be at least 50 years of age (or preferably a higher age if it is suitable to give effect to the scheme) at the date of separation from the VPS.

Re-employment restrictions that apply to voluntary separations made under an ERS

Where employers elect to use a voluntary ERS, with the prior approval of the Australian Taxation Office (ATO) and in accordance with the above stipulations, it is expected that the re-employment restrictions outlined in the IR Policies in relation to Voluntary Departure Packages will be applied. 

Applicable separation package for voluntary separations made under an ERS

The applicable separation package to be applied to those employees who accept an ERP, will be the ERP package outlined in the BPEC, where the application for approval of the scheme is submitted to the ATO on or before 30 June 2024. After this date the relevant package will revert to the VDP as outlined in the IR Policies.

Expectations of Government on employers who elect to use an ERS

Where an Employer elects to use an ERS, they are responsible for determining the parameters and limitations on access to, and implementation of, ERSs in accordance with ATO rules and practice, but in general it would be expected that:

• employees must be in paid and ongoing employment to be eligible
• Departments would apply an age limit for eligibility (in a manner which is consistent with relevant legislation noting that only those employees below the pension age should be eligible). The age eligibility criteria must be at least 50 years of age (or preferably a higher age if it is suitable to give effect to the scheme) at the date of separation from the VPS.
• access to ERPs should be limited to a class of employees that can be objectively determined, who are affected by a reprioritisation, and not apply at large to all employees in a Department or division
• eligibility criteria, and any specific exclusions, should be tailored to the area or function affected by the reprioritisation, and
• an objective process for determining priority in the case of oversubscription would be developed.

Employers are responsible for seeking ATO approval for any ERS prior to implementation and should allow sufficient time for that approval to be obtained. Employers should also ensure any applicable consultation obligations are met.

There is no obligation on employers to use ERSs ahead of the other separation packages outlined in this policy if it does not meet their operational needs.

Separation Packages

The IR Policies acknowledge that in some instances restructure of workplaces or changes to existing work practices may result in redundancies. Departments and agencies are required to pursue all possible means to secure continuation of employment of affected employees, including but not limited to, redeployment and retraining, with involuntary redundancies and payment of Targeted Separation Packages (TSPs) to be used only as the last resort. 

Involuntary terminations of employment must be used in a manner consistent with the following guidance. This policy provides for two other types of separation package prior to the payment of a TSP which remains the option of last resort.

Consultation obligations must be followed

Where in implementing budget reprioritisation an employer proposes to restructure their organisation, they must follow consultation obligations outlined in the applicable enterprise agreement. 

Given the nature of the changes required to implement the savings requirements it is anticipated that clause 11 processes will be the mechanism to implement the changes. Consistent with the obligations in the VPS Agreement the change proposals will be provided to the CPSU and will provide the detail of the change processes including detail in relation to the matching and EOI processes as well as clearly identifying the roles which will be surplus to requirements and no longer be required to be performed in the new structure. 

In advance of the formal clause 11 processes departments and agencies should provide high level information to the CPSU in relation to the savings allocation as well as the business areas in scope of the change processes. 

Where the proposed restructure of an affected area results in fewer positions in the structure than current, the employer will call for volunteers amongst affected employees who are not matched to a role in the new structure who wish to be paid an Applicant Separation Package prior to running an EOI to fill unmatched roles. 

While employers may elect to call for volunteers amongst affected employees not matched to a role in the new structure prior to running an EOI to fill unmatched roles, they are not obliged to accept any or all employees’ applications to depart the VPS immediately. Any interest expressed in departing the VPS immediately and being paid an Applicant Separation Package under this policy will be subject to operational requirements and confirmation by the employer the employee’s exit would assist the employer achieve its budget reprioritisation requirements. 

'Process for managing budget reprioritisations in the VPS' details the approach and entitlements which apply when an employer accepts an expression of interest to leave the VPS from an affected employee who is not matched to a role in the new structure. 

Redeployment period

When an employee’s position is declared surplus by the employer a redeployment period of at least 3 months applies. Consistent with the BPEC, employers may consider extending the redeployment period on a case-by-case basis where that will assist the employee transitioning to another role this can be extended by up to an additional 3 months.

The employer and the employee may also agree for some or all of the redeployment period to be paid in lieu, in addition to the payment of an Immediate Separation Package, where the employee who was not matched to a role in the new structure and has been unsuccessful in obtaining a role in the new structure through the EOI process would prefer to end their VPS employment immediately. This applies to employees whose expression of interest in receiving an Applicant Separation Package (referred to above) is not accepted by the employer as well as those employees who are not matched to a role in the new structure but who do not express interest in immediate departure from the VPS and who have been unsuccessful in being matched to a role in the new structure.

In these circumstances where an affected Employee does not opt to be paid the Immediate Separation Package and redeployment period in lieu, they will commence the redeployment process. 

'Process for managing budget reprioritisations in the VPS' details the options and entitlements which apply for employees whose are unsuccessful through an EOI process for the filling of an unmatched role in the new structure and in what circumstances an employer may agree to pay an employee’s redeployment period in lieu.

Salary Maintenance where employees accept roles at a lower grade

If an employee accepts a lower grade role prior to 30 June 2024 because of budget reprioritisations, 12 months’ salary maintenance is to be provided. After this date, salary maintenance arrangements will revert to 6 months consistent with the IR Policies. 

Priority access and career supports

The VPS Agreement provides that during a redeployment period, employees have priority access to vacancies within the VPS. Employers are expected to provide a range of career and other support services and/or retraining opportunities as outlined in this policy, the IR Policies, Schedule A of the VPS Agreement and the BPEC.

Payment of Separation Packages

Under this policy there are three types of separation packages which are payable in different circumstances. These are:

'Process for managing budget reprioritisations in the VPS' outlines the packages that will apply in each circumstance.

Notice of termination of employment

Consistent with the IR Policies, Employers must also provide notice of termination or payment in lieu of notice in addition to the relevant package.